Sunrise Homes & Renovations, Inc.

What’s Ahead For Mortgage Rates This Week – July 22nd, 2019

by

What’s Ahead For Mortgage Rates This Week – July 22nd, 2019Last week’s economic reporting included readings from the National Association of Home Builders Housing Market Index, Commerce Department reports on housing starts and building permits issued.

The University of Michigan consumer sentiment index was also released. Weekly readings on mortgage rates and new jobless claims were also reported.

NAHB: Builder Confidence Rises as Housing Starts Slip

Home builder confidence in current market conditions rose one point to an index reading of 65 in June. Any reading over 50 means that most builders view housing markets conditions as positive, but July’s reading was lower year-over-year.

Builders have long cited a shortage of buildable lots and labor, but also face new obstacles including strict local zoning laws and overall regulation. High demand for affordable homes coupled with short supplies of homes in this market range provided challenges to home builders, communities and would-be home buyers.

Housing starts fell in June to 1.125 million on a seasonally-adjusted annual basis. Analysts predicted 1.244 million starts based on May’s reading of 1.265 million starts. The housing market index used to foreshadow the number of housing starts, but the two readings are no longer as closely connected.

The Commerce Department reported 1.220 million building permits issued in June as compared to 1.299 million permits issued in May.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week after three weeks of minor movement. Rates for 30-year fixed rate mortgages averaged six basis points higher at 3.81 percent. The average rate for 15-year fixed rate mortgages rose one basis point to 3.23 percent.

5/1 adjustable rate mortgage rates averaged two basis points higher at 3.48 percent. Discount points averaged 0.60 percent for 30-year fixed rate mortgages and 0.50 percent for 15-year fixed rate mortgages. Discount points for 5/1 adjustable averaged 0.40 percent.

New jobless claims rose to 216,000 new claims filed as compared to 208,000 new claims filed the prior week. Analysts predicted 220,000 first-time claims would be filed. The University of Michigan’s Consumer Sentiment Index rose in July to 98.40 percent as compared to June’s reading of 98.20. Analysts expected a reading of 99.00.

What‘s Ahead

This week’s scheduled economic news includes readings on sales of new and previously-owned homes along with weekly reports on mortgage rates and new jobless claims.

Pros And Cons Of Installing A Pet Door

by

Pros And Cons Of Installing A Pet DoorIf you’ve just moved into your new home and you have a pet, you may be thinking of installing a pet door. A pet door is a permanent door feature that is cut into the bottom third of an entry door. Before making a permanent alteration to your door, consider the pros and cons of installing a pet door. 

Pro: Your Pet Can Come And Go As Needed

A pet door could cut down on indoor pet accidents if that’s a problem you’ve had to deal with in the past. This is especially convenient if you get home late to let the dog out, or if they have a temporary gastric illness that requires more frequent outings. 

Con: An Unwanted Visitor Could Get Inside

Pet doors are designed to give egress to pets, but your pet door might give indoor access to an unwanted animal. It’s not common, but it does occur, particularly in areas where wildlife is abundant.

Pro: You Could Do Without A Litter Box

Cats can be trained to go outdoors instead of using a litter box. With a pet door, you can dispense with the odorous litter box entirely, knowing your cat will always be able to take care of business outside.

Con: It’s Something Else You Must Remember To Lock

Most pet doors have a locking mechanism for times when you need to secure the home, such as at night. But this is just one more thing you’ll have to remember to do, along with setting the alarm and locking windows. And, the more you have to remember, the more you could forget.

Pro: Better Energy Efficiency

Anyone with pets knows that they can ask to go out and come back in numerous times per day. Every time you open the door you’re letting hot air in, cooled air out, or vice versa. With a pet door, your conditioned air stays in the home much better because there’s a smaller opening, and less time spent with the door open.

Con: New Homebuyers Might Not Want It

If you ever sell your home, the new homebuyers might see a pet door as a negative. Since a quality new door costs around $500, they could ask for a price discount on the home purchase.

A pet door can be a huge convenience, but there are some drawbacks as you can see. However, depending on your view (and the opinion of your pet!) the pros may outweigh the cons.

If you are interested in buying a new home or listing your current property, be sure to contact your trusted real estate professional.

