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Armonk Real Estate for Sale

Freddie Mac real estate outlook | Armonk Real Estate

Freddie Mac (OTCQB: FMCC) released today its monthly Outlook for October showing that housing remains a bright spot in the face of a marginally improving U.S. economy and tight inventories of for-sale homes. However, mortgage activity, which has benefited greatly from low mortgage rates post-Brexit, is starting to see a slowdown in refinance activity that will persist into next year as the mortgage market transitions to a purchase-dominated mix.

Outlook Highlights

  • Continued strength in consumer spending and a reduction in the drag from inventory spending should boost second half growth, resulting in full-year 2016 GDP growth of 1.6 percent. The economy should do modestly better in 2017, posting 1.9 percent year-over-year growth.
  • A mature expansion operating near full employment only needs to generate enough jobs to keep the unemployment rate steady. Expect the unemployment rate to decline slightly over the next year-and-a-half, ending 2017 at 4.7 percent.
  • Even if worldwide bond yields recover to the pre-Brexit status quo, mortgage interest rates are likely to remain low for an extended period. Expect a gradual rise in rates throughout the remainder of 2016 and into 2017, with the 30-year fixed-rate mortgage averaging 3.9 percent in the fourth quarter of 2017.
  • Don’t expect much increase in total home sales going forward with a slight decline in seasonally-adjusted sales in the fourth quarter. Next year, rising new home sales driven by increases in new single-family housing construction will push total home sales slightly higher, to 6.16 million in 2017 compared to 6.04 million in 2016.
  • Forecasting house prices will grow at a 5.6 percent annual rate in 2016, moderating to 4.7 percent in 2017.

Quote: Attributed to Sean Becketti, Chief Economist, Freddie Mac.

“The economy and labor markets are looking better. We’re even seeing modest wage gains. And Fed watchers are increasingly predicting a December rate hike as things improve. However, worldwide economic growth is weak and its prospects have gotten worse. This may all sound familiar because we’ve been here before… last year.

“As the economy sputters along a little bit faster than stall speed, the U.S. housing market continues to be a bright spot, though there’s less room to run than in the prior few years. Unlike new home sales, existing home sales have nearly recovered back to pre-recession norms. Regardless, we see new home sales improving some next year driven by increases in new single-family housing construction which will push total home sales slightly higher.”





Will Airbnb disrupt the housing market? | Armonk Real Estate

Crowds press together in the streets of New Orleans as people gather to see the city’s festivities, but this year, there’s something different about the tourists. This year, instead of staying in the city’s hotels, more tourists are pouring into residential areas after using an app to quickly book a home for the week.

Airbnb, founded in 2008 as an online marketplace for short-term rentals, has seen its business grow exponentially in the last few years. In 2014, rooms available through the site jumped from 300,000 in February to more than 1 million in December, outpacing many of the largest hotel groups in the world. In May of 2016 Airbnb had almost 1.4 listings on the site and raised its revenue projection for this year to more than $900 million.

But the site impacts more than just hotel chains. As more investors, not just homeowners, use the site to rent out spare rooms — and even spare couches — it strains the supply of rental houses.

This is especially true in a place like New Orleans, where rising home prices have caused serious affordability problems. Home prices have risen 46% since Hurricane Katrina hit, according to an article by Katherine Sayre for The Times-Picayune.

Besides the number of lives lost, the most tangible impact the hurricane had on the city was the demolition of its housing stock, where 26% to 34% of its housing was lost or damaged, according to an article by Allison Plyer for The Data Center. The Center’s “The New Orleans Index” was the most widely used means of tracking rebuilding efforts in the months and years following Hurricane Katrina.

As of February 2016, Airbnb had a total of 3,621 active listings in New Orleans, according to data from Inside Airbnb, a non-commercial set of tools and data that shows how Airbnb is being used in different cities around the world.

Of course, there would seem to be a correlation between the rise in home prices and the gains in the app’s popularity, however, correlation does not always equal causation.

In order to truly understand the app’s effects, or lack thereof, you have to look deeper.

One letter circulating on Facebook entitled “Dear Airbnb Renter!” talks about what it sees as the dangers of Airbnb.

“The spread of tourism into residential neighborhoods is pushing out the people who live there,” the letter stated. “When landlords can get so much more for a property on Airbnb they no longer want to rent to actual working New Orleanians. Even residents that own their home are finding it difficult to pay their taxes because of the rising property values.”

That kind of outcry has reached lawmakers. In a letter sent on July 13 to Federal Trade Commission Chairwoman Edith Ramirez, several prominent senators expressed their concern. Sens. Brian Schatz, D-Hawaii; Elizabeth Warren, D-Mass, and Diane Feinstein, D-Calif, stated that they are especially concerned that short-term rentals are not only making housing more expensive in certain communities, but also making it harder to buy a house in the first place.





