Category Archives: Westchester NY

Millennial homeownership suddenly drops | North Salem Real Estate

Homeownership was crawling slowly back from its record low two years ago, but it just stalled, and the youngest homebuyers are behind that.

Millennials had been driving the nation’s overall homeownership rate, showing the biggest gains throughout 2017, but they dropped back in the first quarter of this year.

Millennial homeownership fell from a three-year high of 36 percent in the fourth quarter of last year back to 35.3 percent in the first quarter of this year, according to the U.S. Census. Meanwhile, the homeownership rate for Americans aged 35 to 64 rose.

That caused the overall homeownership rate to stall at 64.2 percent, unchanged from the last quarter, after rising steadily from 63.6 percent one year ago. Homeownership fell to a 50-year low of 62.9 percent in 2016, after the worst housing crash in history.

The culprit is pretty clear: weakening affordability. Home prices have jumped dramatically in the past year, and the gains accelerated in the first quarter of this year, as the supply of homes for sale continued to drop to record lows. Mortgage interest rates also surged at the start of this year to the highest level in four years.

“Millennials make up the largest share of those seeking starter homes, a portion of the market that saw inventory plummet 14.2 percent and prices leap nearly 10 percent year-over-year in Q1 2017,” wrote Cheryl Young, a senior economist at Trulia.

The supply of starter homes is so lean that March sales were down in that sector over 21 percent compared with a year ago, according to the National Association of Realtors. Sales of higher-priced homes gained.

Homebuilders are moving some production to the lower end, but their focus is on move-up and luxury homes. The median price of a newly built home jumped 5 percent in March annually, reflecting not just housing inflation, but a continuing mix-shift to more expensive homes.

“The homeownership rate climbing out of its 50-year low should be seen as an opportunity for builders in the for-sale space,” noted Young. “The sharp increase in renter households coming out of the Great Recession has finally begun to moderate as older millennials and Gen Xers shift into homeownership, presenting a boon for new construction.

Vacancy rates are down for both owned properties and rentals, meaning there will be no easing of today’s high rents, which should be another impetus for renters to become homeowners. But those high rents make it hard for young buyers to save for a down payment.

And mortgage rates are continuing to move higher. The average rate on the popular 30-year fixed averaged 4.58 percent for the week ended April 26, up from 4.47 percent the previous week and 4.03 percent the same week one year ago.

“Mortgage rates are now at their highest level since the week of August 22, 2013,” said Sam Khater, chief economist at Freddie Mac. “Higher Treasury yields, driven by rising commodity prices, more Treasury issuances and the steady stream of solid economic news, are behind the uptick in rates over the past week.”

 

read more…

https://www.cnbc.com/2018/04/26/millennial-homeownership-suddenly-drops-after-a-good-run.html?__source=newsletter%7Ceveningbrief

Condemned Silicon Valley home sells for $1.23 million | Waccabuc Real Estate

A condemned home in Northern California — with holes in the roof and mildew inside — recently sold for $1.23 million, becoming the latest example of the Bay Area’s tight housing market.

The home in Fremont was originally listed for $1 million but ended up closing at $230,000 over its asking price, listing agent Larry Gallegos told KTVU.

“We had a couple of offers that were very close. Actually, my client, when I first met them, wanted a little bit more than that with the price they had in their mind. But they ended up being happy with this one,” he said.

A condemned home is seen Wednesday, April 18, 2018, in Fremont, Calif. The condemned Northern California house with holes in the roof and mildew in the pipes sold last month for $1.23 million. (AP Photo/Ben Margot)

The condemned Northern California house with holes in the roof and mildew in the pipes sold last month for $1.23 million.  (AP Photo/Ben Margot)

The home, located about 35 miles southeast of San Francisco, has three bedrooms, two bathrooms, and was condemned in 2013. The two investors who bought the property design green homes, according to Gallegos, and plan to put a 4,000 square-foot “masterpiece” on the lot in Fremont.

Gallegos told the Associated Press the buyers didn’t even enter the house because they had no interest in the actual building but on its location, which could offer a view of the bay from a second story.

Online property records show its assessment is years out of date — its taxable value is listed as $90,000.

David Stark of the Bay East Association of Realtors told KTVU there was “nothing surprising” about the sale.

“It’s a great example of location, location, location,” he said.

Stark told the television station that buying a tear-down to build a dream home reflects a 10-year trend, and that unlike in 2008, current home prices show no indication a crash is coming.

