Homeownership: The Next Generation Wants to Have it Their Way

According to a recent national survey of 18-35 year olds, the next generation of homeowners, "millennials," know what they want when it comes to a new home.

Results indicate that the next generation of homeowners seeks essential, purposeful homes (77 percent) equipped with the technological capabilities they have grown accustomed to, as opposed to stereotypical luxury homes preferred by many in their parents’ generation.

Some of the findings from this survey showed that the up-and-coming generation of buyers is willing to put a some elbow grease into creating a home that meets their needs, so a fixer-upper could be just what they are looking for. 

They aren't necessarily interested in a huge "mcmansion" and are redefining traditional floor plans and re-purposing rooms to meet their lifestyle.

High on these homebuyers' "must-have" list is the homes IQ. Smart homes will generate interest -- more than half (56 percent) of millennials believe home technology capabilities are more important than “curb appeal. If a home is not up-to-date with the latest tech capabilities, 64 percent of millennials surveyed would simply not consider living there.

(Source: BHG® Homeowner Survey, 2012)

 

Carmel Residential Real Estate Market - One to Watch in 2013

In the Winter 2013 issue of Unique Homes, writer Camilla McLaughlin lists the top 12 markets to watch this year, and happily, Carmel, California makes that list.

With Silicon Valley and San Francisco both showing signs of a rebounding market, the higher end homes on the Peninsula are slowly beginning to see a similar effect, driven in part by a spike in interest from out of state and foreign buyers.

Two other California cities made the list, Newport Beach and San Francisco.

In fact, according to McLaughlin, some experts consider the Bay Area market to be the best in the country, with all indicators -- price, sales, number of jumbo loans and new construction -- on the rise.

And that's a trend we definitely want to see continue!

The New Normal: After A Rollercoaster Ride, U.S. Home Prices are Finally Getting Back to Normal

Earlier this week, CNNMoney reported that Fiserv Case-Shiller is predicting a change for the better in home prices. And it's a change that would see the average home's sale price increase by 3.3% annually by 2017. 

The much discussed and still oft-debated stabilization of the real estate market appears to have staying power. Based on the results of year-end statistics for 2012, 62% of the metro areas surveyed reported rising home prices, including areas like Phoenix, which were hardest hit when the housing bubble burst.

While there are still foreclosures in the mix, that number is down as well. The survey also cited other positive trends including increased home affordability and low mortgage rates.  

If these trends continue, the housing sector should continue to grow stronger and at a healthy pace, which would have a positive effect on the nation's economy.

No Fiscal Fall: Real Estate Tax Laws in 2013

Now that the dust has settled over that fiscal cliff, it's time to look at the fallout. How has real estate been affected by H.R. 8 legislation (American Tax Payer Relief Act) signed into law by President Obama on January 2, and what will it mean for homeowners, buyers and sellers?

Great News for Short Sales
Short sales will continue to qualify for mortgage cancellation relief through 2013. This allows homeowners a tax break for the difference of the sale price and the amount still owed on the mortgage, an amount that is forgiven by the bank in the bargain.

Mixed News for Mortgage Insurance Premiums
If homeowners have mortgage insurance, the premiums are tax deductible for those making less than $110,000. This is not only extended throughout 2013, it was made retroactive for 2012.

Energy Credits Extended
Certain energy improvements made in 2012 or planned for 2013 will qualify for up to a $500 tax credit. These are for existing homes and must be for the homeowner's primary residence. Homeowners who have previously claimed $500 in energy tax credits are not eligible. Energy efficient improvements include qualifying windows, exterior doors, skylights, insulation, roofing, and heating and cooling systems.

Estate Tax Exemptions
Individual and family estates now qualify for exemptions as well: the first $5 million for individual and the first $10 million for family. (These amounts will be indexed for inflation.) Estates above those amounts will be taxed at 40%, a 5% increase.

Capital Gains Remains
For those making less than $400,000 ($450,000 married filing jointly), the tax rate for capital gains remains at 15%. However, the tax rate on capital gains for those making more than $400/450K will be 20%.

While not everyone will be happy with the final legislation, and no income tax bracket is better off, many homeowners are relieved over what could have been a huge tax burden.

Highlights as of December 2012 around the country:

• Including distressed sales, the five states with the highest home price appreciation were: Arizona (+20.2 percent), Nevada (+15.3 percent), Idaho (+14.6 percent), California (+12.6 percent) and Hawaii (+12.5 percent). 

• Including distressed sales, this month only four states posted home price depreciation: Delaware (-3.4 percent), Illinois (-2.7 percent), New Jersey (-0.9 percent) and Pennsylvania (-0.5 percent). 

• Excluding distressed sales, the five states with the highest home price appreciation were: Arizona (+16.4 percent), Nevada (+14.7 percent), California (+12.8 percent), Hawaii (+11.7 percent) and North Dakota (+10.8 percent). 

• Excluding distressed sales, this month only three states posted home price depreciation: Delaware (-1.9 percent), Alabama (-1.0 percent) and New Jersey (-0.5 percent). 

• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2012) was -26.9 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.8 percent. 

• The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-52.4 percent), Florida (-43.5 percent), Arizona (-39.8 percent), Michigan (-36.5 percent) and California (-35.4 percent).

While reviewing Sotheby’s new listings to present today, we had 10 new listings this week and 9 are already in contract ranging from $2MM to $179K.  So, has there been a shift in the market?  It seems so.

© Patty Ross, KRXA Radio show #241 March 1, 2013

To listen to my radio show on this topic, click here.