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Millennial homebuyers are not actively seeking

 

Good morning, Orlando!

Millennial homebuyers are not actively seeking to buy a house in Orlando, according to a new study by LendingTree.

In fact, out of the 100 cities ranked, Orlando came in at No. 80. See the data here.

Mortgage requests for buyers under 35 were analyzed between Feb. 1, 2017, and Feb. 1, 2018, then ranked alongside data about the average age of the buyer under 35, credit score, down payment and requested loan amount.

The study found cities in the Sun Belt like Las Vegas, Tuscon, Ariz., and five Florida cities as least popular, which could be because of their popularity instead with retirees, as well as high cost of living, according to LendingTree.

About one-third of mortgage requests through the company were from those 35 years old and younger.

And be sure to check out these other Monday headlines:

New project with shops, may be on tap for the area near SunRail station
A South Florida developer is eyeing 18 acres near the SunRail station in southwest Orlando for a possible mixed-use development. The project would include apartments, townhomes and a two-story office-and-retail building on Sand Lake Road and Orange Avenue. More here.

RESIDENTIAL REAL ESTATE
Images revealed of apartment buildings at Disney’s Flamingo Crossings
Rendering of the community center at Flamingo Crossings

Online mortgage lender expands into Florida, seeks to disrupt the industry
Lenda, an online mortgage company that claims it can close home loans 3.5 times faster than the industry average is expanding into Florida. Lenda uses a predictive algorithm, rather than going through human loan officers, to determine whether a borrower is creditworthy. More here.

N.C. food production biz considers adding 95 jobs in Melbourne
MG Foods Inc., a North Carolina-based food production, packaging, and distribution company, has applied for property tax breaks with Brevard County in order to expand its workforce by 95 jobs, Florida Today reports. More here.

How to get a piece of the work on the next phase of OIA’s new terminal
Orlando International Airport is looking for some help as it plans the next phase of its $2.15 billion expansion. The Orlando airport — the busiest airport in the state — is a huge driver of the area’s and the new south terminal will raise its capacity by 10 million passengers. More here.

Mortgage rates hold steady
Mortgage rates held steady this week, according to Freddie Mac. The 30-year fixed mortgage averaged 4.45% for the week ending March 22, essentially unchanged from 4.44% the previous week. Favorable mortgage rates have helped propel U.S. home sales and the refinance market.

And higher gas prices are on the way
Expect higher gas prices this week, AAA says. The Florida average has risen 10 of the past 12 days, climbing a total of 6 cents. You can expect prices to climb at least another 10 cents in the coming weeks. Gas prices in Orlando currently average $2.48 a gallon.

What Does The 2018 Housing Market Look Like?

Oftentimes, it’s difficult to predict the . In the last decade alone, we’ve seen a market crash and slow rebound.

However, while some experts are focused on yet another housing bubble, real estate has been on the rise. In October, sales of new U.S. single-family homes hit their highest level in 10 years across the country.

What’s the market forecast for next year? Industry insiders and top experts have similar predictions.

As a future or current homeowner, it’s important to stay on top of the changes in real estate. Read on to learn what the 2018 housing market has in store.

Inventory Shortages

New home sales may be on the rise, but the number of available is on the decline.

Low home inventory has made home prices more expensive in recent years. This trend will continue in 2018, making it more difficult for first-time and budget-focused buyers to enter the market.

There are 12 percent fewer homes on the market than there were a year ago. If this trend continues, homebuyers will be faced with stiffer competition and higher prices. This will make the demand for home purchase loans even greater.

What’s contributing to this low inventory? There are several theories.

Rising housing costs have added emphasis to high-end construction. More expensive homes are being built, which is making it more difficult to find affordable homes.

Homeowners might also be less likely to sell their homes than they were pre-crash. Despite it being a seller’s market, they aren’t looking to enter the market. They’d rather stay locked into their current mortgage.

Whatever the reason, the inventory shortage is expected to continue. Low inventory and high prices will force new homebuyers to get creative if they want to find an affordable home.

Housing Market Opportunities

Certain demographics have seen an abundance of housing opportunities. They can expect these opportunities to be even greater in 2018.

One such demographic is sellers of mid-priced single-family homes. These are some of the most in-demand homes across the nation.

Developers and sellers can make big money on this valuable sector of the market. More millennials are seeking to buy starter homes while baby boomers are scaling back.

The housing shortage isn’t all bad for buyers. Experts are predicting that housing prices will slow down in the coming year.

Forecasts show that the average U.S. house price growth will be 4.9 percent in 2018, which is lower than the 6.6 percent growth seen in the second quarter of 2017.

Prices might be curbed thanks to mortgage rates. A moderate increase in mortgage rates should help decrease refinancing activities.