California Home 1

The home in Fremont was condemned in 2013, and has three-bedrooms, and two-bathrooms.  (KTVU)

“People are purchasing homes. They’re purchasing vacant properties like this. The demand is there. The supply isn’t. These prices are sustainable,” he told KTVU.

The median home price in Fremont, which connects to Silicon Valley through several highways and with easy access to San Francisco and Oakland by train, is $1 million as of late February, according to Zillow.com, compared to $1.3 million in San Francisco and $1.28 million in Berkeley.

For residents that have been in the neighborhood for years, the spike in home prices leaves them in a difficult situation.

 

read more…

 

http://www.foxnews.com/real-estate/2018/04/19/condemned-california-home-with-holes-in-roof-mildew-sells-for-1-23-million.html

NYS high taxes versus other states | Pound Ridge Real Estate

Tax season can be stressful for the millions of Americans who owe money to Uncle Sam. Every year, the average U.S. household pays more than $5,700 in federal income taxes, according to the Bureau of Labor Statistics. And while we’re all faced with that same obligation, there is significant difference when it comes to state and local taxes. Taxpayers in the most tax-expensive states, for instance, pay three times more than those in the cheapest states.

Surprisingly, though, low income taxes don’t always mean low taxes as a whole. For example, while the state of Washington’s citizens don’t pay income tax, they still end up spending over 8% of their annual income on sales and excise taxes. Texas residents also don’t pay income tax, but spend 1.86% of their income on real estate taxes, one of the highest rates in the country. Compare these to California, where residents owe a little over 4% of their income in sales and excise taxes, and just 0.79% in real estate tax.

As this year’s tax-filing deadline, April 17, comes closer, it’s fair to wonder which states give their taxpayers more of a break. WalletHub searched for answers by comparing state and local tax rates in the 50 states and the District of Columbia against national medians. To illustrate, we calculated relative income-tax obligations by applying the effective income-tax rates in each state and locality to the average American’s income. Scroll down for the complete ranking, commentary from a panel of tax experts and a full description of our methodology.

 

Main Findings

 

Taxes by State

Overall Rank (1=Lowest) State Effective Total State & Local Tax Rates on Median U.S. Household* Annual State & Local Taxes on Median U.S. Household* % Difference Between State & U.S. Avg.** Annual State & Local Taxes on Median State Household*** Adjusted Overall Rank (based on Cost of Living Index)
1 Alaska 5.67% $3,164 -47.26% $4,353 5
2 Delaware 6.11% $3,407 -43.21% $3,909 1
3 Montana 7.29% $4,066 -32.23% $3,911 4
4 Nevada 7.44% $4,145 -30.90% $4,103 6
5 Wyoming 7.45% $4,155 -30.75% $4,417 2
6 Tennessee 7.98% $4,449 -25.84% $3,667 3
7 Idaho 8.48% $4,730 -21.16% $4,216 7
8 California 8.77% $4,888 -18.51% $7,167 36
9 Florida 8.83% $4,921 -17.97% $4,373 9
10 South Carolina 9.02% $5,030 -16.16% $4,278 11
11 Oregon 9.20% $5,129 -14.51% $5,677 34
12 Utah 9.23% $5,144 -14.25% $5,902 10
13 Colorado 9.27% $5,170 -13.82% $6,100 13
14 Alabama 9.40% $5,241 -12.64% $4,177 8
15 Arizona 9.50% $5,299 -11.67% $4,977 12
16 South Dakota 9.75% $5,439 -9.34% $4,757 16
17 North Dakota 9.84% $5,488 -8.53% $5,493 18
18 District of Columbia 10.00% $5,574 -7.09% $8,811 46
19 New Hampshire 10.27% $5,725 -4.57% $7,221 33
20 Hawaii 10.33% $5,762 -3.96% $8,277 51
21 West Virginia 10.39% $5,791 -3.48% $4,343 19
22 Louisiana 10.39% $5,795 -3.41% $4,757 17
23 Georgia 10.54% $5,876 -2.06% $5,237 14
24 North Carolina 10.64% $5,934 -1.09% $5,167 20
25 Oklahoma 10.75% $5,993 -0.11% $4,848 15
26 New Mexico 10.82% $6,031 0.53% $5,038 23
27 Virginia 10.87% $6,061 1.03% $7,276 27
28 Texas 11.04% $6,156 2.61% $5,347 21
29 Vermont 11.04% $6,158 2.64% $6,800 41
30 Missouri 11.28% $6,291 4.86% $5,435 22
31 Minnesota 11.57% $6,453 7.56% $7,085 31
32 Massachusetts 11.61% $6,470 7.85% $9,390 45
33 Washington 11.68% $6,514 8.57% $8,023 37
34 Maine 11.75% $6,554 9.24% $6,133 42
35 Indiana 11.86% $6,614 10.25% $5,667 26
36 Maryland 11.96% $6,666 11.12% $9,552 44
37 Kentucky 12.06% $6,723 12.06% $5,293 29
38 Mississippi 12.21% $6,810 13.51% $4,954 24
39 Arkansas 12.30% $6,858 14.32% $5,142 25
40 Kansas 12.42% $6,924 15.41% $6,104 28
41 Pennsylvania 12.45% $6,940 15.68% $6,642 38
42 Michigan 12.81% $7,145 19.09% $5,843 30
43 New Jersey 12.87% $7,175 19.59% $11,237 47
44 Iowa 12.92% $7,202 20.05% $6,354 32
45 Ohio 13.09% $7,300 21.68% $6,081 35
46 Wisconsin 13.62% $7,593 26.56% $7,193 40
47 Rhode Island 13.69% $7,634 27.26% $8,697 48
48 New York 13.72% $7,648 27.49% $9,759 50
49 Nebraska 13.83% $7,712 28.55% $6,776 39
50 Connecticut 13.85% $7,720 28.68% $10,419 49
51 Illinois 14.89% $8,299 38.34% $8,330 43

