Top Trends in Housing

2017 is looking like a good year for newly built homes. According to the Realtor.com’s 2017 Housing Forecast released Nov. 30, 2016, new-home sales are expected to grow in 2017 and new home starts are expected to increase 3 percent.

The national real estate market, however, is expected to see slow, but moderate, growth and home prices are expected to increase 3.9 percent. Interest rates will likely reach 4.5 percent.

One question many have is how the presidential election will affect home prices. The forecast doesn’t see any effects from the election. What does change is the number of first-time buyers. According to the forecast, demographics and a stronger economy were set to increase the number of first-time buyers in 2017; however, an expected increase in mortgage rates will likely be a challenge for this segment of potential homebuyers.

“With more than 95 percent of first-time buyers dependent on financing their home purchase, and a majority of first-time buyers reporting one or more financial challenges, the uptick we’ve already seen may price some first-timers out of the market,” Jonathan Smoke, chief economist for realtor.com, said in a news release.

In addition to fewer expected first-time buyers, here’s what the report named as the top five trends we’ll see in 2017:

Dominating the Market

Despite higher interest rates — and despite a lowered Millennial market share due to challenges to first-time buyers in 2017 — Millennials and Boomers are expected to dominate the market, not just next year, but for the next 10 years.

Millennial Hotbeds

Millennials are expected to purchase homes in the Midwest, particularly in Madison, Wis.; Columbus, Ohio; Omaha, Neb.; Des Moines, Iowa; and Minneapolis, where the Millennial market share for these markets is 42 percent, compared to the U.S. average of 38 percent. Why? These markets have strong affordability for Millennials, making the Midwest hot, even as interest rates go higher.

Price Appreciation Will Slow

Of the top 100 largest metros in the country, 46 markets are expected to see a slowdown in price growth of 1 percent of more — Lakeland-Winter Haven, Fla., Durham-Chapel Hill, N.C.,; and Jackson, Miss., will see the biggest slowing in price appreciation. Nationally, home prices will slow to 3.9 percent growth, year over year, according to the forecast.

Fewer Homes

A limited inventory of homes in the top 100 U.S. metros is not expected to change in 2017.

What to Know About Buying a Townhome

Whether you’re a single bachelor or bachelorette looking for your pad in the city or a retired couple looking for a maintenance-free lifestyle, the townhome life might be right for you.

But are you sure you know everything there is to know about buying a condo? Oh, wait, a townhome? Heck, is there even a difference?

No matter how much you think you know, it’s never a bad idea to do a little research before making a large investment like buying a townhome. So before you pull out your checkbook, take a look at some of the following tips and facts from a few townhome connoisseurs. 

You Say Townhome, I Say Condo

First things first, what’s the difference between a condominium and a townhome? Sometimes it just depends on who you ask.

“This is often confused,” says Jeff Benach, co-principal of Chicago, Ill.-based Lexington Homes. “A condo is actually a form of ownership, not a building or dwelling type. Townhomes can be either condo ownership, where everyone collectively owns all the ground, or ‘fee simple’ just like single-family homes.”

With fee-simple ownership, the buyer also owns the ground directly beneath the unit, while in both cases everyone collectively owns the common area of the complex, he says.

“Yet, in another definition, the difference is that the condo building would be multiple floors with a common entrance … whereas a townhome is more of an attached single-family residence,” adds Benach.

However, Karim Wahba, a Realtor with Realty One Group in Mission Viejo, Calif., has another interpretation.

“Some definitions state that if a property is only one story it’s a condo and if it has more than one level it would be a townhome, while others classify townhomes as those with attached garages,” he says.

The moral of this story? Call it what you want.

“When I meet with first-time buyers and they ask me that question,” adds Wahba, “I just make it easy on them and tell them it’s pretty much the same thing.”

A Home in Houston

There are plenty of good reasons why folks are flocking to Houston, Texas. 

According to the BBC, Houston is the second-fastest growing city in the States because of its robust job market and economy, not to mention the many attractions it has to offer.

