October Job Gains Pushing Housing Toward Recovery

Author: Brian Honea November 7, 2014 Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services2

The labor market is helping to boost housing recovery despite a weak virtuous cycle between the jobs and housing recently, according to research released by Trulia earlier this week.

The percentage of employed 25- to 34-year-olds reported in October (76.2 percent) is still slightly below its pre-housing bubble rate (78 to 80 percent) but is still at its highest level since 2008, which bodes well for the housing market, since 25 to 34 is the prime age for household formation, according to Trulia. Having a job made a big difference in housing among that age group, according to 2014 Census data – only 12 percent of 25- to -34-year-olds with jobs lived with their parents, as opposed to 21 percent of those in that age group who don't have jobs. The Bureau of Labor Statistics recently announced that the overall U.S. unemployment rate hit a new six-year low in October.

Another key to housing recovery is job growth in "clobbered metros" (areas affected the most by the housing bust), according to Trulia. Job growth was reported a 2.0 percent year-over-year increase in September, which was slightly ahead of the national rate of 1.9 percent for that same period. The clobbered metros with the highest rate of job growth year-over-year in September were Orlando (3.7 percent), Miami (3.4 percent), Jacksonville (3.3 percent), and Las Vegas (2.8 percent). The highest rate of job growth among the top 100 metro areas (clobbered or no) was in Houston, at 4.3 percent. The lowest rate was in Columbus, Ohio, at 0.7 percent, according to Trulia.

Residential construction employment, which is an indicator of whether or not jobs are helping the housing market, saw their lowest monthly gain in October (8,000 jobs) since May 2014, according to Trulia. Year-over-year in October, however, residential construction job growth (6.0 percent) was way ahead of the overall national job growth rate for that period (1.9 percent). This may seem like a slow growth rate when compared to the 19.5 percent increase in the number of units under construction that was reported for September, but upon further examination, the rate of growth for employment in residential construction is high relative to construction activity, Trulia reported.

Why November is the Best Month to Sell Your Home

A house marketed in November may lure buyers looking for year-end tax breaks.

Some owners hesitate to market their homes between Halloween and New Year’s Day, believing the holiday season to be an off-peak time to sell. But the idea that houses don’t sell in November and December comes from outdated historical trends.

In fact, several studies show that, on average, homes listed during this time are more likely to sell, sell more quickly, and sell closer to the asking price. November, in particular, has some unique advantages that make it an ideal time to sell. Here are three reasons why Thanksgiving month might be the best time to sell your home.

More motivation

The idea that homes sell best in spring and summer stems from the fact that parents want to wait until summer to move school-aged children. But today, more than half of buyers aren’t married, so their decisions aren’t necessarily based on kids’ schedules.

If buyers are looking for a home in November, they’ve either waited through the busy season in hopes of a better deal, or they’re facing their own time constraints due to work changes or other reasons. For these highly motivated buyers, the traditional barriers to winter house-hunting — bad weather, short days, holiday preparations — don’t apply. If your house is available for them to view in November, these buyers are more likely to make an offer close to listing price.

Less competition

Because of the misconceptions about selling during winter, it’s true that many sellers don’t think it’s worth their time to try and sell their homes toward the end of the year, so they take their homes off the market. Their loss of a potential buyer is your gain!

Serious buyers have fewer homes to choose from over the holidays. That means less competition for you — and more buyers checking out your even more desirable home, either online or in person.

Tax benefits

A house marketed in November may lure buyers looking for year-end tax breaks. Buyers looking to lower their taxes may snatch up a home late in the year so they can deduct home purchase costs. That includes points, interest and property taxes.

And if someone sold a house during the traditional summer selling season and faces capital gains tax on the deal (because he’s an investor or lived in the house for fewer than two years), he may be highly motivated to buy in November since closing on the purchase of another house within 180 days lets him avoid paying capital gains tax.

Why Insulate A Home

You just spent an arm and a leg to install or repair your HVAC system. Now, you must make sure that it’s experiencing the least possible resistance. That is why proper insulation throughout the house is needed. Otherwise, warm air could escape your home, forcing your HVAC system to work that much harder. As you can imagine, that will always translate into higher energy bills.

Furthermore, poor insulation can also lead to an unhealthy family. Given our most recent winter, it doesn’t look like Mother Nature is easing up anytime soon and even the best HVAC systems can fail when faced with poor insulation. Therefore, improper insulation may not only hurt you wallet, but your family’s health as well.