*Assumes “Median U.S. Household” has an annual income of $55,754 (mean third quintile U.S. income); owns a home valued at $184,700 (median U.S. home value); owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median U.S. income.
**National Average of State and Local Tax Rates = 10.78%
***Assumes “Median State Household” has an annual income equal to the mean third quintile income of the state; owns a home at a value equal to the median of the state; owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median state income.

Artwork-Best-&-Worst-States-to-be-a-Taxpayer-2018-v1

Red States vs. Blue States

 

State & Local Tax Breakdown

All effective tax rates shown below were calculated as a percentage of the mean third quintile U.S. income of $55,754 and based on the characteristics of the Median U.S. Household*.

State

Effective Real-Estate Tax Rate

Real-Estate Tax Rank ($)

Effective Vehicle Property Tax Rate

Vehicle Property Tax Rank ($)

Effective Income Tax Rate

Income Tax Rank ($)

Effective Sales & Excise Tax Rate

Sales & Excise Tax Rank ($)

Effective Total State & Local Tax Rates on Median U.S. Household*

Alabama 1.42% 2
($791)
0.29% 28
($163)
2.68% 28
($1,494)
5.01% 39
($2,793)
9.40%
Alaska 3.93% 33
($2,190)
0.00% 1
($0)
0.10% 6
($56)
1.65% 4
($918)
5.67%
Arizona 2.56% 16
($1,427)
0.72% 38
($403)
1.57% 13
($873)
4.66% 35
($2,595)
9.50%
Arkansas 2.08% 10
($1,161)
0.43% 29
($239)
2.66% 27
($1,483)
7.13% 50
($3,975)
12.30%
California 2.62% 17
($1,461)
0.28% 27
($156)
1.40% 11
($781)
4.47% 30
($2,491)
8.77%
Colorado 1.90% 7
($1,058)
0.77% 40
($428)
2.54% 25
($1,414)
4.07% 24
($2,269)
9.27%
Connecticut 6.70% 48
($3,733)
1.09% 47
($609)
2.25% 19
($1,255)
3.81% 18
($2,123)
13.85%
Delaware 1.81% 4
($1,009)
0.00% 1
($0)
3.03% 33
($1,689)
1.27% 3
($708)
6.11%
District of Columbia 1.84% 5
($1,026)
0.00% 1
($0)
3.72% 46
($2,072)
4.44% 28
($2,475)
10.00%
Florida 3.38% 27
($1,885)
0.00% 1
($0)
0.00% 1
($0)
5.45% 44
($3,037)
8.83%
Georgia 3.07% 25
($1,712)
0.00% 1
($0)
3.17% 35
($1,768)
4.30% 26
($2,396)
10.54%
Hawaii 0.90% 1
($501)
0.00% 1
($0)
3.85% 47
($2,147)
5.59% 46
($3,115)
10.33%
Idaho 2.52% 13
($1,404)
0.00% 1
($0)
2.13% 16
($1,185)
3.84% 20
($2,141)
8.48%
Illinois 7.69% 50
($4,288)
0.00% 1
($0)
2.82% 30
($1,572)
4.37% 27
($2,439)
14.89%
Indiana 2.88% 23
($1,606)
0.54% 33
($300)
3.71% 45
($2,068)
4.73% 36
($2,640)
11.86%
Iowa 4.95% 38
($2,762)
0.43% 30
($240)
3.03% 34
($1,691)
4.50% 31
($2,509)
12.92%
Kansas 4.63% 37
($2,580)
0.89% 43
($495)
1.78% 15
($994)
5.12% 40
($2,855)
12.42%
Kentucky 2.83% 21
($1,579)
0.52% 31
($292)
4.87% 51
($2,716)
3.83% 19
($2,135)
12.06%
Louisiana 1.68% 3
($934)
0.04% 25
($24)
2.17% 18
($1,212)
6.50% 49