Moving to Houston can help stretch the paycheck, but also increase your quality of life with the massive amounts of entertainment, art and education. Houston brings a lot to the table so it’s no surprise that for five years, Houston was ranked the No. 1 relocation spot in the United States. Here’s why:

1. Jobs

Houston added 95,800 new jobs in a single year from 2011 to 2012. Before that, Houston regained 182.6 percent of the jobs lost during the recession, which is interesting considering it was the last city to fall into the recession and the first one to come out of it. In fact, it’s still considered one of the fastest-growing cities in the nation thanks to its booming gas and oil industry. But that’s not the only thriving industry in Houston: the mining, architectural and engineering services, management, healthcare, and education industries also fare well.

Houston understands that it’s important to make a paycheck last, which is why Forbes has ranked them No. 1 for paycheck stretching and Monster.com said Houston is the best city to start your career. It’s hard to find an argument against living and working in Houston.

2. Entertainment

Houston is fun! There’s plenty to do for the entire family. It is home to NASA’s Mission Control, bat country — 300 species of bats, to be precise — a 3,000 square foot man-made maze, and some of the best barbecue in the state. Eat some boot-shaped chocolates at The Chocolate Bar and scream at the top of your lungs for pro basketball team the Houston Rockets at the Toyota Center. You’ll also want to explore the city’s underground tunnel system, which features a series of restaurants and shops. To get your culture fix, check out the BAPS Swaminarayan Mandir, a traditional Hindu temple, and the Museum of Natural Science, which features a butterfly center and planetarium. For some art, try the Houston Museum District, where you can enjoy modern art and tranquil spaces at the Menil Collection and Rothko Chapel.

3. Education

Houston is a city that is rich in distinguished school districts and prominent colleges and universities. The Houston Independent School District, the largest in the Houston area, serves 213 square miles with 288 schools, 13,000 teachers and more than 210,000 students. It’s helped build a highly diversified community and is one of Houston’s largest business enterprises. But this isn’t the only school district; in fact, Houston has 25 others, as well as 40 colleges and universities. Oh, and let’s not forget that Dennis Quaid, Loretta Devine and Jim Parsons all went to the University of Houston.

4. Housing

Houston-area buyers closed on 75,319 homes in 2014, which was a small increase over the previous year. Buying a home in Houston is the growing trend due to Houstonians’ increase in income, favorable interest rates and favorable home prices. In fact, home shoppers considering a new home have increased by 15 percent, also an increase over the previous year, thanks to Houston’s economic improvements in the last few years.

55 plus and senior living options

The graying of America is already upon us as the large Baby Boomer generation (age range 52-70) has hit or soon will hit retirement.

And that’s a trend that’s not going away anytime soon.

According to a report from the Urban Land Institute’s Terwilliger Center for Housing, 66 million people will be 65 or older by 2025 as compared with 48 million in 2015—an expected 38 percent increase in just 10 years. 

What’s on the horizon for 55-plus living options and what are developers doing to respond to what will be an ongoing need in the coming decades?

Let’s look at some of the 55-plus living trends, from age-restricted independent living communities to different levels of assisted living:

  • urban retirement,
  • mid-market options and
  • full-service facilities.

1. Urban Retirement

One of the traditional images of retired life is that of an age-restricted planned community with plenty of golf courses in sunny Arizona or Florida. This kind of community remains a popular model with both developers and residents.

But not everyone wants to retire to suburbia. Urban dwellers may not want to give up that lifestyle or want/need to stay close to family. Urban retirement has its benefits — walkability, access to public transportation, nearby amenities, etc. 

“We’re seeing a trend with developers of [urban] dense projects across the board, particularly around transit hubs,” says Richard Murdocco, a New York City-based real estate expert and founder of The Foggiest Idea, a public resource on real estate development. He added that developers seem to be embracing urban retirement properties again to respond to population needs. 

But quality urban retirement properties still present an underserved market.

“The few apartment projects designed with universal design principles — ADA (Americans with Disabilities Act), aging in place — sell fast,” says architect John Hrivnak, principal with Hrivnak Associates, Ltd., an architectural and real estate consulting firm that’s based near Chicago.

2. Mid-Market Options

Another underserved area that Hrivnak is seeing comes in communities with a population of 40,000 to 50,000 people. Not suburbs of large cities, these smaller cities aren’t entirely rural but not densely urban in nature either. They still have certain amenities, but may have a limited infrastructure that dissuades developers from building there.

