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Zeller's Blog

By Doug & Bud Zeller | Agent in Placerville, CA
  • Could Millennials Kill Off the McMansion?

    Posted Under: Market Conditions in South Lake Tahoe, Property Q&A in South Lake Tahoe  |  September 16, 2014 3:29 PM  |  21 views  |  No comments

    During the recession, the average new single-family home was 2,135 square feet. However, by 2013, the McMansion was back, with square footage blooming to 2,598 square feet, as more builders looked to cater to luxury home buyers.

    But some analysts are questioning whether it’s the millennial generation that will reverse this trend, a generation that has already grown accustomed to more cramped corridors. After all, apartment sizes have been shrinking. In 2000, the average newly built apartment was about 1,003 square feet, but by 2010, the average had shrunk to 976 square feet, according to Axiometrics, a research firm. Also,micro-apartments – which are as little as 250 square feet – are growing in popularity, too.

    Millennials, through housing surveys, have already shown a preference for walkable convenience with smaller living spaces, and many builders are starting to question how that will influence the design of future homes. Many renters have already shown they are willing to sacrifice space in order to be in a certain location or to have more amenities outside the home.

    “They’re willing to live in smaller spaces because the community areas of the assets that we’re building now are so sophisticated,” Bradley Cribbins, COO and executive vice president of Alliance Residential, based in Phoenix, told BUILDER. “They have beautiful common areas where you can collaborate with other folks.”

    But not all housing analysts believe that millennials living in smaller apartments will translate into a desire for smaller homes when they’re ready for home ownership one day. As their priorities shift, millennials will eventually want more yard, increased space, and a good school system for their children in the suburbs over a cramped place in the city, some builders and analysts say.

    “They don’t really want what mom and dad have until they get married,” says Nick Lehnert, executive director at the architectural firm KTGY, based in Santa Monica, Calif. “Then all of a sudden things start to revert. They start getting realistic about what they need for the children and what they need for themselves. [Right now,] Gen Y is used to living in small spaces or with roommates because that’s all they can afford.”

    However, some architects and builders are betting that millennials’ apartment living will influence their single-family tastes for more efficient designs over the McMansions their parents' generation preferred and are already working on designs to cater to this age group’s changing desires.

    Source: “Inner Space: Is the McMansion on its Way Out?” BUILDER Online (Sept. 2, 2014)

  • Survey: Majority of Home Owners Planning to Renovate

    Sixty-seven percent of consumers say they're planning a home renovation within the next six months, according to realtor.com®'s Home Improvement Survey of more than 1,500 home owners. They're planning to spend more money on their renovations than last year, the survey found.

    The most common budget range for home improvements was between $2,001 and $5,000. Eighteen percent of respondents who say they plan to renovate before the end of the year are budgeting $10,000 to $20,000 on their renovation.

    "With 32 percent of consumers planning to spend money on improving the look and feel of their homes, home buyers should think about purchasing homes that require renovations," says Barbara O'Connor, chief marketing officer for Move Inc., the operator of realtor.com. "By considering these kinds of homes, buyers open themselves up to more affordable options and the ability to renovate their homes to fit their specific needs and tastes."

    Respondents indicated that these are the most popular areas of the home to renovate: the kitchen (61%), bathrooms (59%), backyards or patios (33%), and the exterior of the home (32%).

    Additional survey findings at: Source  Move Inc.

  • Energy Cost Disclosure Could Mean Faster Sale?

    Posted Under: Home Buying in South Lake Tahoe, Home Selling in South Lake Tahoe  |  May 4, 2014 3:52 PM  |  366 views  |  No comments

    A preliminary analysis of Chicago single-family homes suggests that real estate listings that include energy costs spend less time on the market and have a higher closing rate.

    In July 2013, Chicago became the first municipality in the nation to include the disclosure of residential energy costs (gas and electric) when a home is listed for sale on the MLS. Real estate professionals can access an energy cost disclosure report for the property to provide to prospective buyers.