($3,624)
10.39%
Maine 4.38% 35
($2,444)
1.03% 45
($576)
2.54% 26
($1,416)
3.80% 17
($2,117)
11.75%
Maryland 3.64% 31
($2,030)
0.00% 1
($0)
4.30% 49
($2,395)
4.02% 23
($2,241)
11.96%
Massachusetts 4.01% 34
($2,238)
0.97% 44
($540)
3.67% 44
($2,046)
2.95% 6
($1,646)
11.61%
Michigan 5.66% 43
($3,158)
0.25% 26
($142)
3.32% 37
($1,850)
3.58% 11
($1,995)
12.81%
Minnesota 3.86% 32
($2,155)
0.56% 35
($311)
2.94% 32
($1,640)
4.21% 25
($2,347)
11.57%
Mississippi 2.64% 19
($1,470)
1.46% 49
($813)
2.34% 21
($1,303)
5.78% 47
($3,224)
12.21%
Missouri 3.30% 26
($1,842)
1.08% 46
($600)
2.91% 31
($1,625)
3.99% 22
($2,224)
11.28%
Montana 2.82% 20
($1,570)
0.55% 34
($307)
2.76% 29
($1,541)
1.16% 2
($646)
7.29%
Nebraska 6.05% 45
($3,371)
0.69% 36
($383)
2.53% 24
($1,410)
4.57% 32
($2,548)
13.83%
Nevada 2.56% 15
($1,425)
0.76% 39
($423)
0.53% 8
($295)
3.59% 12
($2,002)
7.44%
New Hampshire 7.24% 49
($4,038)
0.77% 41
($432)
0.60% 9
($335)
1.65% 5
($920)
10.27%
New Jersey 7.96% 51
($4,437)
0.00% 1
($0)
1.40% 11
($781)
3.51% 9
($1,957)
12.87%
New Mexico 2.53% 14
($1,408)
0.00% 1
($0)
2.16% 17
($1,204)
6.13% 48
($3,419)
10.82%
New York 5.48% 42
($3,057)
0.00% 1
($0)
3.49% 40
($1,945)
4.75% 37
($2,647)
13.72%
North Carolina 2.84% 22
($1,581)
0.54% 32
($299)
3.62% 43
($2,018)
3.65% 15
($2,035)
10.64%
North Dakota 3.49% 28
($1,947)
0.00% 1
($0)
0.78% 10
($432)
5.58% 45
($3,108)
9.84%
Ohio 5.18% 40
($2,890)
0.00% 1
($0)
3.34% 38
($1,862)
4.57% 33
($2,548)
13.09%
Oklahoma 2.94% 24
($1,638)
0.00% 1
($0)
2.44% 23
($1,360)
5.37% 42
($2,994)
10.75%
Oregon 3.53% 30
($1,970)
0.00% 1
($0)
4.74% 50
($2,640)
0.93% 1
($519)
9.20%
Pennsylvania 5.14% 39
($2,867)
0.00% 1
($0)
3.90% 48
($2,174)
3.40% 8
($1,898)
12.45%
Rhode Island 5.46% 41
($3,047)
2.05% 51
($1,144)
2.30% 20
($1,282)
3.88% 21
($2,162)
13.69%
South Carolina 1.89% 6
($1,056)
1.17% 48
($651)
2.35% 22
($1,310)
3.61% 14
($2,013)
9.02%
South Dakota 4.39% 36
($2,446)
0.00% 1
($0)
0.00% 1
($0)
5.37% 41
($2,992)
9.75%
Tennessee 2.47% 12
($1,376)
0.00% 1
($0)
0.10% 6
($56)
5.41% 43
($3,017)
7.98%
Texas 6.16% 46
($3,435)
0.00% 1
($0)
0.00% 1
($0)
4.88% 38
($2,720)
11.04%
Utah 2.22% 11
($1,240)
0.00% 1
($0)
3.35% 39
($1,869)
3.65% 15
($2,035)
9.23%
Vermont 5.89% 44
($3,285)
0.00% 1
($0)
1.61% 14
($896)
3.55% 10
($1,977)
11.04%
Virginia 2.63% 18
($1,467)
1.74% 50
($971)
3.49% 41
($1,947)
3.00% 7
($1,675)
10.87%
Washington 3.52% 29
($1,962)
0.00% 1
($0)
0.00% 1
($0)
8.16% 51
($4,552)
11.68%
West Virginia 1.94% 8
($1,082)
0.71% 37
($398)
3.29% 36
($1,833)
4.44% 29
($2,478)
10.39%
Wisconsin 6.46% 47
($3,602)
0.00% 1
($0)
3.56% 42
($1,985)
3.60% 13
($2,006)
13.62%
Wyoming 2.03% 9
($1,130)
0.77% 41
($432)
0.00% 1
($0)
4.65% 34
($2,593)
7.45%

