While the year unfolds and we watch as a number of potential economic policies from a new administration are signed into order, more insight into 2017’s housing market begins to unfold. Last month we talked about housing appreciation and interest rates. Now, experts are weighing on new trends for the new year.
Redfin is expecting 2017 to break the 2016 record as the fastest market on record, measured by the average number of days homes spend on the market before going under contract. In 2016 the typical house stayed on the market for just 52 days, about a week faster than in 2015 and the fastest year since Redfin began tracking in 2009. Redfin is also predicting 2017 to be even faster— data taken from demand for short-notice tours of homes for sale, including same day tours, and the number of home tours completed, which has grown 19 percent. Redfin also recognizes a new approach for many buyers, one that seeks an efficient transaction.
In 2016, Millennials showed no signs of their ability to influence the housing market. Now in the new year, experts are predicting that millennials and boomers will greatly move markets, the two largest American generations in history. Chief Economist Jonathan Smoke cited on realtor.com predicts that millennials alone will make up 33% of buyers in 2017 as they approach life stages that typically motivate people to buy homes: marriage, children, job security.
Fannie Mae and Freddie Mac have begun to back bigger mortgages for the first time since 2006, a major sign of recovery from the past housing crisis. This will make it easier for more homebuyers to qualify for a mortgage in higher-priced markets. While the new administration has alluded to many changes in the structure of Fannie and Freddie, we don’t imagine that happening until 2018, as Redfin reminds us of a lengthy and political process to repeal that charter. We also expect increases in the availability of low downpayment mortgages from big lenders. These larger institutions introduced mortgages requiring as little as 1-3% down, drawing more millennial buyers into the housing market.
All signs point a great 2017 for the housing market, with much buyer demand and new inventory.
We’ve been looking at solar energy a lot these days, particularly roofs, and have even written about them before here on our blog. We look at solar panels as an investment on your home that will give you plenty of savings in the future and add value to your property. The biggest barrier to getting a solar roof is the cost of the equipment, in comparison to the benefits, so when Tesla announced a new solar roof that would cost less than a normal roof, we were floored.
The roof looks good, there’s no doubt about that. There are multiple finish options, including “Tuscan” and “slate”, which allows for a solar panel roof that actually looks like a normal roof. But aside from aesthetics, most of us are wondering if a Tesla Solar Roof is worth it. Namely, we’re more concerned about the return.
The cost of the roofs is estimated around $50,000, so when Tesla says it’s price point is around that of a “normal roof”, they mean a roof with high end materials. At this rate, it’s more a competitive alternative to other luxury solar installations, but with more of an unknown return.
Performance and efficiency are everything when it comes to solar equipment. The company itself has admitted that the aesthetic reduces efficiency by 2%, which is a lot. Tesla’s panels are actually roofs, or “roof integrated”, unlike other panels that are mounted to the roof. This design doesn’t allow for airflow between the panels and the roof and thus reduces energy and efficiency. Also, because of the design, you wont be able to install around shaded areas, which will lower your production output. There’s even a lot of talk about fire hazards because of the roof integrated design.
We certainly admire the look of Tesla’s new solar system, and are excited to see these concerns addressed over the years, as we know they will be. If you’re thinking of adding solar energy to your home, let us know, we’d be happy to share our experiences with you.
Earlier this week, Airbnb, an online homestay network that allows people to list or rent short-term lodging in residential propreties, announced it’s recent expansion to experiences, not just accommodation. The website now gives hosts the chance to offer tours, so people can buy packages such as a guided tour or cultural experience. While the debate over short-term rentals is raging in all of America’s, we wonder about the opportunities for landlords and property owners, as well as the drawbacks to neighbors.
The cost of an Airbnb varies—by location, demand, time of year, size—but is always set by the property owner. A property owner can rent out a room, a sofa, a bed or an entire home. There are more than 2,00,0000 listings in 34,000 cities and 191 countries, and growing.
Property owners see the appeal in short-term rentals. The owner of an apartment can rent out that unit for $2,000 per month, or rent it on Airbnb for $150 per night. Some owners own and rent multiple properties through Airbnb and make upwards of six figures per year. At 90% occupancy, a homeowner can make about $4,000 per apartment on Airbnb. If such owner pays about $2,000 of that in rent and utilities, that comes out to $2,000 profit per month, per apartment, or $24,000 per year, multiplied by ‘x’ number of apartments.
The legalities of short-term rentals through Airbnb are still being processed and sorted, namely when it comes to rights. Entrepreneurial landlords have the right to make a buck, while neighbors have the right to maintain the atmosphere of their locale. Some apartment buildings prohibit brief sublets by tenants who might want to earn extra money while they’re away—a landlords right to prohibit that. There are also controversial issues arising over taxes—full time rentals acting as hotels but not paying hotel-like taxes.