“That’s the challenge of having an affordable urban-rural market, plus an affordable senior housing market,” Hrivnak says. “Once developers realize the costs of the real estate property, construction, pre-sale campaigns, and so on, the project is no longer mid-market. It now goes upscale.”

Hrivnak, who has worked on senior living projects since 1978, envisions what he calls “suburban stacked flats” or one-level living in a mid-rise tower at more moderate pricing. That means amenities would also be reduced from what’s available at more high-end properties, but the idea is to find an option for mid-market renters or buyers. 

3. Full-Service Facilities

Ensuring access to health care is a primary consideration retirees must face, regardless of their living situation. 

Telemedicine can provide retirement community residents with access to virtual appointments with primary care physicians or specialists, particularly helpful for those with mobility issues. 

For example, the investment firm Welltower, which provides real estate capital to senior housing operators and health care systems, is developing a 15-story senior living community in Manhattan that will focus on assisted living and memory care. Set to open in 2019, it is expected to have connectivity to the Manhattan health care system via telemedicine.

Another option is a continuing care retirement community (CCRC), in which a person moves to different levels of care as needed. 

“The philosophy behind a CCRC is the convenience it offers residents to be able to stay in one place and then transfer through different levels of care,” says Kyle Exline, executive director of The Clare, a 53-story CCRC in downtown Chicago. “The goal is to keep people as independent as possible for as long as possible and you can do that longer in a CCRC setting.”

Tips for moving to e a new house

Moving into a new home can be a big adjustment for you, your family and even your pets. The moving process definitely entails some planning, but it also rewards your efforts with a smoother move-in. And once you’re in your new home, there are some fun and creative ways to make your new house a real home. 

So, if you really want to settle in with a smooth and effortless move-in day, here are the 10 tips for moving into a new house you may want to jot down:

1. Change Your Address
2. Store Important Documents
3. Set Up a Security System
4. Check Up on Repairs
5. Get to Know Your Knew Home
6. Review HOA Regulations
7. Make Your Vision a Reality
8. Get to Know Your Neighborhood
9. Throw a Housewarming Party
10. Relax

Change Your Address

When moving into a new home, it’s important to spread the word. Be sure to file change-of-address forms with the post office so that your mail is sent to your new address. It’s best to do so before you move to make sure you don’t miss important mail, and so bills in need of payment are not delayed.

There are a few other places you’ll need to update your address: your driver’s license, voter registration, credit cards companies and banks, auto insurance providers, publication subscriptions and, of course, utilities.

Store Important Documents

Many things can get lost or temporarily misplaced in a big move. Moving van documents and important real estate papers can all too easily end up looking like trash in the midst of all your boxes, so be sure to keep these papers safe. Your closing documents make note of your mortgage, costs and ownership of the house, so definitely make sure those are tucked away safely.

Other receipts and papers that document your moving expenses may be tax deductible, so save those receipts. Furthermore, there will be several new appliances and systems in your new home. Keep all warranties and instructions for these items so that you know how to operate them properly or who to call for service.

Set Up a Security System

If your new house is not already equipped with a security system, you may want to consider setting one up. “For many people, a new home is a new environment and sometimes knowing that you’re protected can give you some sort of peace of mind,” says Kevin Raposo, of SimpliSafe Home Security, a home security company based in Boston, Mass.

Also, consider changing your locks. Many builders use construction locks during the building process and only key the permanent locks shortly before you move-in. In that case, it’s likely not necessary to change your locks, but it not a bad idea to check.

Check Up on Repairs

Most builders conduct a final walkthrough shortly before you close on your new home. This is the time when last-minute details are noted. Many will have been taken care of before you move in. If there are any open items, check with your builder so that each item is attended to. A burned-out lightbulb, a chipped electrical outlet cover, or a spot of touchup paint that’s needed are typical items that can show up during a final walkthrough.

Get to Know Your New Home

Your new home can be a bit of a mystery to you until you take the time to get to know it. That’s why most builders conduct a new home orientation. This is the time when the builder will show you the location and operation of key systems and components in your new home. The builder will likely also explain warranties and provide you with printed and/or electronic versions of operating manuals and warranties.