*Assumes “Median U.S. Household” has an income equal to $55,754 (mean third quintile U.S. income); owns a home valued at $184,700 (median U.S. home value); owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median U.S. income.

 

Ask the Experts: Best Tax Advice

For more insight into the impact state and local taxes have on migration and public policy, we turned to a panel of leading tax and policy experts. You can check out their bios and responses below.

  1. Do people usually consider taxes when deciding where to live? Should they?
  2. How can state and local tax policy be used to attract new residents and stimulate growth?
  3. Which states have particularly complicated tax rules for families?
  4. How has the total amount families pay in state and local taxes changed as a result of the new tax code?
  5. Which states have the best mix of taxes and government services?
  6. Should people pay taxes based on where they live or where they work?

read more…

 

https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/

New home sales fall again | Waccabuc Real Estate

Sales of new single-family houses in the United States shrank 0.6 percent month-over-month to a seasonally adjusted annual rate of 618 thousand in February of 2018 from an upwardly revised 622 thousand in January. It is the lowest reading in four months and compares with market forecasts of a 4.4 percent rise to 623 thousand. Sales fell in the West and the Midwest. New Home Sales in the United States averaged 650.65 Thousand from 1963 until 2018, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011.

 

US New Home Sales Fall for 3rd Month

Sales of new single-family houses in the United States shrank 0.6 percent month-over-month to a seasonally adjusted annual rate of 618 thousand in February of 2018 from an upwardly revised 622 thousand in January. It is the lowest reading in four months and compares with market forecasts of a 4.4 percent rise to 623 thousand. Sales fell in the West and the Midwest.

Sales fell in the West (-17.6 percent to 164 thousand) and the Midwest (-3.7 percent to 79 thousand) but rose in the South (9 percent to 338 thousand) and the Northeast (19.4 percent to 37 thousand).
The median sales price of new houses sold was $326,800, above $298,000 a year earlier. The average sales price was $376,700, also higher than $370,500 in February of 2017.
The stock of new houses for sale went up 2 percent from the previous month to 305 thousand, the highest level since March of 2009. This represents a supply of 5.9 months at the current sales rate.
Year-on-year, new home sales edged up 0.5 percent.
read more…
https://tradingeconomics.com/united-states/new-home-sales

Fed raises rates | Pound Ridge Real Estate

Federal Reserve officials, meeting for the first time under Chairman Jerome Powell, raised the benchmark lending rate a quarter-point and forecast a steeper path of hikes in 2019 and 2020, citing an improving economic outlook. Policy makers continued to project a total of three increases this year.

“The economic outlook has strengthened in recent months,” the policy-setting Federal Open Market Committee said in a statement Wednesday in Washington. Officials repeated previous language that they anticipate “further gradual adjustments in the stance of monetary policy.”

The upward revision in their rate path suggests Fed officials are looking through soft first-quarter economic reports and expect a lift this year and next from tax cuts passed by Republicans in December. Financial conditions have tightened since late January as investors look for signs that the central bank might raise rates at a faster pace, while forecasters predict stronger U.S. growth and tight labor markets.

The vote to lift the federal funds rate target range to 1.5 percent to 1.75 percent was a unanimous 8-0.

