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Bud Zeller's Blog

By Bud Zeller | Broker in Placerville, CA
  • 20% of Households Are Throwing Away $11,500.?

    Posted Under: Financing in Placer County, Home Ownership in Placer County  |  September 16, 2014 3:42 PM  |  42 views  |  No comments

    About 20 percent of households who would benefit from refinancing are not doing it — and they could be losing out on lessening their mortgage payments by thousands of dollars over the life of the loan, according to a new report from the National Bureau of Economic Research.

    In analyzing a large random sample of outstanding mortgages from December 2010, researchers found that the median household could save $160 per month over the remaining life of the loan, amounting to a total savings of about $11,500.

    "Despite the large stakes, anecdotal evidence suggests that many households may fail to refinance when they otherwise should," according to the report. "Failing to refinance is puzzling due to the large financial incentives involved."

    The report found that borrowers may fail to refinance because they are unable to calculate the full financial benefit to them, they fail to see the benefits over time, or the high amount of upfront costs may deter them.

    "Our results suggest the presence of information barriers regarding the potential benefits and costs of refinancing," according to the NBER report. "Expanding and developing partnerships with certified housing counseling agencies to offer more targeted and in-depth workshops and counseling surrounding the refinancing decision is a potential direction for policy to alleviate these barriers for the population most in need of financial education."

    Source: “Here’s Why Some Home Owners Throw Away $11,500 a Year on Mortgage Payments,” HousingWire (Sept. 10, 2014)

  • More Singles Than Ever: How It Affects Real Estate

    Posted Under: Market Conditions in Sacramento, Home Ownership in Sacramento  |  September 16, 2014 3:36 PM  |  13 views  |  No comments

    In the age of "selfies," the majority of adults are sticking to themselves. Single Americans now make up more than half of the adult population, the first time the number of singles has passed the 50 percent mark since the government began tracking such data in 1976.

    About 124.6 million Americans indicated they were single in August; 50.2 percent were age 16 or older, according to new data from the Bureau of Labor Statistics. The percentage has been gradually trending upward since the beginning of 2013.

    The rise of single households has "implications for our economy, society, and politics," writes Edward Yardeni, president of Yardeni Research Inc., in a report called "Selfies." He called the proportion of singles today "remarkable."

    What are the implications for real estate? Singles, particularly younger professionals, are more likely to rent than own a home. They are less likely to have children, and the growth in single households likely will exaggerate income inequality, Yardeni notes.

    The number of never-married adult Americans has been on the rise, too, increasing to 30.4 percent from 22.1 percent in 1976. The number of divorced, separated, or widowed adults also has risen up to 19.8 percent from 15.3 percent.

    Some real estate analysts are expecting an increase in singles heading into home ownership in the coming years. For example, single women make up the second largest segment of home purchases, with one out of every five homes purchased by a single woman, according to National Association of REALTORS® data. More than 25 million single women over the age of 45 — who may be either divorced, widowed, or never married — are also making up a growing number of home owners, real estate professionals report.

    Some builders are even catering to this growing segment, reportedly adding two master bedrooms to appeal to the 40 percent of single women who choose to have non-romantic roommates, according to AARP surveys. 

    Source: “Is Everybody Single? More Than Half the U.S. Now, Up From 37% in ’76,” Bloomberg News (Sept. 8, 2014) and REALTOR® Magazine Daily News

  • The Wish List of Your Future Buyers: Gen Z

    Posted Under: Home Buying in Pollock Pines, Home Ownership in Pollock Pines  |  September 12, 2014 2:40 PM  |  37 views  |  No comments

    Many within today's generation of teens, 21 million strong, say they’ll be willing to give up modern luxuries for a more mainstream view of the American dream of homeownership, according to a new study from Better Homes and Gardens Real Estate, which reveals the home ownership wish lists of the children ages 13 to 17, part of Generation Z.