Buying a Manufactured Home Versus Renting

As rents continue to rise throughout the country, many renters are considering home- ownership.

Some of these potential home- buyers, however, self-disqualify themselves out of the home process because they don’t think they can afford a home or cannot save for a down payment.

There are many options out there for these home shoppers, including buying a manufactured home versus renting a home that they are not building equity in.

The benefits of buying a manufactured home can outweigh those of renting, particularly when it comes to cost. “A few years ago, we bought a manufactured home in a nice park as a second home,” says William L. Seavey, a writer and publisher in Cambria, Calif., who adds that his neighbor is a college student whose father purchased the home as an investment and to save on rent.

Advantages of Buying Manufactured Versus Renting

1. Quality and Safety

Manufactured homes are built in an indoor facility, where changes in the weather do not affect build time or materials. Building homes in a controlled setting means uniformity in the building process, which means standard quality control. In addition, manufactured homes require a third-party inspection before they leave the facility.

“Our manufactured and modular homes are built under cover in our indoor facilities, where weather fluctuations do not influence the build time or damage the home during construction,” according to a representative from Clayton Homes, the largest producer of manufactured housing in the country. “Our builders know that ‘good enough’ doesn’t cut it, so we make sure that quality and accountability are taken into consideration every step of the building process. Each and every home undergoes internal inspections that, together with a third-party inspection program that reviews the building facility at various stages of the construction process, ensures the quality of our homes is upheld.”

A quality-built home means a safe home, too. That’s why manufactured home builders adhere to the latest in building technology and standards. This means that manufactured homes can often withstand high winds due to advanced anchoring systems and perform as well as standard homes in these types of events.

2. Cost and Value

A manufactured home can help homeowners build equity, particularly if they own the land the home is located on. If a manufactured homes is permanently affixed to the land, it is considered real property, just like standard homes, giving them higher value. (If it is not, then the manufactured home is considered personal property.) Getting a home set on the land will greatly help in appreciation.

In addition, by properly maintaining a manufactured home, a homeowner can see the value of their manufactured home rise. Seavey’s first home was not a manufactured home — at the time, he tried to purchase manufactured, but the deal fell through — but he highly recommends manufactured as a suitable first home.

“Many first-time buyers should consider manufactured homes to get equity and to establish a credit history before — if ever — they move to a standard home,” he says. “In my park, homes are even rising in price and we’ve almost broken even, despite the space rents.”

3. Customization and You

Just because a manufactured home comes from a facility doesn’t mean homebuyers will lose out on the opportunity to personalize the home to fit their lifestyle and personality. Unlike with renting, these homeowners don’t have to forego painting rooms and adding stylish features.

Just like with standard homes, buyers of manufactured homes get the opportunity to choose finishes and upgrades that will make their manufactured home truly theirs. For example, some manufactured home plans include pet-friendly features such as a pet washing station in the Toscana model from SEHomes of Texas.

Builders Embrace a Digital Age

In the age of technology, everybody wants to get their hands on the latest tech. So how are today’s homebuilders keeping up? By including smart tech in their new homes as soon as they hit the market.

Today, it’s not uncommon to visit a builder and find the following tech in their model homes or sales centers:

  • High performance energy-efficiency systems that work via Wi-Fi,
  • Total home control through a centralized technological hub and
  • Virtual reality tours of homes that haven’t even been built yet.

That’s right, new homes now give you the ability to cut energy costs and control things like your door locks, lighting, thermostats and more with the tap of a finger. Here’s what today’s builders have to say about these smart home features:

Smart Performance

For Raleigh, N.C.-area builder Homes by Dickerson, a smart home is defined not just by its technology, but by its performance as well.

“In our designs, we try to include technology that adds value to the customer,” says Brant Chesson, president at Homes by Dickerson.

Which is why they offer Wi-Fi-enabled HVAC systems that have the capability of sensing the weather outside to control airflow inside the home.