The latest set of quarterly forecasts forecasts showed that policy makers were divided over the outlook for the benchmark interest rate in 2018. Seven officials projected at least four quarter-point hikes would be appropriate this year, while eight expected three or fewer increases to be warranted.

In the forecasts, U.S. central bankers projected a median federal funds rate of 2.9 percent by the end of 2019, implying three rate increases next year, compared with two 2019 moves seen in the last round of forecasts in December. They saw rates at 3.4 percent in 2020, up from 3.1 percent in December, according to the median estimate.

Inflation Pickup

In another change to the statement, the Fed said inflation on an annual basis is “expected to move up in coming months,” after saying “move up this year” in the January statement. Price gains are still expected to stabilize around the Fed’s 2 percent target over the medium term, the FOMC said.

The central bank’s preferred price gauge rose 1.7 percent in the 12 months through January and officials projected it to rise to 2 percent in 2019 and hit 2.1 percent the following year, the latest estimates showed. The estimates for inflation excluding food and energy, which officials see as a better way to gauge underlying price trends, rose to 2.1 percent in 2019 and 2020 from 2 percent seen in December.

“Job gains have been strong in recent months, and the unemployment rate has stayed low,” the FOMC said. The statement said that household spending and business investment “have moderated” from strong fourth-quarter readings.

The statement also repeated previous language that “near-term risks to the economic outlook appear roughly balanced.”

Powell will hold his first post-FOMC press conference at 2:30 p.m. local time.

Supply, Demand

The Fed’s goal is to keep supply and demand in balance in the economy amid a tight labor market, without lifting borrowing costs so quickly that the economy stalls.

Officials have had to factor in the impact of fiscal stimulus signed by President Donald Trump since their previous projections.

The median estimate for economic growth this year rose to 2.7 percent from 2.5 percent in December, signaling confidence in U.S. consumers despite recent weak readings on retail sales that have pushed down tracking estimates of first-quarter activity. The 2019 estimate rose to 2.4 percent from 2.1 percent.

The committee’s forecast for the long-run sustainable growth rate of the economy was unchanged at 1.8 percent, suggesting policy makers are still skeptical of the effect of tax cuts on the economy’s capacity for growth. The 2020 gross domestic product growth median projection was also unchanged at 2 percent.

While U.S. unemployment of 4.1 percent is the lowest since 2000, wage growth has remained moderate and inflation has been below the Fed’s target for most of the last five years.

The median projection for the long-run fed funds rate ticked up to 2.9 percent from 2.8 percent in December. The Fed had been gradually reducing its estimate of the long-run neutral fed funds rate since it began publishing its calculations in January 2012.

 

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https://www.bloomberg.com/news/articles/2018-03-20/

London prices falling | Waccabuc Real Estate

House prices in some of London’s wealthiest boroughs plummeted as much as 14.9% in the year to January, dragging down the average price in the capital—and in England—according to a report Monday by real estate consultants Acadata.

Prices in the capital fell 0.8% in January from December, to £593,396 (US$825,318). That’s down 2.6% annually, the report said, the biggest fall since August 2009, when the recession was still in full swing.

Price growth across the U.K. has likely been weighed down by uncertainties surrounding Brexit, along with 2016’s 3% surcharge on second homes and buy-to-let properties. “Subsequent to the introduction of this tax, the rates of price growth have been falling, and at an accelerated rate since September 2017,” the report said.

No doubt the fall is more acutely felt in London, a hotspot for international investors.

The biggest drops were logged in the priciest boroughs.

Wandsworth saw the largest dip, with the average price declining 14.9% in the year to January, to £685,567 (US$953,514) from £805,460 (US$1.12 million) the prior year. The City of London followed, where prices are now £844,768 (US$1.17 million), down 10.8% from last January and in Islington, prices are down 8.8% to £684,869 (US$952,543).

But in the city’s most expensive borough, Kensington and Chelsea, prices rose 4.6% up to £2.16 million (US$3 million).

Combined, the most expensive 11 boroughs fell by 3.8%, while mid-priced boroughs are down an average 2.7%, according to the report.

The less expensive boroughs fared better. More than half logged price rises over the last year, led by Bexley, which saw its average price rise 4.5% to £363,082 (US$504,988). In Barking and Dagenham, which has the lowest priced property in the capital, according to the report, prices inched up 0.1% to £300,627 (US$418,124).

Brent, in northwest London and home to Wembley Stadium, logged the largest price increases, up 8.5% to £587,372 (US$816,940).

