August 20, 2015

Consumers Believe Their Home Is An Investment

A report from CNN Money. “Home Depot on Tuesday revealed it experienced a record number of transactions in the last three months. On average, shoppers spent more than at any point since 2006 and sales at stores open for a year or more jumped 6%. All of that suggests Americans are ramping up spending on efforts to spruce up newly-purchased homes or ones they’d like to sell. ‘When consumers believe their home is an investment, not an expense, they spend differently. We are seeing that,’ said Carol Tome, Home Depot’s chief financial officer.”

KIRO TV in Washington. “Renters in King, Snohomish and Pierce counties are spending 31.6 percent of monthly gross income on rent, which is the highest it’s ever been, according to Zillow. The CEO of Realogics Sothebys International, Dean Jones, said many current renters have no idea that they’re prime candidates for home ownership.Jones said the cost of renting is not just the money being turned in to a landlord every month, but the lost opportunity to buy a home before prices potentially soar higher. Jones said the Internal Revenue Service is also allowing each parent of a buyer to pay $14,000 toward the down payment of a child’s house without any tax consequences.”

“Cassie Daughtrey, a broker, was involved in three to four sales in the last month that went to buyers who had previously been renting. Daughtrey said, ‘In Green Lake, a big house can rent for sometimes over $5,000 a month. If that’s what you’re paying in rent, you can buy a house. I know you can.’”

The Times Call in Colorado. “Rising Boulder County home prices are pushing thousands of people out of the running for home ownership, with more than 60 percent of Boulder County residents age 25 and older earning too little to purchase median-priced homes, according to an analysis by the Times-Call. County wide, median home prices have risen 32 percent since 2010, to $469,000 in the first half of 2015, mirroring major gains in the larger Denver metro market. But median income is just $67,959, well below the $90,000-$100,000 needed to purchase a home here.”

“A July report from the Federal Reserve Bank of Kansas City found that Colorado was the least affordable housing market in the Rocky Mountain states. That’s both a blessing and a curse, said Longmont mayor pro tem Brian Bagley. ‘If houses were $120,000, that wouldn’t be good, (because it) would mean the economy was bad and no one would want to live here,’ Bagley said. ‘So it’s a double-edged sword.’”

The Washington Post on Florida. “Jack McCabe watched the last housing bubble rip through South Florida like a hurricane. For 15 years, he has consulted on real estate deals here, advising clients large and small on what to buy and where, and on when to get out. And increasingly, he worries that South Florida is drifting back into bubble territory, in danger of another collapse that could hurt homeowners and investors alike.”

“‘We have short memories here in Florida, as I think they do in most places,’ McCabe said in a recent interview. ‘And we’re back at it. Every project is getting approved again. Particularly in the luxury condo sector, there’s going to be a crash in prices in the next few years.’”

The Idaho Mountain Express. “The Wood River Valley is once again seeing the flow of tourists and wealthy home-buyers that it relies on. Prices depend on the number of units for sale in the valley. During the worst of the recession, total listings of Sun Valley Board of Realtors members grew to more than 2,400 properties. Just a few years prior, during the rush, said Board of Realtors President Jed Gray, they typically sat on 1,100 to 1,150 properties.”

“The company ‘chipped away’ at the distressed inventory once the economy began turning around in 2013. By the end of 2014, it got down to only 1,250 properties. However, following a profitable second quarter, the market became flooded with sellers and—after a ‘lackluster’ July—it’s back up to 1,750 units, Gray said. ‘It really takes the pressure off a buyer because they have many more choices than they had before,’ he said. Sue Englemann of Sotheby’s International Realty is showing a multi-million-dollar home in Sun Valley this week—and she says the time is ripe. ‘The selection of high-end properties has never been as strong as it is right now,’ she said.”

NPR on New Jersey. “Michael McCabe still lives in the neighborhood where he grew up, Woodbury Heights, N.J., a middle-class suburb of Philadelphia. He knows which houses are in foreclosure and which have been abandoned. The latest seems to be right behind his own. ‘We don’t know what’s going to happen,’” he says. ‘We’re kind of prepping, because a gentleman who was there, who rented, came and told us, ‘I’m just letting you know: I’m moving. That means the grass isn’t going to get cut by me.’ And the house is in foreclosure.’”

“With the growing backlog of foreclosures, local officials are having a hard time keeping track. Chad Bruner, administrator for Gloucester County, N.J., says individual towns are having trouble getting even the most basic information from banks. This summer, Bruner commissioned an outside company to track all the abandoned foreclosures across the county to help towns make sure these houses don’t become eyesores and hassles for the neighbors.”

“But back in Woodbury Heights, McCabe and his wife, Maureen, are skeptical — after all, one neighbor’s house has been empty for seven years. She says this used to be a beautiful house. Now it’s hard to imagine anyone buying it. One window is boarded up. She says it’s hard to see this house every day and wonder what it means for her neighborhood. ‘I love my home; I love this town,’ she says. ‘I wouldn’t want to sell. If I had to sell, I know I wouldn’t get the value of what it’s really worth.’”

Bits Bucket for August 20, 2015

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