House Prices to Median Household Income | Armonk Real Estate

The Census Bureau released the Income, Poverty and Health Insurance Coverage in the United States: 2015 this morning. The report showed a significant increase in the real median household income and a decline in poverty.  For an overview, see from Nick Timiraos and Janet Adamy at the WSJ: U.S. Household Incomes Surged 5.2% in 2015, First Gain Since 2007 and from Jason Furman, Sandra Black, and Matt Fiedler at the CEA: Income, Poverty, and Health Insurance in the United States in 2015

One of the metrics to follow is a ratio of house prices to incomes.   The following graphs use annual averages of house prices indexes – Case-Shiller and CoreLogic – and the nominal median household income (and the mean for the fourth fifth income) through 2015.

Note: Most reporting today is on the REAL median household income (adjusted for inflation over time).  These graphs use nominal income since we are comparing to nominal house prices.

House Prices and Median Household IncomeClick on graph for larger image.

This graph shows the ratio of house price indexes divided by the Median Household Income through 2015 (the HPI is first multiplied by 1000).

This uses the annual average CoreLogic and the National Case-Shiller index since 1976.

As of 2015, house prices were above the median historical ratio – but far below the bubble peak.

The second graph is similar but uses the mean of the fourth fifth household income (if we separate households into fifths, this is the second highest income group).

House Prices and WagesThese are key households since they are more likely to be homeowners (and home buyers).

Using this group, prices are well below the bubble peak.

Going forward, I think it would be a positive if incomes outpaced house prices, or at least kept pace with house prices increases for a few years.


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Home builder confidence surged in September | Armonk Real Estate

Home builder confidence surged in September to match its highest reading in a decade, an industry group said Monday.

The National Association of Home Builders’ index jumped six points to 65 in September. That was the highest since last October, which was the highest since the height of the housing boom. Economists surveyed by MarketWatch had forecast a 60 reading.

The gauge of current sales conditions soared 6 points to a cycle high of 71 and the index of future sales jumped 5 points, also touching 71. The index that tracks buyer traffic rose four points to 48. It hasn’t topped the neutral 50 mark since mid-2005.

In a release, NAHB noted that builder sentiment is being bolstered by the presence of “more serious buyers.”


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Greenwich Ct. Is Worst U.S. Home Market | Armonk Real Estate

Barry Sternlicht, chairman and chief executive officer of Starwood Capital Group LLC, said his former town of Greenwich, Connecticut, may be the worst housing market in the U.S.

“You can’t give away a house in Greenwich,” Sternlicht said Tuesday at the CNBC Institutional Investor Delivering Alpha Conference in New York.

The town — about 45 minutes north of Manhattan and home to some of the country’s largest hedge funds — is seeing a pile-up of houses on the market and prices that are faltering as properties linger. Home sales in the second quarter fell 18 percent from a year earlier to 169 deals, according to a report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

At the same time, new listings surged 27 percent. The absorption period, or the time it would take to sell all the homes on the market at the current pace, was 12 months, compared with 7.7 months a year earlier, Miller Samuel and Douglas Elliman said.


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Aging in Place Is Fastest-Growing Segment in Residential Remodeling | Armonk Real Estate

The Richmond Times Dispatch’s Carol Hazard writes on the growing trend among baby boomers: aging in place. According to the National Association of Home Builders, home modifications are the fastest-growing segment in residential remodeling.

To look at how one woman is changing her home, Hazard interviewed Donna Edgerton, who had an elevator shaft installed, which she will eventually turn it into an actual elevator. Furthermore, she added an open-plan kitchen and family room. She also widened the doors throughout the home to at least 3 feet to accommodate a wheelchair and a walker, along with choosing drawers over cabinets in her kitchen to better mange things around her home. Edgerton’s home renovation now includes doors and faucet features with lever handles rather than knobs, along with a bathroom that has a built-in bench, sinks that allow for a wheelchair, and tilted mirrors.

Aging in place has allowed baby boomers to not move, continue to enjoy their neighborhoods and communities, and enjoy the new amenities of their homes.

As the Richmond Times-Dispatch reports:

In the Richmond area, the number of people ages 65 and older will outnumber the school-age population for the first time in history over the next 15 years, according to a 2015 report by the Greater Richmond Age Wave, a collaboration of public and private organizations working to prepare for the region’s growing aging population.

By 2040, the number of people 85 and older (40,541) in the area will have more than quadrupled since 2000, according to the report.