 

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www.mansionhomes.com

Single-family houses constructed at best pace in more than a decade | Waccabuc Real Estate

Construction of new homes increased 3.3 percent in November — with the gain largely coming from single-family houses being built at the strongest pace in more than a decade.

The Commerce Department said Tuesday that builders broke ground on homes last month at a seasonally adjusted annual rate of 1.3 million units. The increase marks a key moment in the recovery from the Great Recession: Builders started work on single-family houses at the fastest pace since September 2007, which was just a few months before the start of that economic downturn.

Ralph McLaughlin, chief economist at the real estate company Trulia, said completed new homes are likely to finish at a post-recession high, but completions are still just 65 percent of their 50 year-average.

Driving the rebound in home construction has been a shortage of existing properties being listed for sale.

Fewer people are putting their property on the market, despite healthy demand from buyers because the unemployment rate is at a 17 year-low and mortgage rates remain at attractive levels. New construction has filled some of this gap with starts on single-family houses rising 8.7 percent so far this year.

Still, not enough new homes are being built to totally end the supply squeeze. Over the past year, the number of sales listings for the much larger market for existing homes has fallen 6.4 percent.

The construction growth last month came from the South and West, while the Northeast and Midwest reported declines.

Builders are also backing away from the apartment rentals that until recently were a driving force behind the rebound in residential construction. Ground breakings for multi-family buildings such as apartment complexes have declined 8.5 percent year-to-date.

The move away from apartment construction has corresponded with a shift by the millennial population toward buying homes, said Mark Fleming, chief economist at First American Financial, a real estate transactions firm.

“The last two quarters have seen an increase, specifically a shift from renter occupied to owner occupied households, as Millennials age out of rentership and into homeownership,” Fleming said.

Building permits, an indicator of future construction, slipped 1.4 percent in October to 1.3 million. But the number of permits authorized so far this year has increased 5.8 percent.

Relatively low mortgage rates have helped would-be homebuyers, even as property prices have climbed faster than wages. The average rate on 30-year fixed-rate U.S. mortgages was 3.93 percent last week, slightly better than the 4.16 percent rate a year ago, according to mortgage Freddie Mac.

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https://www.usnews.com/news/business/articles/2017-12-19/us-housing-starts-rose-33-percent-in-november

Mortgage rates average 3.93% | Waccabuc Real Estate

Freddie Mac (OTCQBFMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates holding relatively flat across the board.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.93 percent with an average 0.5 point for the week ending December 14, 2017, down from last week when it averaged 3.94 percent. A year ago at this time, the 30-year FRM averaged 4.16 percent.
  • 15-year FRM this week averaged 3.36 percent with an average 0.5 point, the same as last week. A year ago at this time, the 15-year FRM averaged 3.37 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.36 percent this week with an average 0.3 point, up from last week when it averaged 3.35 percent. A year ago at this time, the 5-year ARM averaged 3.19 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Len Kiefer, Deputy Chief Economist.
“As widely expected, the Fed increased the federal funds target rate this week for the third time in 2017. The market had already priced in the rate hike so long term interest rates, including mortgage rates hardly moved. Mortgage rates held relatively flat across the board, with the 30-year fixed mortgage rate inching down 1 basis point to 3.93 percent in this week’s survey. Mortgage rates have been in a holding pattern for the fourth quarter, remaining within a 10 basis point range since October.”

Senate tax reform bill | Waccabuc Real Estate

Earlier this week the Senate jumped into the fray, releasing its own proposal for tax reform. The Senate’s proposal, much like the House bill, which we looked at last week, creates significant headwinds for homeowners and homebuyers, while providing only a temporary cut for middle class homeowners.

What Stays the Same?

Like the House bill, the Senate chose to change the definition for capital gains so that a home seller must have lived in their home for at least five of the prior 8 years. This change would affect 12% to 22% of home sellers, locking in some inventory and potentially changing the trade-up purchase process.

The Senate also proposed to eliminate personal exemptions as the House did, but they chose to increase the child credit to $2000 per child. This latter change is more generous than the House’s $1,600 credit per child and $300 for each parent.

Pouring SALT in the Wound

Unlike the House bill, the Senate chose to eliminate all state and local taxes (SALT) including state and local income and sales taxes as well as state and local real estate taxes. This change will make it more difficult for homeowners to itemize their mortgage interest and when they do, they will face a much lower benefit from homeownership. In a perverse way, only those who can afford very expensive homes will be able to benefit from the real estate provisions of the tax code.