You can still expect higher growth in big markets such as Seattle and San Francisco. Yet good mortgage rates, limited refinancing, and market stability will still help buyers in 2018.

Your Next Move

Predictions show low-inventory, high-prices, and market stability in 2018.

You don’t have to wait until these predictions come to fruition. Contact us now to learn more about buying your dream home. We offer free loan advice with no cost or obligation.

Orlando voted the No. 1 spring break destination

 

Good morning, !

Orlando roadways and area attractions are going to get a whole lot busier next month because we have  been named the No. 1 spring break destination for 2018, AAA reports.

Three cities are among AAA’s 10 Most Popular Destinations for the month of March, based on air and tour bookings made with the travel agency. Besides Orlando, Fort Lauderdale came in at No. 2, while Miami is No. 8. Other popular destinations include Honolulu, Cancun, Maui and Montego Bay.

A recent Consumer Pulse survey of Floridians who are planning a vacation in 2018 revealed that:

  • 55% of Florida travelers will take a spring break vacation of three days or more.
  • 43% will travel with family.
  • 12% will travel with friends.
  • 80% of Florida millennials will take a spring break vacation of three days or more.
  • 61% of millennials will travel with family.
  • 19% will travel with their friends.

Lockheed Martin plans to expand Orlando division by 255,000 SF

Global defense contractor Lockheed Martin Corp. will expand in west as it continues to grab big contracts with work in Central .

The Bethesda, Md.-based company declined to share details until Feb. 14, when it breaks ground at 2 p.m. on its planned new 255,000-square-foot Research and Development II building on the property of the Missiles & Fire Control facility at 5600 Sand Lake Road. The new building is will open in 2019 and lead to job growth.

Orange County Mayor Teresa Jacobs, Orlando Mayor Buddy Dyer, Florida Department of Economic Opportunity Executive Director Cissy Proctor and Lockheed Martin Missiles & Fire Control Executive Vice President Frank St. John will attend tomorrow’s ceremony.

Lockheed Martin is expected to expand its workforce in Orlando as the company was approved for a $3.5 million incentive package from Orange County and Florida last year to create 500 jobs by the end of 2022. Currently, Lockheed Martin has more than 650 job open on its website, calling for software and system engineers, program managers and more.

Lockheed Martin in Orlando often scoops up big contracts. The firm recently grabbed a $148 million deal for its stealth jet fighter F-35 with a chunk of the work happening in Orlando.And on Feb. 12, Longbow LLC — a joint venture between Lockheed Martin (NYSE: LMT) and Northrop Grumman Corp.(NYSE: NOC) — scored an $8.8 million contract from the U.S. Army for laser and longbow Hellfire engineering services. Work for the one year contract will be performed in Orlando and two other areas.

Lockheed Martin is Central Florida’s seventh-largest employer with more than 9,000 workers, according to Orlando Journal research. Lockheed Martin is also the largest tech firm in Orlando.

 

 

The forecast from Kansas City Fed President Esther George: Despite blustery market, expect rate hikes.

George told a Kansas group that the stock market may have had a wild ride of late, but the ’s outlook remains strong, the Wichita Business Journal reports. She pointed to preliminary estimates of the gross domestic product growing at slightly less than three percent, low unemployment rates and signs of compensation increasing.

All of which should lay the ground for the Federal Reserve to continue raising the interest rate — perhaps half a dozen times through 2019.

 

 

“The federal funds rate remains well below what estimates are that its longer-run value should be,” George said. “I’m often asked how many rate increases we’ll see this year. Together, the (Federal Open Market Committee) is calling for about three 25-basis-point hikes in the fed funds rate this year and about the same number next year.”

top 5 favorite Valentine’s Day gifts

Good morning, !

With Valentine’s Day just a few days away, many of us are making reservations and hitting the stores to find the perfect gift.

But did you know that the “perfect” gift varies drastically by state, as do many Valentine’s Day trends and traditions.

For example, while roses and chocolates may be considered classic Valentine’s gifts, but that’s not the case in several states that prefer, instead, to find more unique gifts for their loved one.

Here in the Sunshine State, we do prefer to go the more traditional gift route, with roses, teddy bears, chocolates, flower bouquets and a pedicure coming in as the top five gifts. In contrast, Florida shoppers said a bottle of alcohol and lingerie were their least favorite gifts for Valentine’s Day.