Where to Insulate

In short, you should insulate any part of the home that is connected to the outside. Some of the following paths are well known, but there a few uncommon paths the average homeowner should consider:

• Attic
• Roof
• Windows
• Walls
• Ducts
• Doors
• Floors
• Ceilings

For tips on two of the most common insulation jobs, check out our attic insulation project guide and our Roof Installation Tips.

Home Insulation Types

There are a several types of insulation and each one has its own set of advantages and disadvantages.

• Fiberglass Insulation: The most common type of insulation is fiberglass, which can be purchased as batts or loose fill. Batts are generally easier to install since they are blankets of insulation that have been woven together and include a paper or foil moisture barrier. Although fiberglass is relatively inexpensive, it also provides desirable features like resistance to water damage and fire.
• Mineral Wool Insulation: Mineral wool is similar in structure to fiberglass, but it’s more expensive and not as easy to find. In terms of physical appearance, mineral wool can be compared to dusty dryer lint. A disadvantage to using mineral wool is that it settles over time and cakes when wet, which results in less effectiveness for insulation.
• Cellulose Insulation: Cellulose insulation is made from recycled paper. It’s available as a loose fill product and has been treated to resist damage from pests and moisture. However, when moisture absorption occurs, like mineral wool, cellulose becomes compacted, heavy and less effective.
• Spray Foam Caution: Touted as a green insulation product, spray foam is a polyurethane product that involves mixing two chemicals that are applied with a hose. While most spray foam can be installed without incident, serious problems, including unpleasant odors, difficulty breathing and health problems can affect homeowners if the job is done incorrectly.

Home Insulation Costs

Before we jump into the costs, it’s important to remember that having a home that is well insulated can translate to tremendous savings on monthly energy bills. The overall costs will vary based on the material and method of insulation used. While many homeowners install their own insulation, it can be helpful to work with a professional who can carefully calculate the needs of the spaces in question. This is especially important if your insulation is subject to local building codes.

After analyzing over 7,500 home insulation projects, we found that theaverage cost to install home insulation is $1,289.

Your costs will be more extensive if you’re removing old material. In older homes, materials may degrade due to a lack of standards at the time of installation. Cellulose, for example, became very popular in the late 1970s as homeowners took steps to improve household energy costs in the face of the oil embargo. This led to the development of standards for issues like fire resistance and R-values.

Save Money on Home Insulation Installation

Like most projects, homeowners can save a buck or two if they decide to install their insulation themselves. Home insulation is a very doable DIY project, but hiring a contractor does have its benefits.

A professional contractor could save you time and materials. Precise calculations of how much material is needed will produce better energy usage, leading to lower energy costs. Additionally, your insulation professional will leave space around fixtures that could create fire dangers as well.

Conclusion

It’s estimated that anywhere between 50% and 70% of the average American home's energy is used for heating and cooling. That means that up to 70% of your energy bills is tied to your HVAC system and home insulation. If you want to save money on your energy bills, don’t forget about the latter and make sure you have the best home insulation available.

Housing Recovery Moving Slowly Despite Moderate Gains in Sales

Author: Brian Honea November 6, 2014 Share on facebookShare on twitteremailShare on pinterest_shareMore Sharing Services

While home sales prices posted moderate gains in September, the housing market recovery as a whole is moving slowly, according to the Wells Fargo Economics Group Housing Wrap Up for October 2014.

New home sales increased by only 0.2 percent month-over-month in September after shooting up by more than 15 percent in August. And while new home sales have increased by 22.6 percent since September last year, that percentage is perhaps more a reflection on the exceptionally weak sales numbers posted in September 2013, according to Wells Fargo. Existing home sales climbed by 2.4 percent from August to September, the highest percentage in 11 months. Year-over-year, existing home sales were 1.9 percent higher in September.

The median price of new homes dropped sharply in September, according to Wells Fargo, declining by 9.7 percent month-over-month and 4.0 percent year-over-year, indicating that more discounts are being offered by builders to move inventory. September declines in the median and average sales prices for existing homes were reported by the National Association of Realtors, indicating that more sellers are offering homes at a discount.