 

The Monopoly Technique – How To Build Value By Acquiring Adjacent Properties

by

The Monopoly Technique - How To Build Value By Acquiring Adjacent PropertiesHave you ever played the classic board game called Monopoly? The object of the game is to collect all the properties until one winner bankrupts all the other players. The other part of the game is that accumulating properties adjacent to each other increases the value of the individual properties. When a player acquires all the properties of the same color (two or three), then the rents go up and property development can begin.

The Monopoly Game In Real Life

The same basic principles sometimes work in real life. Owning a property and then buying the one next door creates a value-added possibility of the combined properties being worth more than the individual pieces.

To start this strategy, tell the neighbors of having an interest in buying their home in the future if they want to sell. This is a way to get the first option to buy a home before it lists on the market.

Control Of The Neighbors Adds Value

In many neighborhoods, there is one home that creates severe negative pressure on property values. These homes may be neglected and badly needing a paint job and landscaping. The home may be a source of neighborhood noise problems or heavy traffic.

When considering buying into this neighborhood, make a plan to buy the derelict house. Then, before bringing it back into a marketable condition, there may be a chance to buy the ones next door for a steep discount from the market value.

If possible, buy all the properties at once and close them around the same time. This helps avoid triggering a profit demand from those who are opportunistic and learn about the interest of a buyer in more than one property.

Cashing Out

If possible, buy three houses, one of each side of the derelict house, then renovate all three properties. Make them into rental units or to sell them as a “flipped” property after the renovation for a big profit.

If there is the possibility of controlling a full block on both sides in a rundown neighborhood, it is possible to start with one block of home improvements at a time. Entire neighborhoods may improve one block at a time.

Redevelopment

In some neighborhoods, there is a chance of re-zoning and redevelopment. For example, it may be possible to build a larger structure by combining two properties. There is profit possible in assembling the land for redevelopment purposes, even for those who do not do the construction for the redevelopment.

Summary

Playing Monopoly in real life can make investing in real estate fun. It is possible to start with a few low-cost rental homes. For rental properties, it makes it much easier to manage them if they are next to each other. Values may increase in the neighborhood by the renovation of a derelict house.

If you are intested in listing your current property or in the market for a new home, be sure to contact your trusted real estate professional!

NAHB: Housing Market Index Rises 1 Point in July

by

NAHB Housing Market Index Rises 1 Point in JulyHome Builder sentiment rose one point in July according to the National Association of Home Builders Housing Market Index. 2019 builder confidence in housing market condition continued to fall short of 2018 levels. July’s Housing Market Index reading of 65 was one point higher than June’s reading.

Component readings also rose one point each. Builder confidence in current housing market conditions rose to 72; the reading for builder confidence in market conditions for the next six months rose to 71. Builder confidence in buyer traffic in new housing developments rose to an index reading of 48; buyer traffic readings seldom exceed the neutral reading of reading of 50.

2019 Builder Confidence Is Lagging Behind 2018 Readings

Year to date, builder confidence index readings averaged 63 as compared to a reading of 67 in 2018 and 68 in 2017. Ongoing headwinds affecting builders were familiar concerns over materials prices and shortages of buildable lots and labor. Analysts said that builders remain leery of building to many homes after having large inventories of unsold homes after the Great Recession.

Builders also noted that increasing regulation and local building codes are impacting some areas. Builders are under pressure to produce affordable homes, but are log-jammed by “not in my backyard” zoning restrictions when they apply to build mixed developments of single and multi-family homes.

There may be good news on the horizon. Oregon passed state legislation banning exclusively single-family zoning. Depending on population, local jurisdictions will be allowed to build duplexes and larger multi-family units. If other states and communities follow Oregon’s lead, builders may find new options for building multiple units on lots formerly zoned for single family homes. Building affordable homes would help to ease housing shortages and ease demand for homes.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted home mortgage and real estate professionals. 

New York Penthouse Sells For $238 Million – Is This A Real Estate Bubble About To Burst?

by

New York Penthouse Sells For $238 Million - Is This A Real Estate Bubble About To BurstThe most expensive home sold in America, so far, was a New York penthouse that sold for $238 million in January 2019. It is on the top of a building that overlooks Central Park. The 26-story luxury condo building designed by Robert A. M Stern is nearly all sold out.