    Elevate Energy reviewed 18,605 single-family homes listed between July 1, 2013 and Feb. 19, 2014 on Midwest Real Estate Data, the MLS serving Chicago. It found that 10 percent of the homes disclosed energy costs. Homes that did include disclosure of energy costs spent less time on the market, the analysis found.

    For example, in Lakeview, homes that disclosed energy costs spent a median of 43 days on the market compared to a median of 63 days on the market for homes that did not disclose energy costs. Also, homes that disclosed energy costs had higher closing rates: 66 percent of homes that disclosed energy costs closed, compared to 53 percent for homes that did not disclose.

    Of course, home owners whose property is more energy efficient are more likely to highlight energy cost savings, so the study's findings may be due to an already-documented demand for greener homes.

    Source: Midwest Real Estate Data

  • The Town With the Highest Home Ownership Rate

    Posted Under: Home Ownership in South Lake Tahoe  |  March 18, 2014 8:07 PM  |  277 views  |  No comments

    Barnstable Town, Mass., has the highest home ownership rate in the country, at 81.6 percent. The national home ownership rate is 64.7 percent.

    The National Association of Home Builders, using housing data from the 2012 American Community Survey, uncovered the 10 metro areas with the highest home ownership rates in the country.

    “As one might expect, the home ownership rate is linked to affordability,” according to NAHB’s blog. “In general, home ownership rates are higher when homes are more affordable. Eight of the top ten metropolitan areas have median home values below the national median home value of $171,900.”

    The following metro areas have the highest home ownership rates in the nation, according to NAHB.

    1. Barnstable Town, Mass.: 81.6%
    2. Punta Gorda, Fla.: 79.8%
    3. Nassau-Suffolk, N.Y.; New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.: 79.6%
    4. Holland-Grand Haven, Mich.: 78.3%
    5. Bay City, Mich.: 77.5%
    6. Monroe, Mich.: 77.1%
    7. Houma-Bayou Cane-Thibodaux, La.: 76.4%
    8. Idaho Falls, Idaho: 76.2%
    9. Palm Coast, Fla.: 75.9%
    10. Johnstown, Pa.: 75.8%

    Source: “Top 10 Metro Areas: Home Ownership Rates,” NAHB’s Eye on Housing (March 13, 2014)

  • Bitcoin More Than a Fad for Real Estate?

    Posted Under: Financing in South Lake Tahoe  |  January 18, 2014 7:15 PM  |  257 views  |  No comments

    Bitcoin has been in real estate news a lot lately. Is it a flash in the pan, or is it something you should consider for your business?

    “We’re way past the fad stage,” says Alan Silbert, founder and CEO of BitPremier, a website that lists luxury products for sale using the digital currency and acts as an intermediary for transactions. Silbert addressed a group of real estate professionals and others at Inman Connect in New York on Thursday.

    BOND New York recently announced it will be using bitcoin, and Silbert predicts that more businesses are going in that direction. Not only are these companies getting a fair amount of media attention, but Silbert says accepting bitcoin could also bring to a brokerage clients who are younger and more tech-savvy and who have above-average wealth.

    “There’s a lot of press value,” he says, but “you’re opening yourself up to another buyer base.”

    Digital currencies are not backed by any central banking or governmental authority, which makes many nervous. But Silbert says the technology behind bitcoin is supported by “military-grade cryptography,” and he expects the government to get involved this year.

    “The regulators are feeling bitcoin out,” Silbert says. He adds that the U.S. Senate held a largely positive hearing on bitcoin last year, and he predicts “the IRS will probably come out with some guidance this year.”

    So how do you go about converting bitcoins to “real” money? Silbert says there are companies out there that can help you minimize the risk.

    “The scariest thing right now is the volatility,” he says. “Bitpay and Coinbase can exchange bitcoins to your local currency on a daily basis.”

    Even if you’re not ready to start accepting bitcoin, you owe it to your business to know about it.

    “Virtual currencies are here to stay,” he says. “At the absolute least, I would implore you to educate yourself [about] bitcoin, because you’re going to have customers wanting to use it.”