Homeownership rates tumbled to 64.4 percent in Q3, hitting their lowest point since 1995, according to Wells Fargo. The report attributes the low homeownership rate to a decline in market discipline that was a longtime hallmark of the housing industry – first-time homebuyers made sacrifices to save for a down payment and therefore had a greater stake in home buying. The market shifted and disciple relaxed, resulting in the sales of many homes with little or no down payment, which resulted in poor outcomes for buyers who purchased a home without consider factors such as builders, neighborhoods, or school districts. The report said that many would-be buyers "now remain chagrined to the point that they are unlikely to buy a home anytime soon."

Among individuals under age 35, homeownership rates stood at just 36 percent in Q3, down 7.6 percentage points since peaking 10 years ago. But While many point to the low homeownership rates among millennials as the reason for slow housing recovery, Wells Fargo does not believe the younger generation is completely to blame.

"We believe the missing link in the housing recovery is the lack of strong job growth," the report said. "While overall employment has surpassed its pre-recession level, much of the rebound in employment has been in part-time jobs."

Wells Fargo found in the report that there are 1.1 million more people working in the U.S. than there were prior to the recession, but the gains have come strictly in part-time jobs, where 3.7 million more people are working. The report said there were actually 2.6 million fewer people working in full-time jobs than prior to the recession, and "the 2.6 million worker gap from pre-recession employment levels likely explains a great deal of the slow motion recovery in the housing market" since people working full-time are more likely to buy a house than those working part-time.

Analysts Predict Uptick in Home Sales Using New Technology

Author: Tory Barringer October 31, 2014 Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services42

A new estimator of existing-home sales landed on Thursday, and it's calling for a slight pickup in transactions for October.

With help from Internet giant Google, Auction.comannounced the launch of "Nowcast," a new housing report designed to combine industry data, proprietary company transaction data, and Google Trends findings to predict market trends as they're happening. The result is a statistical report released monthly, weeks before other closely watched real estate data—such as the National Association of Realtors' existing-home sales survey—comes out.

The report is based on data modeling developed by Google's chief economist, Hal Varian, who described Nowcasting as "contemporaneous forecasting."

"Google Trends data—which is anonymized, publicly available search information—offers valuable insights into current economic and consumer trends," Varian said. "By layering industry-specific transactional data and subject matter expertise over that search data, organizations such as Auction.com are able to create powerful predictive models for accurately forecasting buying behavior in the present and for the coming months."

According to Auction.com, internal testing conducted for the months of April–September showed "considerable accuracy" in predicting market performance.

Based on data collected for this month, Auction.com predicts existing-home sales will fall between seasonally adjusted annual averages of 4.97 and 5.38 million units, with a targeted prediction of 5.19 million. October's sales rate comes just above September's rate of 5.10 million (as predicted by Auction.com).

Nowcast's development comes more than half a year after Google's growth equity fund, Google Capital, invested $50 million into Auction.com. Using that support and Google's access to data and analytics, the company says it hopes to expand its monthly forecast to also predict new home sales and home pricing trends.

"Auction.com's ability to deliver timely analysis of current market conditions can provide critical insight and enhanced predictability to industry professionals, economists and government entities alike," said Rick Sharga, EVP for Auction.com. "Since real estate trends play such a vital role in our overall economy, there's a compelling need for accurate, more timely housing market forecasts, rather than data that comes out two to four weeks later."

Buyer Beware: 5 Things Sellers Try to Hide

Found your dream house, made the right offer, and you’re ready to make a down payment? Not so fast. That fantasy home can turn out to be a real nightmare after you sign on the dotted line if the seller failed to disclose that that cracked foundation or pet infestation.

Here are five things sellers commonly try to hide during the sales process, and the questions you can ask to suss out the truth.

1. Leaks

Leaky faucets, radiators, ceilings, roofs — you name it, real estate agents, brokers, and sellers might try to temporarily

Buyer can actually include their questions about a home as a condition of their initial offer.

plug that drip to attract offers. But sometimes honesty is a better policy and shows you that the property is well-maintained. New York City-based Jennifer Breu once showed a home in which the ceiling was falling down and she still got a ton of offers on it and made the sale by being honest that the repairs would be made soon.

“Leaks are very common, but they can be fixed very easily before the close,” says Breu, a licensed sales person with Charles Rutenberg Realty who also represents buyers. “It doesn’t pay to mask something that isn’t a huge issue and can be fixed. Transparency increases value.”