Who Has That Kind Of Money?

The proud buyer of the penthouse is Ken Griffin. His net worth is estimated to be $9.6 billion. He is the founder of the Citadel hedge fund. Griffin is 50 years old. A few days before buying the NYC penthouse, he closed on a home in London that overlooks St. James Park near Buckingham Palace. For that 200-year-old home, he paid just a paltry $122 million.

Griffin’s New York penthouse is 22,000 square feet of ultra-luxury living. It sold for more than twice the amount of the second palace record-holder in America. That is a penthouse on the One57 building, which sold for $100.5 million in 2014.

Boom Or Bust?

One might think that a penthouse sale setting a new almost unfathomable record would indicate a vibrant bullish market in New York residential real estate. Well, not exactly. It did raise the median sales price of a residential sale in New York City to over $1 million from being below this amount at the end of 2018. Prior to this sale, the median price was trending lower.

Forbes reports that the current economic trends are not normal. Usually, the NYC real estate market goes up when the stock market is up. However, the NYC residential real estate is down in spite of the robust economy.

Properties selling for top-dollar at prices that are hard to imagine could be a sign of a real estate market collapse. In general, the NYC residential market has been in a steady decline over the past year. The lowest number of closings in a decade happened during the first quarter of 2019.

Investor Uncertainty

There is a general sense of uncertainty for residential buyers in NYC, where the average one-bedroom condominium sells for over $1 million. Uncertainty makes potential buyers take longer to decide on making a home purchase in the Big Apple.

Add to this uncertainty, there is the new “mansion tax” that was approved by New York City as part of its budget in April 2019. The mansion tax is now 1% on residential sales of $1 million or more that goes up to a maximum of 4.15% on homes sales of $25 million and up.

Did you just do the math? Griffin would have paid $9.87 million for the new mansion tax if he waited until April 2019 to buy his penthouse. So maybe he feels like he got a bargain by saving nearly $10 million on the purchase?

Summary

In spite of the record price for the penthouse sale in NYC, the residential market continues to soften. The new mansion tax is not going to help sales either. Unless you have money to burn, as Griffin does, it may not be the best time to invest in residential properties in NYC if you hope to make a return on your investment when selling them.

Your trusted real estate agent is well-informed about the market trends in your area. Be sure to set up an appointment if you are in the market for a new property.

What’s Ahead For Mortgage Rates This Week – July 15th, 2019

by

What’s Ahead For Mortgage Rates This Week – July 15th, 2019Last week’s economic releases included reports on inflation, core inflation and minutes from the Federal Open Market Committee Meeting held June 18 and 19. Weekly readings on mortgage rates and first-time jobless claims were also released.

Inflation Rate Rises, but Grows at Lowest Pace in Four Months

June’s Consumer Price Index reported the lowest rate of inflation in four months with a year-over-year rate of 1.60 percent growth as compared to May’s year-over-year inflation rate of 1.80 percent. Fuel prices were lower, which helped balance rising costs of rent, clothing and autos. Analysts said that falling inflation rates would be a primary reason why the Fed is likely to cut its key interest rate range later this month.

Core inflation, which excludes volatile food and energy sectors, rose 0.30 percent in June and surpassed expectations of 0.20 percent growth and May’s 0.10 percent growth rate.

Federal Reserve policymakers base their decisions  on the Fed’s dual mandate of maintaining maximum employment and economic growth, which is benchmarked at 2.00 percent annual inflation. FOMC members repeatedly state their commitment to reviewing domestic and global economic news and willingness to adjust Fed policy according to changing economic conditions and current events.

Mortgage Rates, New Jobless Claims

Freddie Mac  reported little change in average mortgage rates last week; Rates for 30-year fixed rate mortgages were unchanged at 3.75 percent; rates for 15-year fixed rate mortgages rose four basis points on average to 3.22 percent. The average rate for 5/1 adjustable mortgages rose one basis point to 3.40 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell by 13,000 claims to 209,000 claims filed and was lower than the expected reading of 221,000 new claims filed.  The July 4 holiday likely impacted the number of initial claims filed.

What‘s Next

This week’s scheduled economic news includes the National Association of Home Builders Housing Market Index, Commerce Department readings on housing starts and building permits issued and a report on consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.