MIxed-use Developments

Developers are hoping that a new FHA change that is friendlier toward allowing mixed-use developments will help to revive condo sales, The New York Times reports. In September, the FHA approved a rule change that permits government-insured mortgages for condos in mixed-use buildings containing commercial of up to 35 percent. That's up from a previous 25 percent limit. But the FHA says it may even be willing to grant exceptions to projects that have as much as half of their space designated as commercial. “The new FHA ruling strengthens the attractiveness of condos as an option, because it increases the field of potential condo buyers,” Katharine Kelly, director of such a development in Atlanta, told The New York Times. The FHA insures mortgages and offers programs for first-time home buyers, which include low down payment requirements such as of 3.5 percent. The move has been viewed by some in the industry as a big step in helping to spread the development of mixed-use developments that both younger and older buyers have shown recent preferences for. “We’ve learned that this mixing of development makes for a better urban design, so towns and cities are designing codes to encourage it, and the market is showing interest,” says John K. McIlwain, a senior resident fellow at the Urban Land Institute. “We’re going to see a lot more mixed use, whether it’s in the urban central city or suburban town centers.” Also among some of its recent changes effective this September, the FHA has recently increased the number of units that investors can own in a development to 50 percent -- that’s compared to 10 percent previously. However, the rest of the building must be owner-occupied. Source: The New York Times

Homes on the Market

The number of U.S. homes that could soon come onto the market fell to the lowest in more than three years as of July as distressed sales offset new delinquencies in an encouraging sign for the housing market, a data analyst firm said. The pending supply of homes, also known as shadow inventory, fell to 2.3 million units as of the end of July, down 10.2 percent from 2.6 million units a year ago and at the same level as March 2009, CoreLogic said. The July data is the most recent available. Shadow inventory includes the number of properties that are seriously delinquent or behind with loan payments, in foreclosure or held by lenders and servicers but not currently listed on the market. At the end of July it was equal to about six months' supply, CoreLogic said. While many economists believe the housing market has finally turned a corner as prices have stabilized, the sector still faces many challenges including the swollen pipeline of foreclosures that need to be absorbed by the market. A decline in shadow inventory should help the nascent recovery as fewer properties coming onto the market means less downward pressure on prices. "Broadly speaking, the shadow inventory continued to shrink in July," Anand Nallathambi, chief executive of CoreLogic said in a statement. "This is yet another hopeful sign that the housing market is slowly healing."
Source: Reuters (via newsletterproonline.com)

Metropolitan and Micropolitan Population Change

For many of the nation’s largest cities, downtown areas experienced double-digit increases in population growth rates between 2000 and 2010, more than double the rate of other areas, the Census Bureau reported. The report, Patterns of Metropolitan and Micropolitan Population Change: 2000 to 2010, said metro areas with 5 million or more people experienced double-digit population growth rates within their downtown areas, defined as within a two-mile radius of the largest city's city hall, more than double the rate of these areas overall. Chicago saw the largest numeric gain in its downtown area, with a net increase of 48,000 residents over the 10-year period. New York, Philadelphia, San Francisco and Washington, D.C., also posted large population increases close to city hall. Census said the U.S. population grew by 27.3 million between 2000 and 2010, an increase of 9.7 percent. Nearly all population growth occurred in metro areas (25.2 million). Source: Mortgage Bankers Association

Fed Bond-buying Programs

With the Federal Reserve buying billions of dollars worth of mortgage-backed securities, you might think that rates on home loans are poised to fall even lower than the current rock-bottom levels. Maybe you should wait on that refinancing, you wonder, or delay purchasing a house until the market is even more favorable. Not so fast. The Fed’s purchase program certainly is expected to keep rates low for some time, but there’s no reason to think rates will fall much further, according to economists. In fact, looking at the past two Fed bond-buying programs, the market felt a stronger impact in the weeks immediately following the announcement — less so as time went by. Investors face a long stretch ahead of low returns from such traditional financial instruments as bank deposits and bonds. The Fed’s hope is that they’ll be pushed into buying real estate and that this will further lift home prices, said Joseph Kalish, chief global macro strategist for Ned Davis Research, based in Venice, Fla. “You’re really coercing investors who are holding cash to get into something else,” Kalish said. “What Bernanke is hoping for is that some of that money ends up in real estate. People are fed up with earning zero percent at the bank. They’re buying up these foreclosed properties.” Analysis such as Liz Ann Sonders, chief investment strategist for San Francisco-based Charles Schwab & Co, have cautioned that individual homeowners shouldn’t procrastinate on refinancing or purchase decisions just because rates should stay low for some time. Other factors, both personal finances and life stage, should be given greater weight. “When rates move, they can move rapidly and they don’t ring a bell when they’re about to move,” economist Bob Walters points out.
Source: The Washington Post (Via newsletterproonline.com)