“We build homes that are very tight,” explains Chesson. “Through a Wi-Fi-enabled system, we are able to mechanically control the air that goes in and out of the homes so that on a rainy day, for instance, the thermostat communicates with real-time weather reports to decide not to let the day’s humid air inside the home.”

It’s innovations such as these that led HGTV to choose Homes by Dickerson to build their annual HGTV Smart Home.

“They believe like we do that smart technology is not just audio and visual, but it also depends on the performance of the home,” Chesson says. “We were going to be able to integrate all of these things.”

Homes by Dickerson included some of the following technologies in the HGTV Smart Home:

  • A hidden mirror TV in the master bathroom,
  • A vertical spa system,
  • Remote-controlled skylights,
  • Automatic window shades,
  • Clare Controls mood system and
  • Smart locks and garage door.

Tips to buying a new home and wondering

You’re thinking about buying a new home and wondering if you should go big or small. Perhaps your budget prevents you from going too big. But just how much home is enough?

The median size of a completed single-family house in 2014 was 2,453 square feet according to the U.S. Census Bureau. By contrast, you may have heard about so-called tiny houses, defined as 400 square feet or less — for those very serious about living a simple, frugal life.

You don’t have to go tiny, but a smaller than average home might fit the bill. Sarah Susanka, architect and well-known author of the Not So Big House book series, describes a “Not So Big House” as one not as big as most people are building, focused on quality rather than quantity.

Her book series came about as she was working as a residential architect.

“People would come into my office asking first of all for a size,” she says. “I want 3,000 square feet … I looked at their budget and I knew if they wanted 3,000 square feet, it would be absolutely bare bones, or there would be absolutely no possibility of building their house.”

She wanted to help clients use their money more effectively, tailoring their home not only to their budget but their lifestyle. She says homes should scale to the way occupants actually live and what appeals to them aesthetically and sustainably — not just in terms of materials or how much energy it uses, but also in desirableness to maintain.

“If something isn’t beautiful, people won’t tend to look after it,” Susanka says. “You could have a house that is ‘green’ but if it’s not beautiful, I would contend that it’s not sustainable.”

It’s been 10 years since Hurricane Katrina devastated the Gulf Coast. Marianne Cusato, designer of the so-called Katrina Cottages, admits to being inspired by Susanka’s Not So Big House concept.

“The initial idea of the cottage was something that would have dignity,” Cusato says. “Why [live in] the bottom of the barrel? Why not something that’s loveable and livable?”

Congress appropriated $400 million for an alternative emergency housing program based on Cusato’s award-winning, 308 square foot Katrina Cottage design (designs range up to 1,807 square feet). These small, sturdy homes could be delivered at the cost of a FEMA trailer, and many were used in Louisiana and Mississippi after the 2005 hurricane. Some models have options allowing expansion over time, so many of these cottages are still in use today.

Saying it’s hard enough to afford a house under the best circumstances, Cusato’s not surprised Katrina Cottages have been sought by those not in need of emergency or disaster housing. In her book, The Just Right Home, she addresses figuring out how you want to live, not just where.

“It’s not location, location, location,” Cusato says. “It’s proximity, proximity, proximity … where that place is in connection with the things you need and want to do in a day. It defines your life. Is family dinner important? If so, consider where you work and where your spouse works, and where your children’s activities are.”

Rob and Linda Mahan say they spent much of their 35-year marriage talking about building a small home with quality craftsmanship designed for how they lived, not, in Rob’s words, “how tradition dictates.”

A Home with an Income Suite

Having an income suite in your home can be a great way to help offset your monthly mortgage payment or other home-related costs.

And who doesn’t like that?

But building an income suite is a little more involved than just renting out that extra bedroom on Airbnb for a few weeks at a time. 

A true income suite is geared more toward long-term renters, who can provide steadier cash flow. These secondary suites are often transformed basements, an add-on or a separate wing or floor of the house, but they can also be a separate structure, or accessory dwelling unit, such as a detached garage.

In Los Angeles, with high housing costs and a need for affordable rental options, it’s no surprise that income suites have become a popular way to help homeowners subsidize a mortgage and add value to their property at the same time. 

“A very high percentage of people try and create income suites here in West L.A. — garages being the most common,” says Jesse Fowler, president of Tellus Design + Build. 