“One of the biggest challenges over the next decade is how we will accommodate the growing senior population and make sure the houses they live in and the housing choices they make will be suitable for their changing needs,” said Bob Adams, executive director of Virginia Accessible Housing Solutions, whose EasyLiving Home program is designed to encourage builders to include accessibility features in home design and construction.

The problem is particularly acute in rural areas, as young people leave for urban areas and the number of senior households increases, Adams said.

“The number of seniors who live alone is growing dramatically in these areas,” he said, “and they are more susceptible to being isolated.”


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So California home prices jump | Armonk Real Estate

The Southern California housing market is red-hot again.

Home prices in the region have been climbing steadily, as they have nationwide, toward record levels not seen since the 2008 housing crisis plunged the country into a severe recession.

The S&P/Case-Shiller home price index, a widely followed gauge of the market, showed that prices in the Los Angeles market in April stood at their highest point since October 2007.

The median home price in Orange County in May was $651,500, surpassing its bubble-era peak reached in 2007, according to the real estate data firm CoreLogic.

Interest rates of about 3.5% or less for 30-year, fixed-rate mortgages  not far off the all-time low of 3.31% in November 2012  have helped fuel the gains.

Dana Kuhn is a lecturer at the Corky McMillin Center for Real Estate at San Diego State University, and we asked him to summarize the market and what it means for would-be buyers and sellers. Here’s an edited excerpt:

Has the Southern California housing market completely recovered from the recession?

In the most desirable markets, that’s essentially true. That would be West Coast large-metro areas. The San Francisco Bay Area is now priced above its peak numbers of the last decade. Orange County, too, and Los Angeles and San Diego are getting very close to their former peaks. Seattle is doing really well. Portland is doing well.

One of the worst-hit areas in the housing crisis was the Inland Empire. How is that region faring?

That was the real subprime [mortgage] disaster area. Those markets have been slower to recover. There are areas like the Inland Empire that are probably only between 80% and 85% of [their pre-bubble] peak.

Is it surprising that it’s taken this long?

Yes and no. Given how severe the recession was, there was so little production [of new housing] in that time. There was a four-year period between September 2008 and September 2012 when the nation’s housing starts were below all previous troughs going back some 40 years. And in those previous troughs, what you typically had was one year at that nadir, and then you’d climb back up fairly quickly. But we had four years below all of those troughs, and so production obviously fell behind demand.

So there was a huge pent-up demand when people started getting jobs and believing in housing again. The industry has struggled to keep up with it in the more desirable markets.

Is that driving the surge in prices?

Yes. Like most things, it’s a supply/demand situation. The number of [housing] starts hasn’t been able to take care of that pent-up demand. The pricing has gone up accordingly, and that has been accommodated by low [mortgage] interest rates. Continued low interest rates have in essence subsidized a rapid ascent in pricing.

Why is it tough to add more housing to the supply in Southern California?

Land is increasingly scarce, and that’s forcing people to build up rather than out. And those higher-density projects are more sensitive politically, more difficult to get approved and take longer to get through the pipeline. You can have agreement about needing more housing in a given market, but when it actually comes down to [building] those 300 units on that corner in that neighborhood, you get resistance. So it can take years in Southern California coastal areas to get [those] projects approved. That’s true whether it’s a for-sale product or a rental market.

This all sounds good for sellers, but is it a tough time to be a buyer?

Yes. Unfortunately real [inflation-adjusted] wage growth hasn’t kept up with that surge in pricing. It’s significantly harder to buy something now than it was a few years ago because people’s wages just haven’t kept up, even though interest rates are still the same.

The median price of a house in Los Angeles County is above a half-million dollars. How does a first-time buyer afford that?

They don’t buy that house. That’s the middle of a statistical group. Your first-time buyer is pretty much forced to buy a [less-expensive] attached product, not detached.

Like a condominium?

Yes. And they’re probably not going to be able to afford to buy that unit in the same neighborhood in which they would rent if they were renters. So they have to make a lifestyle concession in order to become homeowners.

Meaning they would build up equity in that house, then later sell it in hopes of buying one in the neighborhood they desire?

Right. Also, the millennial generation [18 to 34 years old] has eschewed the concept of home ownership because they saw their parents and others get burned in the last downturn and because they prefer lifestyle over ownership.

But as they get older and have kids they’ll have a different outlook. And as their wages increase, they’re also going to realize the importance of the mortgage deduction  the tax benefits that come from home ownership  and there will be move back toward home ownership.