    Eighty-nine percent of Gen Z teens surveyed say owning a home is part of what they believe the American dream is, followed by graduating from college (78%); getting married (71%); and having children (68%).

    They’re optimistic that they’ll become home owners one day, too. Ninety-seven percent say they’ll own a home one day, and they say they’d even be willing to make some unusual sacrifices in order to put them on the path to home ownership. For example, 53 percent say they’d be willing to give up social media for a year or would be willing to do twice as much homework every night in order to become a home owner one day. Forty-two percent would go to school seven days a week, and 39 percent would even be willing to take their mom or dad to their prom if it meant they could be a home owner one day, the survey showed.

    Source: Better Homes and Gardens Real Estate

  • Why the Housing Recovery Is Falling Short

    Posted Under: Market Conditions in Sacramento, Property Q&A in Sacramento, Home Ownership in Sacramento  |  September 12, 2014 2:25 PM  |  49 views  |  2 comments
    Housing activity likely will continue to pull back this year, mostly due to a sluggish job market, but a modest recovery will likely resume in 2015, according to the results of Fannie Mae's August 2014 National Housing Survey.

    "The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing," says Doug Duncan, Fannie Mae's chief economist. "The deterioration in consumer attitudes about the current home-buying environment reflects a shift away from record home-purchase affordability without enough momentum in consumer personal financial sentiment to compensate for it. To date, this year's labor market strength has not translated into sufficient income gains to inspire confidence among consumers to purchase a home, even in the current favorable interest-rate environment."

    Still, 42 percent of respondents surveyed continue to believe that home prices will go up in the next 12 months. However, the average 12-month home-price-change expectation dropped to 2.1 percent, Fannie Mae's survey shows.

    The majority of Americans also believe that rental prices will continue to rise. Fifty-three percent of respondents say they expect rental prices to go up in the next 12 months, with the average 12-month rental-price-change expectation rising to 4.1 percent, the survey shows.

    Households continue to be bearish on their finances and the direction of the economy. The share of respondents who say their household income is significantly higher than it was 12 months ago fell by 5 percentage points to 23 percent in August. What's more, 36 percent say their household expenses are significantly higher than they were 12 months ago. However, 44 percent of respondents surveyed say they do expect their financial situation to improve over the next 12 months.

    Source: Fannie Mae

  • Why It Pays to Be a Home Owner

    Posted Under: Rental Basics in Placerville, Rent vs Buy in Placerville, Home Ownership in Placerville  |  September 9, 2014 4:14 PM  |  68 views  |  No comments

    Home owners are building net worth at a pace that is up to quadruple that of a renter.

    In the past 15 years, the net worth of the typical home owner has ranged between 31 and 46 times that of the net worth of the typical renter, according to the Federal Reserve's Survey of Consumer Finances, which is based on 2013 data.

    On average, home owners had nearly $200,000 in net worth compared to the average $5,000 net worth of renters, according to the survey.

    "Home owner equity is a substantial component of home owner wealth," Danielle Hale, research economist at the National Association of REALTORS®, writes on the association's Economists' Outlook blog.

    Source: “Net Worth of Home Owners vs. Renters,” National Association of REALTORS® Economists’ Outlook Blog (Sept. 8, 2014)

  • 2nd Quarter Housing Affordability Declines Statewide

    Posted Under: Market Conditions in South Lake Tahoe, Financing in South Lake Tahoe, Home Ownership in South Lake Tahoe  |  September 9, 2014 1:59 PM  |  17 views  |  No comments
    Lower interest rates in the second quarter of 2014 failed to offset continued home price increases, lowering housing affordability statewide and in 19 of 26 counties in California. 

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  • California Home Sales & Prices Improve

    Posted Under: Market Conditions in Amador County, Home Ownership in Amador County  |  September 9, 2014 1:57 PM  |  17 views  |  No comments
    California home sales posted higher for the second straight month, and while the statewide median home price rose from the previous month as well as a year ago, the pace of appreciation continued to slow. 


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