Tax Reform - Standard Deduction vs Itemize on a Home Purchase in Illinois

The generous $24,000 standard deduction for couples who are renter or owners provides little support for renters who move to ownership nor does it guarantee that tax cuts today will be utilized to boost housing affordability in the future. Worse, when this provision expires in 8 years, both groups will be worse off.

Time Does Not Heal All Wounds

Most forecasts are for home prices and mortgage rates to rise in the coming years. The chart below shows how the proposals from the House and Senate compare with current law. The orange bars depict the difference between the Senate proposal and current law. A home buying family of four with an income of $100,000 or less would see a gain, while upper-middle income buyers would face a tax hike. However, in 5 years1 that tax cut would disappear for nearly all middle-income homebuyers as mortgage rates and prices rise (red bars). Finally, after 8 years, the tax cuts and enhanced standard deduction both expire letting virtually no buyers benefit under the plan (dark blue bars).

Chart Comparing Tax Plans for a Family of Four Over Time: Current vs Proposed

The Senate’s proposal reflects many new changes, but retains many facets of the House proposal. While some changes help middle class homeowners today, it appears that the changes quickly wear out and are worse in the future.

 

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https://www.nar.realtor/washington-report/senate-takes-a-stab-at-tax-reform?om_rid=AAAAAA&om_mid=&om_ntype=NARWeekly&om_rid=AACWMk&om_mid=_BaFb17B9iRicam&om_ntype=NARWeekly

HVAC Issues | South Salem Real Estate

An efficient HVAC system can you save you loads of money in the long run and keep your home nice and comfortable throughout the year. Problems in the ductwork, however, can quickly consume your energy budget and make it hard to heat and cool certain areas of the home. If you suspect your HVAC system is not working properly, follow this short guide to help identify and fix common ductwork problems.

Abnormal Energy Bills

A collection of gas bills with a calculator and pen on a desk.

A sudden spike in your energy bill is a good sign that your home’s HVAC system is compromised. Leaky connectors and poor designs lead to air flow loss, which makes the system work harder to heat and cool the home. This in turn expends more energy and runs up the electricity bill.

Noisy Ductwork

Another good indication of a bad HVAC system is noisy ductwork. In rectangular ducting, these noises are usually the result of the metal expanding and contracting. It should be noted that noises are typical when the system first turns on or off. You should be concerned, however, if the noises continue while the system is running. If you hear a whistling sound, for example, you are likely dealing with vent covers that are too small for the system.

Uneven Temperatures

A lady wearing a furry coat holding a blanket.

If you have areas of the home that are hard to heat and cool or get overly stuffy, your HVAC system probably has a leak or two. Uneven temperatures are caused by poor air flow because the system is simply losing too much air to properly do its job. In extreme cases, you will not be able to heat or cool certain areas of the home even if the thermostat is turned to its highest setting.

Finding Problem Areas

Detecting problems in the ducting is a straightforward process. The biggest issues typically include bad seals around joints, improperly seated vents, and poorly supported ducts. You might also examine the overall design of the ductwork as the installer may have made mistakes in the original installation. Look for areas that feature sharp turns in the ducting as this can significantly reduce air flow.

Feeling

Feeling airflow from a vent.

You can also feel for air loss with your hands. Start by feeling the air pressure coming out of vents in multiple rooms. If you detect a difference between vents, then you know you have a leak somewhere in line with that vent. You can narrow down the location of the leak by using some incense, toilet paper, or wet fingertips. The incense and toilet paper will move or your fingers will get cold when coming in contact with the leak.

Visual Examination

Examine the ducting for any obvious signs of gaps, holes, and cracks. The most likely problem areas include connections and seams, and places where the ducting links up with the ceiling, floor, registers, and vents. For flexible ducting, ensure the pieces are not crimped or tangled.

Fixing Ductwork Leaks

Once you locate the problem area, it’s time for a little repair. All you need to repair leaky ductwork is some HVAC-grade aluminum foil, a putty knife, gloves, and a few cloths. Begin by cleaning the area with a damp cloth and keep a lookout for any sharp edges. It’s recommended to use mastic for loose fittings, though foil tape can also prevent air loss. Just make sure the connection is tightened up and the screws are back in place before you apply tape. If you detect any major cracks in the ducting, you may need to replace the section with a new piece of sheet metal.

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http://www.doityourself.com/stry/how-to-identify-ductwork-problems?utm_medium=Email&utm_source=ExactTarget&utm_campaign=