In vacation spots like San Clemente, Dana Point and South Orange County as a whole, Airbnb listings are rampant. The opportunities for property owners, or would-be property owners, are huge. If you’re thinking of purchasing an investment property with short-term rentals in mind, check with your GreenTree real estate agent to see which areas allow, or don’t allow them.
When the market is strong, as it is now rolling into 2017, basic principles of supply and demand start to surface and weigh in the real estate market. With current demands, inventory has been historically low during the previous year, which is why new developments offer homebuyers new opportunities to own property in desirable areas.
Over the years, we’ve worked with homebuyers in their search for newly constructed homes. One of the drawbacks we often encounter is the proximity to basic amenities—Target, Costco, Sports Parks, etc. The new Avenida La Pata Extension in San Clemente is changing the game, and the opening of the much anticipated Rancho Mission Viejo development is alleviating buyer demand.
Rancho Mission Viejo is a new master-planned community in South Orange County. Located just 2.5 miles from downtown San Juan Capistrano and 5 miles from coastal attractions of San Clemente and Dana Point Harbor, RSV is a collection of 12 neighborhoods, including inter-generational housing, ranging from the $300s to the 1.0Ms.
We recently spent a few days at the developments at Rancho Mission Viejo and the best part is also what sets it apart from other developments—the amenities. RMV’s Ranch has “plenty of places to exercise, retreats to relax, trails to explore and more.” The Esecnia Farm features crops, planter beds, orchards and even a chicken coop. Canyon Coffee at The Canyon House is the neighborhoods very own coffee shop, brewing Peet’s Coffee and catering kitchen with a large activity lawn. There are even plans for a daycare center, with infant and toddler supervision planned down the street from the Esencia K-8 grade school.
Strong market conditions, new road extensions and price points to fit every new buyer, Rancho Mission Viejo is a favorable option for those of us in the market. For more details, or to learn more about buying a newly constructed home, ask your GreenTree real estate agent.
A lot of our clients ask about buying a newly constructed home. They often weight the pros and cons of buying new vs. buying old, and we’re happy to be able to steer them along that road.
But many ask, if I buy new construction, am I still able to work with a realtor?
They answer is, yes. In fact, you should be working with a realtor that does not have relationships or ties to the builder. This will allow the realtor to have your best interest in mind, and protect that interest.
Model homes are typically staffed by a real estate agent, employed by the builder and tasked with a specific goal. These reps represent the builder, as they are contractually obligated to do so. It’s important to have an agent to represent you that can advise you on how to structure your offer and in making choices that can affect your home’s resale value.
If you’re thinking of touring a new construction, don’t walk into the sales office without your agent. Some developments have site registration policies that require your agent to accompany you on your first site visit. If you walk in without them, you won’t be able to have the support of your agent during the transaction.
Your real estate agent is going be trained in negotiations, and can help with negotiations for possible upgrades or credits towards:
– flooring, stone materials and finishes
– contract terms
– warranty packages
– closing costs from the in-house lender
Buying new construction is a complex process with many moving parts. An experienced agent will also have the know-how to keep the transaction and construction on track. Depending on factors such as size, weather and the builder itself, your agent is going to be there along the way to let you know what to expect and how to navigate the process.
Talk with your real estate agent before visiting a new construction site and make sure you get the representation you need for the process.
Whether you’ve just moved in or you’ve been settled for a while, consider these GT Tips before you’re next hard surface flooring installation.
- Decide whether you’re keeping the baseboards or getting new baseboards. Most flooring types require a small gap between the wall’s edge and the flooring’s edge, as with hardwood, to allow for movement. If you’re keeping your existing baseboard, you may need a quarter round to cover this gap.
2. Is it level? The foundation, that is. What you can’t see may hurt you. Any major divots in the flooring may compromise the floor’s integrity, especially tile. Uneven flooring could lead to cracks and breaks that cost money to repair. If you’re demo’ing old floors, allow for time in between the demolition of the old floor and installation of the new in case repairs need to be made to make the floor even.
3. Are you installing on a second story? Many bathrooms using tile are going to be located upstairs, which means you’re going to need a waterproof subfloor when it’s installed on say, plywood. When wood gets wet, it swells and could likely break or crack your tile. A cement board will help ensure that this doesn’t happen, just be sure to think about this material when budgeting your project.
4. Consider the pattern. If you’re installing hardwood floors, or plank style tile, you’ll typically want the pattern to run the length of the house, to make hallways and other longer rooms look larger. More complex patterns, such as herringbone, may require more material to allot for more complex cutting.
5. Know your grout. There are two types of grout, non-sanded and sanded. Typically, sanded grout is using for flooring, while non-sanded grout (grout without sand) is used for walls.
6. Seal it. Natural stones such as slate and granite are going to require a sealant every six months. Without it, a white film could develop over the tile and diminish the sheen.