    Source: Meg White, REALTOR® Magazine

  • What Ranks High with Luxury Homebuyers

    Posted Under: Market Conditions in South Lake Tahoe, Home Buying in South Lake Tahoe, Home Selling in South Lake Tahoe  |  September 11, 2013 11:03 AM  |  445 views  |  1 comment

    Luxury home owners and buyers place a high value on real estate, according to a new survey conducted by Better Homes and Gardens of 500 luxury home buyers.

    In fact, the survey finds that 75 percent of luxury home buyers believe home ownership is a sounder investment than the stock market. What’s more, 57 percent of luxury home owners say home ownership is a bigger indicator of success than their job or title.

    “The luxury consumer is considered a trendsetter in most industries, and to see the strong connection this consumer has with ‘home’ is very significant as we look at the real estate market as a whole,” says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC. “The luxury home buyer has high standards and invests the money, the time, and the commitment to making their home fit their needs and reflect who they are. It’s remarkable that they do this so well that nearly all -- 93 percent -- believe their house is the best one on their block.” 

    The survey revealed some of the following insights into the luxury home buyer and owner: 

    • They desire multiple homes: Fifty-three percent say they prefer owning multiple “lifestyle” homes to support their lifestyle activities, such as skiing or attending the theatre. Fifty-eight percent of the luxury home buyers surveyed say they already owned multiple homes to support their lifestyle activities. 
    • They’re willing to sacrifice square footage for luxurious amenities: Sixty-percent of luxury home buyers surveyed said they would rather have as many upgrades as they can afford in their home rather than greater square footage. Ninety-four percent of those surveyed would be willing to give up 1,000 square feet of living space in their next home in order to get the amenities they most desire, such as living in a better neighborhood, living in a house with “character,” more land, access to dining and entertainment, and a shorter commute. 
    • They want a high-tech home. Sixty-six percent expressed a stronger desire for having a “smart” home than a “green” home. Eighty-seven percent said they would not even consider purchasing a home that wasn’t tech-friendly. 
    • They also value their outdoor spaces. Luxury homebuyers also placed a high value on outdoor amenities as must-have essentials in a home. For example, they expressed a big interest in having a garden oasis, outdoor fireplace or firepit, and a separate guest house outside of the main home. 
    • They turn to their real estate agent for guidance and greater insights. The luxury home buyer is looking for their real estate agent to provide them insight into the neighborhood lifestyle (65%), advance new listing notices (64%), advice on housing trends (55%), and support at a personal level throughout the buying process (53%), the survey finds. 

    Source: “Luxury Home Owners Believe Home Ownership is a More Sound Investment Than the Stock Market, Survey,” RISMedia (Sept. 10, 2013)

  • Will Rising Mortgage Rates Cool the Market?

    A big jump in mortgage rates over the past two months may start to cool the rapid rise of home prices in the second half of the year, The Wall Street Journal reports. 

    Mortgage rates have shot up from lows of 3.59 percent in the beginning of May, to 4.58 percent during the last week of June, according to the Mortgage Bankers Association. Rates are at their highest levels in two years. 

    “A rule of thumb holds that every one percentage point increase in interest rates reduces affordability by 10 percent, so the recent move in rates just made homes about 10 percent more expensive to buyers who need to finance their purchase,” The Wall Street Journal reports.

    Still, economists say mortgage rates at 4.5 percent or 5 percent is still very affordable by historical standards. Merrill Lynch analysts say that home prices would have to rise by 20 percent or mortgage rates would have to soar to around 6 percent to chip away at housing’s affordability. 

    Some economists see rising mortgage rates as a positive. John Burns, chief executive of John Burns Real Estate Consulting, says that rising rates produce more sustainable price increases. “I don’t think it’s the end of price increases, but I think they’re going to moderate significantly,” Burns told The Wall Street Journal. 

    Source: “Why Home-Price Gains Will Slow Amid Higher Mortgage Rates,” The Wall Street Journal (July 8, 2013)

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