2. Pests

The entire house looks wonderful, but believe it or not, termites could be eating away inside the walls. Disclosure laws about pests vary from state to state. Texas, Michigan, and North Carolina require that sellers tell buyers about an potential infestations during the sales process.

3. “Emotional defects”

Depending on the state, sellers don’t necessarily have to disclose whether a not a property is haunted or if “emotional defects” such as a death or a murder occurred there. Last summer, the Pennsylvania Supreme Court ruled in favor of the team that sold buyer Janet Milliken a house and did not tell her it was the site of a murder-suicide in 2006.

4. Issues with the roof or foundation

Great Neck, N.Y.-based Ian Aronovich and his wife fell in love with a house last year. Unfortunately, they spotted major cracks in the foundation that would’ve cost tens of thousands of dollars to repair.

“We smelled some mold in the basement, and asked the owner if we could cut a small section of sheetrock to check for the source of moisture,” Aronovich says. “As we peeled away the sheetrock, we noticed the crack. In the end, we did not buy that house.”

5. Age of systems

Atlanta RE/MAX realtor and team leader Maura Neill sees a lot of sellers try to hide the ages of water heaters and HVAC systems with two simple words: “Don’t know.”

But a home inspector could find out that information very quickly. Neill says she and her buyers tend to get a good sense of the selling side from the property disclosure.

“When it states the bare minimum, we know we are either dealing with a disconnected or uninvolved seller who doesn’t really know their home or with a seller who knows there are issues and doesn’t want to disclose them.”

Questions You Should Ask:

• Don’t just limit your questions to the real estate agents — ask your potential new neighbors about the home as well, says Rhonda Duffy, a top real estate agent in Atlanta. “Buyers should first ask three sets of neighbors key questions, including: ‘Why are the sellers moving?’, ‘Have you seen any repair trucks there lately?’, and ‘Are there any construction problems in the neighborhood?'”
• Ask to see references and get a getting a C.L.U.E. Report — that stands for Comprehensive Loss Underwriting Exchange, a claims information report — from your homeowner’s insurance agent.
• If a buyer wants to make a quick offer, but still has questions, Neill suggests that they can actually write that as a condition of their initial offer that those inquiries can be answered at a later date before close. “Being diligent in getting questions answered is an important piece of the puzzle for buyers, who should take every opportunity to get to know as much about the house they are buying from the person who knows it best: the seller.”

Report: Consumer Confidence Recovers in October

Author: Tory Barringer October 30, 2014Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services31

Consumer confidence bounced back in October, thanks to a sharp rebound in Americans' outlook for the economy.

The Conference Board's Consumer Confidence Index, which fell to a revised reading of 89 in September, surged back up to 94.5 in the group's latest report.

The recovery came mostly from a spike in the consumer expectations component, which jumped nearly nine points to 95, the Conference Board reported. The Present Situation Index, meanwhile, edged up to 93.7 from 93 in September.

"A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers' view of the present situation," said Lynn Franco, director of economic indicators at the Conference Board. "Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market, and are more optimistic about their future earnings potential."

At the moment, Americans' view of business conditions are mixed, with increases in both the number saying the business environment is currently good and those saying conditions are bad. On the jobs front, attitudes are slightly more positive: The share of consumers saying jobs are plentiful ticked up to 16.5 percent, while those saying jobs are hard to get fell marginally to 29.1 percent.

For the months ahead, 16.8 percent of respondents anticipate the economy will add more jobs, up from 16 percent in September. Nearly 14 percent expect fewer jobs compared to almost 17 percent in the last survey.

Also promising: 17.7 percent of consumers expect their incomes to rise, up from 16.9 percent, while fewer expect their incomes to fall.

While this month's rebound in sentiment is a promising sign, economists Mark Vitner and Michael Wolf at Wells Fargo cautioned not to read too much into the increase, pointing out that few Americans are making plans for major purchases anytime soon.

"The share of consumers planning to buy a home held steady at 5.1 percent, which is lower than the 5.5 percent reported a year ago," they said in a note. "Plans to buy a car or a home should be somewhat sensitive to interest rates, which fell over the survey period and made headlines as banks saw a rise in inquiries regarding refinancing.

"Given the drop in rates, the relative weakness in these two indicators does not spell a strong rebound for either sector in the months ahead."