Here’s some other interesting data, courtesy of Offers.com:

  • To celebrate the holiday, 39% of Floridians said they would be staying in for the night. 28% will be heading to a romantic restaurant for dinner, while 2% plan to spend the night out on the town.
  • While shopping early can help you snag the best deals, 13% of Florida shoppers admitted that they wait until the week of Valentine’s Day to buy their gifts.
  • When it comes to the top treats they hope to receive on Feb. 14, Floridians want a box of chocolates (32%) and chocolate-covered strawberries (30%).
  • Roses steal the show as the top Valentine’s Day flower in Florida (42%). If you want to give a more unique gift this year, consider daisies (16%) and sunflowers (14%).

US Economic Observations: January 2018

It is well known that there are issues in the home purchase market, but there is less information on the single-family rental market, which makes up one-half of residential rentals. The CoreLogic Single Family Rental Index reflects rents paid on single-family houses and condos, and using this index we can dissect rent growth by both price tier and metro area.

LPI Blog

Figure 1 shows the 12-month change in our national rental index from 2005 to today. Rents for single-family fell during the Great Recession but then bounced back strongly from their low point in mid-2009 and have been trending up, mirroring home price growth. In October 2017, the index measured rent growth of 2.7 percent from a year ago. We can also show rent changes for the high-end (those rents 25 percent or more above the median rent in that market) and the low end (those rents 25 percent or less below the median in that market). The low-end single-family rental tier lagged the high-end tier from mid-2009 to early 2014, but then the low-end began steadily outpacing the high-end and the difference is growing. This mirrors the same high demand, low- supply forces that have caused low-end home prices to outpace high-end prices, as evidenced by shorter days-on-market and tighter inventory for low-end homes. Investors who entered the market to buy up distressed properties during the housing crisis might be exacerbating this trend in the rental market. High-end rents increased 2 percent in October from a year ago, while low-end rents increased by more than twice as much – 4.2 percent.

LPI Blog

We can also look at the difference between low-end and high-end rent growth by metro area. Figure 2 shows that low-end rents have been increasing in the largest 20 markets, with Seattle leading the large metros with the biggest increase in rents at 7.9 percent in October. Austin had the smallest increase in low-end rents of the large metros. In most of the 20 markets shown in the chart, low-end rents are increasing faster than high-end rents, and the trend is happening all over the country, not just in one region. The one exception is Warren, Mich., where low-end and high-end rents are increasing at about the same rate. The biggest spread in low-end and high-end rent increases was in Charlotte, N.C., where the low-end increased 5.6 percent and the high-end showed no increase.

The single-family rental market is an important and often overlooked segment of the and is affected by rising demand and constrained supply just like the rest of the housing market. The demand and supply pressures are especially apparent for lower-cost homes, for which rents are increasing at a much faster rate than for higher-cost homes

February 06, 2018, Irvine, Calif. –

  • Largest Price Gains During 2017 Were in California, Idaho, Nevada, Utah and Washington
  • Affordability Continues to Erode, Especially in Low-Price Range
  • Home Prices Projected to Increase by 4.3 Percent by December 2018

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its CoreLogic Home Price Index (HPI) and HPI Forecast for December 2017, which shows home prices are up both year over year and month over month. Home prices nationally increased year over year by 6.6 percent from December 2016 to December 2017, and on a month-over-month basis home prices increased by 0.5 percent in December 2017 compared with November 2017,* according to the CoreLogic HPI.

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 4.3 percent on a year-over-year basis from December 2017 to December 2018, and on a month-over-month basis home prices are expected to decrease by 0.4 percent from December 2017 to January 2018. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The number of homes has remained very low,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

According to CoreLogic Market Condition Indicators (MCI) data, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 35 percent of metropolitan areas have an overvalued housing market as of December 2017. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. Also, as of December, 28 percent of the top 100 metropolitan areas were undervalued and 37 percent were at value. When looking at only the top 50 markets based on housing stock, 48 percent were overvalued, 14 percent were undervalued and 38 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

“Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock. The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington,” said Frank Martell, president and CEO of CoreLogic. “As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first time buyers and moderate-income families to buy. At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”

*November 2017 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Methodology

The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indexes are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers—“Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, Core Based Statistical Area (CBSA) and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.

More Than A High Appraisal

Homes appraised above contract price had above-market appreciation rates

Housing Trends

For homebuyers, the outcome of appraisal is one of these three scenarios: (1) appraised value closely matches sales price, (2) appraisal falls short of sales price or (3) appraisal is higher than sales price. If a home sells for less than its appraised value, does that mean that the buyers got ‘a bargain,’ and should anticipate above-average appreciation during their ownership period?  Conversely, if a home sells for more than its appraised value, does that mean the buyers may have ‘overpaid,’ and could expect a below-market rate of price growth during the length of time they own the home?