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Remodeling: 2016 Cost vs Value Report | Armonk Real Estate

This site compares average cost for 30 popular remodeling projects with the value those projects retain at resale in 100 U.S. markets. Check out this year’s trends and how they compare to prior years.
2016 National Averages
Attic Insulation (fiberglass) $1,268 $1,482 116.9%
Backup Power Generator $12,712 $7,556 59.4%
Basement Remodel $68,490 $48,194 70.4%
Bathroom Addition $42,233 $23,727 56.2%
Bathroom Remodel $17,908 $11,769 65.7%
Deck Addition (composite) $16,798 $10,819 64.4%
Deck Addition (wood) $10,471 $7,850 75.0%
Entry Door Replacement (fiberglass) $3,126 $2,574 82.3%
Entry Door Replacement (steel) $1,335 $1,217 91.1%
Family Room Addition $86,615 $58,807 67.9%
Garage Door Replacement $1,652 $1,512 91.5%
Major Kitchen Remodel $59,999 $38,938 64.9%
Manufactured Stone Veneer $7,519 $6,988 92.9%
Master Suite Addition $115,810 $74,224 64.1%
Minor Kitchen Remodel $20,122 $16,716 83.1%
Roofing Replacement $20,142 $14,446 71.7%
Siding Replacement $14,100 $10,857 77.0%
Two-Story Addition $171,056 $118,555 69.3%
2016 National Averages
Bathroom Addition $79,380 $45,006 56.7%
Bathroom Remodel $57,411 $32,998 57.5%
Deck Addition (composite) $37,943 $21,877 57.7%
Garage Door Replacement $3,140 $2,830 90.1%
Grand Entrance (fiberglass) $7,971 $5,545 69.6%
Major Kitchen Remodel $119,909 $73,707 61.5%
Master Suite Addition $245,474 $140,448 57.2%
Window Replacement (vinyl) $14,725 $10,794 73.3%
Window Replacement (wood) $18,087 $13,050 72.1%
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Local Market Conditions Shape How Interest Rates Impact Prices | Armonk Real Estate

Local market conditions raging from supply and demand to local population growth have a substantial impact on how federal monetary policy affects home prices, according to new study to be published in the Journal of Housing Economics next month.

Motivated by the fact that the period of house price inflation prior to the economic downturn in 2008-9 was characterized by significant differences in inflation rates across markets, economists at the Swiss Institute of Banking and Finance and Middle Tennessee State University found that the vast differences in home price inflation rates experienced at the local level, especially before 2006, can be tied to differences in local demand and supply conditions that systematically and predictably cause monetary policy to different local consequences.

‘Why did we see so very different house price inflation rates across MSAs when all MSAs are subject to the same federal funds rate in a highly integrated financial market?2 The key point of this study is to show empirically that the vast differences in home price inflation rates experienced at the MSA level, especially prior to 2006, can be tied to differences in local demand and supply conditions that systematically and predictably cause monetary policy to have rather different consequences at the local level.3

Local population growth is a key demand side factor and the percentage of undevelopable land a primary supply side factor that determine how national monetary policy impacts house price inflation rates at the MSA level. the study found. MSAs with a high share of undevelopable land or strong population growth are far more prone to experience house price inflation from a reduction in the federal funds rate than MSAs without those characteristics.

A higher quality of life, by contrast, appears to moderate the impact of a change in the federal funds rate on house price inflation. For the larger set of MSAs contained in the FHFA data set, there is evidence that large values for land use restrictions and high income growth during the period before the house price crash in 2007-8 are also important to explain a strong response of MSAs to changes in monetary policy.


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Mortgage rates average 3.62% | Armonk Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates resuming their decline and aiding home buyer affordability amid a tight supply of for-sale homes in many markets.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.62 percent with an average 0.6 point for the week ending February 25, 2016, down from last week when it averaged 3.65 percent. A year ago at this time, the 30-year FRM averaged 3.80 percent.
  • 15-year FRM this week averaged 2.93 percent with an average 0.5 point, down from last week when it averaged 2.95%. A year ago at this time, the 15-year FRM averaged 3.07 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent this week with an average 0.5 point, down from last week when it averaged 2.85 percent. A year ago, the 5-year ARM averaged 2.99 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 theDefinitions. Borrowers may still pay closing costs which are not included in the survey.

Attributed to Sean Becketti, chief economist, Freddie Mac.

“Yields on the 10-year Treasury continued their downward trend this week after a small rally the previous two weeks. The 30-year mortgage responded, falling 3 basis points to 3.62 percent. Since the beginning of 2016, 30-year rates have fallen almost 40 basis points helping housing markets sustain their momentum into this year. Earlier this week, the National Association of Realtors announced existing home-sales were up 4 percent month-over-month in January and up 11 percent from last year.”