Home features that boost the selling price and number of days on the market.
In a study done by Zillow, Home Features that Sell, 4.6 million home sales across the country were analyzed in 2017 and 2018 for sales price and number of days listed on Zillow. The analysis stated that the for-sale listings mentioning certain home features sold for more and were on the market less time than those homes that did not list these certain features.
What are these features you ask? Well having luxurious items such as a steam oven or shower, heated floors, or a wine cellar can boost your home sales price up to 34 percent more. The Director of Economic Research at Zillow, Skylar Olsen, notes that “If you have these features, flaunt them.”
These types of luxurious features that are mentioned in property listings are appealing to first-home buyers and sell for more than expected. This type of trend seems to reflect the type of lifestyle that a millennial homeowner or a young family are trying to live by or achieve, according to Zillow.
Another luxurious home feature that bumped up pricing on a home and was included on the listing was an outdoor kitchen. A home with this feature sold for 24.5 percent more than a listing of a home that did not. Outdoor dining goes well with this feature, a pergola. When mentioned in a listing, the home sold 11 days faster and for 7.2 percent more money. Other items that gave homes a boost in prices and less days on the market are waterfall countertops, open shelving, exposed brick, and subway tile.
Zillow does point out that they are not “saying you should build or add these things to your home just to help it sell. However, listings that mention these features do sell for more—sometimes a lot more.”
At the National Building Museum in Washington, D.C., Fannie Mae exhibited “Making Room: Housing for A Changing America” as it highlighted many of the issues that face today’s shortage of quality affordable housing. In a blog by Maria Evans, VP for Sustainable Communities at Fannie Mae, she notes that “When affordable housing is part of a mixed-income community with good schools, health and wellness opportunities, and good-paying jobs, it is much easier for those communities to address longstanding disparities in educational or health outcomes of low-income residents.”
It was noted at the exhibit that the housing industry has failed to keep up with the ever changing demographics. The demographics show that 11.63 percent of the total housing stock was for single adults who preferred one bedroom homes. Three and four bedroom homes made up 39.82 and 16.66 percent of the housing stock with two bedrooms composing 26.54 percent.
This thought provoking idea is now one of the many projects that Fannie Mae has launched under the Sustainable Communities Innovative Challenge. Under this challenge, Fannie Mae makes a $10 million commitment to generate affordable housing solutions to sustainable communities that provide residents integrated opportunities for employment, health and wellness, and education. Anyone inside or outside the housing industry can submit their ideas and innovations. One example that has come out of this challenge is the West Denver Renaissance Collaborative that came up with the idea of an accessory dwelling unit(ADU) program where a detached residence approximately 450-870 square feet is placed in the backyard of primary homes and can serve as a rental unit, creating a new source of income for the homeowner. This ADU not only raises the property value but also adds to the affordable housing supply that is very much needed.
Are you ready for the Silver Tsunami? Wikipedia describes it as a metaphor used to describe population aging. The silver tsunami metaphor has been used in popular media and in scholarly literature to refer to the late-twentieth century demographic phenomenon of population aging in major media platforms including The Economist, Forbes.com, and multiple news outlets.
In real estate, we see that the millennials are the demographic group that is trending now for home purchases, but millions of baby boomers aka Silver Tsunami could seek to downsize in the coming years as they approach their 60s and 70s. It is expected that by the year 2050, the seniors 65 and older will make up nearly 20 percent of the U.S. population compared to the 15 percent today. Not only will the demand for senior living increase, but the style and manner will as well. With the large increase in this demographic market, you can expect to see senior living communities popping up everywhere, especially in Florida. These types of communities are expected to rise in in both rural and urban settings alike.
Today’s baby boomers, now the Silver Tsunami to come, look at life a little differently in regards to aging. They expect accessibility and convenience with personalized care and amenities. These future seniors reflect a change in the way our older generation currently resides. They are active, empowering, and believe that senior living should not be institutional.
Then we have the seniors of today that were born between 1931 and 1947, who are staying in their homes longer and aging in place, the result being higher homeownership rates than the previous group of seniors. It is estimated that 1.6 million existing homes were held off the market in 2018 due to the aging in place occurring. The trend of these seniors aging in place is only expected to grow as the number of seniors increase with the impending Silver Tsunami. To put this in perspective, the 1.6 million existing homes that are being held off the market due to aging in place, the Urban Institute estimates that 3.4 million millennials are missing out on homeownership.
Sam Khater, Chief Economist at Freddie Mac, stated in Freddie Mac’s February Insight “We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations.” “This further highlights the importance of addressing barriers to the production of new housing supply to help accommodate long-term housing demand,” he added.
Make way for millennials! According to the Dave Ramsey website, in 2019 millennials will lead the way in number of mortgages, accounting for 45% of the market. As the millennial generation reaches adulthood, they are moving into the housing market looking for a place to call home. However, it is not in the (credit nor debit) cards for most to be living in the city like modern TV drama would have you think. Because of historically high student debt, recession, rising real estate costs, and a challenging and stratified job market, ‘frugal’ is the word to live by. So, most millennials are looking into moving into single family suburban homes on the outskirts of
In their quest to save money in their new homes, millennials are keeping an eye out for space with a multiplicity of use and amenities built for efficiency. No longer is it the size that matters, but how it is used. While they desire the life of suburbia, they also want to integrate some elements of urban life such as walk-ability to shopping & dining and open options for transit. Many attribute this millennial propensity toward convenience to the modern technological era: everything is now available at the click of a screen.
Regardless of the why, there is a huge disconnect between the houses which millennials want and the houses which realtors are selling. