The Rise of the Young Buyer

A new generation is skipping the 'starter home' and betting heavily on high-end real estate.

Two years ago, when he was 26, Matt Winter paid a little over $1 million for a four-bedroom, Mediterranean-style house in Culver City, an artsy, formerly industrial section of Los Angeles. This month, the now 28-year-old Mr. Winter, who runs his own interior design firm, paid about $1.7 million for his second home, a three-bedroom, Spanish-revival in Westwood, a neighborhood near UCLA.
"I have always felt that having your money in property is the safest and best thing to do if you want to grow your personal wealth," says Mr. Winter, who founded his design company at 23. None of Mr. Winter's assets are in the stock market—he says the market "spooks him" and that he prefers to invest in real estate.
Mr. Winter is part of a growing group of wealthy young buyers who are making inroads in the world of high-end real estate, acquiring properties at prices, and at a pace, that brokers say they have never seen before. Real-estate agents say that young people are buying more expensive homes than previously. They are also more likely to buy several properties, and use one as an investment. Buying real estate has grown more attractive, these young buyers say, compared with the stock market, which appears riskier to a generation that entered the workforce during a market correction.


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Real Estate Trends

A New Study from Green Builder Media Shows Consumers Are Looking for Sustainable Green Building Products When Buying or Upgrading Their Home

When it comes to homebuilding materials, consumers increasingly want products that are American-made, sustainable and beautiful. In fact, according to a recent Green Builder Media (http://www.greenbuildermedia.com) study, almost 85 percent of respondents had a positive association with the term “green” and wanted to be known for having a green life.
Green Builder Media’s founder and sustainability expert Ron Jones explains that green living and products that are made in America go hand in hand on “The Daily Buzz,” a nationally syndicated morning show featuring news, weather and entertainment.
In the segment, Jones emphasizes that consumers are already participating in the green home revolution, with indoor air quality, water management, and energy efficiency leading their list of concerns. Many of these educated consumers also understand the importance of investing in U.S.-made products and manufacturing facilities that support the American economy and limit harmful emissions into the atmosphere by reducing the miles products need to travel to get to consumers.


The future is clear,” Jones says. “We need to produce durable homes with better indoor air quality, that are low maintenance, and that offer a better quality of life.

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Shutdown ends, but aftermath affects one Rockford area family

Over the last two weeks, we've shown who and what's faced impacts from the federal government hiatus. For one Rockford area family, a normal next step has had them following politics closely. While the shutdown is over, it's put the brakes on this family potentially buying a home.

This past weekend, Dan and Becca Jensen found the house perfect for their growing family. They say it's a short-sale that's been on the market for five weeks. Dan says the bank managing the sale requires Federal Housing Administration, or FHA, appraisal, which, for the Jensen's, didn't happen right away because FHA appraisers faced furloughs. Even though the shutdown is over, their home-buying process might still see a slowdown.

"We're still going to be delayed on buying this house because [the FHA has] to catch up now." -Dan explains.

He says his family is ready to call a house their own.
"It's tough because as a growing family, we're living in a two-bedroom apartment right now. We've got two two-year-olds and a third kid on the way and we've got no place to put a nursery. We have no place for the kids to play. We've got no yard, we've got a single-car garage with no storage and our house is literally just filling up with stuff our little apartment." -he says.

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The Price of Real-Estate Experience: $25,000

Can you put a price on experience? In real estate, you can. It is about $25,000 for the average house.

Veteran agents sell homes for an average of 12% more than their less experienced counterparts, says Bennie Waller, professor of finance and real estate at Longwood University in Farmville, Va. Veteran agents also tend to list more new properties, more townhouses and condominiums and larger properties.

The more experience you have, the more likely you are to sell the properties that you list, the more likely you are to sell it at a higher price and the less time it stays on the market," Prof. Waller says.

Prof. Waller, along with Ali Jubran, a student at Longwood University at the time, examined 10,065 real-estate listings in a mid-Atlantic multiple-listing service from March 1999 to July 2009. They divided the listings into three groups—ones listed by agents who have been licensed for two years or less (called rookies), agents who have been licensed for two to 10 years and agents who have been licensed for 10 years or more (called veterans). They controlled for property characteristics such as size and location to isolate the "experience variable," and then compared the results for rookies and veterans. The study was published in the Journal of Housing Research in May 2012.

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Find the Perfect Neighborhood!

How to scout out the best place to call home:

Once you've become pre-qualified for a loan, you should be ready to put your house-hunting efforts into full gear. But don't skip the important step of scouting out neighborhoods before you start your search for the perfect house.

The neighborhood in which you live will heavily dictate your whole way of life—things like walking to a nearby park with your kids, knowing your kids are attending good schools, feeling safe when your children play outdoors, being close to restaurants and shopping, enjoying a short commute, and knowing your home will appreciate at a healthy rate.

Of course one way to get started in your neighborhood search is to get in your car and explore, especially if you're unfamiliar with the area. Get an idea about the neighborhoods by driving around and seeing which areas appeal to you. Walk around, explore, and talk to some of the residents.

Take note of the general appearance of the homes. Are they well maintained? Are they nicely landscaped?

If you have children, you might be looking for a neighborhood with plenty of children around, as opposed to neighborhoods that attract more seniors or young singles.

Other factors you'll want to consider are the schools, crime, your family's specific needs, and appreciation - as in how much the value of the home is likely to increase.

 

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Are You Ready to Buy a House?

Answering these eight questions will help you decide!

The idea of owning your home is an exciting one, but how do you know if you’re ready?

 

 Before you take the plunge, answer the questions below.

 

What’s your financial situation?

Having a clear understanding of your finances is necessary when you’re considering buying a home. Prior to speaking with a real estate agent, you should make a budget to see how much you can reasonably afford to pay. Don’t forget to factor in the cost of taxes, insurance premiums, maintenance and other upkeep.

Can you afford even the initial costs?

Down payment amounts vary based on the type of loan you’re offered or if you’re eligible for a first-time homebuyers’ program, but remember that the more you put down, the lower your mortgage payments will be.

Other initial costs can be substantial: loan set-up fees, home inspections, insurance, property taxes and other fees will cost you about 2 to 4 percent of your home price.

Is your money organized?

Hopefully you’re the kind of person who balances your checkbook and understands where your money goes, but if you take a more lackadaisical approach to your finances, you’ll need to step up your game. Get organized, check your credit report and keep building your savings. Getting your affairs in order helps you improve your credit score, qualifying you for better interest rates, and good financial records will help you take full advantage of tax deductions

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Take Back Your Energy Bills — Energy-Efficiency Measures that Work for You

You know that 10 or 20 pounds that you just can’t seem to lose? You do the right thing — eat kale or log time on the StairMaster — but the weight clings. You feel powerless.

It’s like that with our energy bills, too. Eighty-nine percent of us think we’re not using as much energy as we did 5 years ago, and almost one-half of us think our homes are energy efficient. But 59% also say our energy bills have gone up, according to consumer research by the Shelton Group, a marketing and advertising agency that specializes in energy-efficiency issues.

Call that the Snackwell’s effect, says Shelton Group CEO Suzanne Shelton. Basically, we’re saying, “I bought these CFLs so now I can leave the lights on and not pay more. I bought a high-efficiency washer and dryer because I want to do more laundry without paying more. I ate the salad, so I can have the chocolate cake.” 

Unfortunately, that disconnect has led to defeat. We feel victimized by our energy bills and powerless to the point where we’re making fewer energy-efficient improvements. In fact, Shelton’s research shows consumers made only 2.6 improvements in 2012 compared with 4.6 in 2010.

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What Does the Government Shutdown Mean for Realtors?

Oct. 1, 2013

Congress has failed to approve a Continuing Resolution (CR) providing funding for most government operations. Therefore, spending authority for most of the government expired at midnight on Sept. 30, 2013. Until legislation providing for funding is signed into law, many offices and programs of the federal government are now shut down. This means many, but not all, government programs, including some that impact federal housing and mortgage programs, have been suspended or slowed due to the lapse in government funding. The Office of Management and Budget (OMB) requires each agency to have contingency plans in place. The information below is based on NAR staff review of agency contingency plans for the current shutdown and past experience with previous shutdowns and near-shutdowns.

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