Home Remodeling

Home remodeling is expected to have its best year since 2006, according to Harvard University's Joint Center for Housing Studies. The biggest focus areas of home owners in remodeling: Mid-size kitchen and bath projects, maintenance improvements, and energy efficiency upgrades. But when it comes to remodeling, home owners are much more concerned with the price, and therefore, are making their renovation projects smaller and more focused nowadays as they search for ways to curtail costs, USA Today reports. "Before it was curb appeal, showiness and keeping up with the Joneses," Duo Dickinson, author of Staying Put: Remodel Your House to Get the Home You Want (Taunton Press), told USA Today. But now more home owners want their homes to reflect who they are. "The house is the most direct mirror of your personal values. When people renovate to change their lives, they waste money." When they renovate to improve how they live, they have the opportunity to benefit more, he says. So what do home owners have their eye on remodeling? According to remodeling experts, more home owners are concentrating on some of the following:

• Outdoor spaces, such as adding decks or porches or larger windows to more enjoy the outside of their homes.
• “Livable kitchens,” in which kitchens are becoming more multi-purpose and can serve as not a place just for cooking but also recharging laptops and a living room with comfortable seating.
• Open floor plans, as home owners seek ways to connect living rooms, kitchens, dining rooms, and even the outdoors to bring about more light and openness in their homes.
• Smaller master baths, such as spa tubs being replaced with larger showers.
• Energy efficiency, such as upgrades with windows, insulation, and doors to help curb utility costs.

Source: USA Today (Via NewsletterPro)

Going Green

Remodeling and construction of single-family homes to make them more green continues to grow as more attention is placed on the benefits of going green for energy efficiency savings and better indoor quality, a new study shows. In the construction market, the green home market share has grown to 17 percent in 2011. That percentage is expected to rise to 29 percent to 38 percent by 2016, according to a new report by McGraw-Hill Construction, “SmartMarket Report: New and Remodeled Green Homes: Transforming the Residential Market.” According to the report, the two key forces driving the green growth: Green homes are often viewed as higher quality and can potentially save consumers money on utility costs. "In the current residential market, there is an enormous need to differentiate your homes for consumers," says Harvey Bernstein, vice president of Industry Insights and Alliances at McGraw-Hill Construction. "When builders are able to offer homes that not only are green but also offer the combination of higher quality and better value, they have a major competitive edge over those building traditional homes." In the past, builders have cited higher upfront costs as a roadblock to building green. However, the survey found that a much lower percentage of builders view that as an obstacle now than in 2008.
Source: National Association of Home Builders (via OriginationPro)

Growing into a Home

More first-time home shoppers say they want a house they can “grow into” not a home they can quickly grow out of. With big housing bargains and low rates, some first-time buyers have decided to go big with their home purchase and sidestep the traditional smaller “starter house.” A growing number of real estate professionals are reporting that childless, twenty-somethings who have strong incomes are taking advantage of housing deals and looking for their dream house now, rather than wait until later. A Minneapolis couple purchased a 3,000-square-foot-home as their first home. "The more starter homes we saw, the less impressed we became. .Since we knew we could easily afford to buy more than we were initially looking to spend, the choice was quite simple," Joseph Simons told the Minneapolis Star-Tribune. "Why not buy a forever home with everything we want?" Indeed, more buyers are purchasing a home with intentions to live in it longer than they once did. On average, buyers now expect to stay in their house 15 years compared with 10 years in 2010, says Walter Maloney, spokesman for the National Association of Realtors®. Steve Howe, a sales agent for RE/MAX Results in the Minneapolis area, says one big driver for first-time home buyers to go big on their first home is low rates. Howe says first-time buyers worry that rates — the cost of borrowing for a home purchase — will never be this low again so they want to take advantage while they can. "If they can lock in a $300,000 or $350,000 loan at 3.5 percent, that's as good as gold," Howe says.
Source: Star Tribune