Evidence seems to support the hypothesis that there is “money left on the table” in high-appraisal transactions. When property price appreciation was calculated for twice turned-over in the California market – first sale observed with a full appraisal and sales closing price in 2010 or later, and then a second time with a sale by the owner – homes previously appraised with a sizable premium above the contract sales price were found to have above-market appreciation rates.

Yanling Mayer Blog Post

As shown in Figure 1, excess rates of price appreciation averaged about 3.3 percent per year.  By comparison, closely appraised homes appreciated at about the market average, while homes with appraised value below their contract sales price appreciated 0.3 percent per year slower than the market.  Excess appreciation rates were annualized price gains at re-sale—annualized percentage difference between prior purchase price and subsequent re-sale price, in excess of average market appreciation during the same ownership period.  The CoreLogic county-level Home Price Index (HPI) was used as the benchmark of market-wide appreciation.

Yanling Mayer Blog Post

Figure 2 shows that high-appraisal homes – whether a distressed sale or not – had above-market price appreciation, averaging 3.15 percent among non-distressed sales or 3.9 percent among distressed sales. Real estate owned (REO) and short sales exhibited above-market appreciation rates across all three appraisal valuation outcomes, likely driven by their below-market pricing to motivate sales.  Investors’ value-enhancing repair and refurbishing work could also be a factor for their higher re-sale values – despite that only homes that were held for at least 18 months since initial purchase/appraisal were included in the analysis.  For both non-distressed and distressed sales, median prices of high- and low-appraisal homes were lower than closely appraised homes. Since both high- and low-appraisal homes may have drawn disproportionately from lower-priced homes, faster price appreciation experienced by low-valued homes alone could not explain away the large disparities in price appreciation between the two.[1]

In Figure 3, sample homes were further sub-grouped by the year in which they were initially purchased and appraised. Given significant market dynamics during 2010-2015, property appreciation rates were likely to vary depending on the timing of initial purchase.  They ranged between 2 and 5 percent, reaching the highest during the 2012 market bottom when market-wide underpricing was likely the severest.

Yanling Mayer Blog Post

A city-level breakdown is shown in Figure 4. Stockton (5.87 percent) and Riverside (5.22 percent) had the highest excess price gains, followed by San Francisco (4.62 percent), Los Angeles (4.35 percent), Bakersfield (4.24 percent), and San Jose (4.04 percent).  Due to the use of county-wide HPIs for benchmarking, some cities – such as Oakland, Riverside and others – that may have experienced faster-rising prices than its county as a whole could well see across-the-board positive excess price appreciation.

Regardless of the reason(s) why a home may have sold for less than its appraised value, the buyers appear to have benefitted by having a faster-than-market appreciation during their ownership tenure.

Inventory Shortage at Crisis Levels in Nation’s Hottest Housing Markets

For-sale inventory is stuck at crisis levels in some of the nation’s hottest housing markets where home values are appreciating fastest. The number of homes for sale nationwide has declined on an annual basis for the past 35 straight months, and just 16.7 percent of a panel of housing expertsii surveyed in December 2017 expect a meaningful increase of home building in 2018, a sign that limited inventory could continue to drive the housing market this year.

 

“Tight inventory fueled by a tight labor market and low interest rates propelled home values to record heights in 2017, but the outlook is now much less certain,” said Zillow senior economist Aaron Terrazas. “Tax reform will put more money in the pocket of the typical buyer, but will limit some housing-specific deductions. Overall, this should increase demand for the most affordable and ease competition somewhat in the priciest market segments. On the supply side, the market is starving for new homes, but it won’t be easy for builders struggling with high and rising land, labor and lumber costs. Aging millennials and young families may be able to find more affordable new homes this year, but they’ll most likely be in further-flung suburbs with more grueling commutes to urban job centers.”

Lack of inventory, coupled with strong demand from home buyers, is one reason why home values across the country are reaching new peaks. The median U.S. home value rose 6.5 percent over the past year to $206,300, the highest it has ever been.

 

What salary do you need to afford an average home in Orlando and 49 other cities?

Median home prices have risen in most major U.S. cities over the last year, including Orlando. So when factoring in interest, taxes and insurance payments, how much would you really need to make to afford a home?

 

See the slideshow with this story to find out where Orlando and 49 other large cities rank, including where national numbers fit among them, according to HSH.com.

With little new housing supply, continues to be a problem in most cities, the researchers conclude.

 

Overall across the nation, an average salary of $55,390 would pay for a home that averaged $254,000, which is a 5.26 percent increase from 2016. That’s if the homebuyer put a 20 percent down payment — the salary needed increases to $63,941 if only buying with a 10 percent down payment, reports HSH.com.

While most markets in the 50 largest U.S. states saw a decline from the second quarter to third quarter of 2017, almost all saw rises in median home prices from this time last year.