But before you decide that an income suite is the way to go, your first step should be to check with your municipal government regarding local permitting and regulations for long- and short-term rentals and whether your neighborhood is zoned accordingly.

Short-term rentals, in particular, may be restricted or even outlawed. A little due diligence up front can save you some big headaches down the road.

Built-in Suite

Some new-construction homes may offer floor plans with options for a guest suite or casita — or, of course, a basement — that could become a future income suite with some renovation. However, in Edmonton, Alberta, Canada, area homebuilders are incorporating income suites, or secondary suites, into various floor plans, thanks to a city ordinance that has made them legal. A few years ago, the city decided to make income suites legal to help deal with the number of existing suites that were considered illegal due to lack of proper permits, code violations or zoning restrictions.

Edmonton-based Parkwood Master Builder is one such builder that offers a secondary suite floor plan. Its Avalon III home includes a 715 sq. ft. basement suite with a separate exterior entry. The home is required, among other things, to have two furnaces and two hot water heaters to accommodate the extra suite, as well as fire-rated drywall and windows in each bedroom large enough to provide emergency egress.

One of the benefits of choosing a new-construction home with an income suite is that the builder handles all of the permitting, which is a tedious process no matter where you live. 

Dream Home Later in Life

Most homebuyers have a “dream house” that includes everything they want, whether it’s a new kitchen, open floor plan, lots of bedrooms and bathrooms or all that and more.

So, how can you buy your dream house, whether you are in your 40s, 50s or 60s?

The answer might be as simple as deciding to go for it, says Tom Page, vice president of iStar, a community developer in Richmond, Va., and general manager of Magnolia Green, a residential community in Moseley, Va.

“When people are buying in their 20s and 30s, there’s a dream house that they’d like, but they can’t afford it,” Page says. “In their 40s and 50s, they’ve got the money, and they say, ‘Let’s go buy that nice house.’“

Better, Newer, Smaller

That said, Priscilla Schumacher, director of sales and marketing at Edward R. James Cos, a homebuilder headquartered in Glenview, Ill., cautions against the idea of a “dream home” because it’s not always what people assume it is.

She says some buyers move out of a very costly or large residence into a dream home that better fits their needs in terms of design, finishes and amenities. The new home might offer an updated kitchen, open living room, main-level master bedroom, new flooring, carpets and counters and community services like landscape maintenance and snow removal.

“They’re looking for the home to be their way, (even though) they definitely still have the kids in mind for when they come to visit,” Schumacher says. “Instead of a garage filled with bikes and hockey equipment, it’s just enough room for two very nice vehicles.”

The trend is evident in the data. According to the U.S. Census Bureau, newly built houses grew steadily in size from 1,660 square feet, on average, in 1973 to an average 2,521 square feet in 2007. The trend line then flattened out even after the U.S. economic recovery began. The average new home size of 2,687 square feet, recorded in 2015, could be a sweet spot for many of today’s buyers.

Saying “No” to Remodeling

The alternative to buying your dream home is trying to remodel your existing house to be what you really want. Page says that approach doesn’t appeal to many current homeowners.

“A lot of times, they have a 20-year-old home that just starts to feel old,” he says. “Rather than upgrading it, a lot of people take the easier route and buy something new.”

Remodeling industry studies have shown year after year that very few remodeling projects recoup their full value at the time of resale. Instead, most homeowners take a loss on their improvements.

Relocating Bedrooms

Brett Whitmore, co-owner of Whitmore Homes, a family-owned custom homebuilder in Grand Rapids, Mich., says his company has hit on a floor plan that works well for today’s “dream home” buyers.

Rather than put three or four bedrooms on a ranch-style home’s first floor, Whitmore puts what he describes as “a nice big master suite” along with a “nice-sized living room and nice open kitchen” on the main floor. The basement is turned into a finished lower-level walk-out that’s equipped as separate living quarters.

“You can afford that nice big-sized kitchen, that fireplace in your master bedroom, those nicer features you’ve always dreamed of because the footprint of your house is slightly smaller,” Whitmore says. “Having the open concept and removing the extra bedrooms on the main floor opens up more space.”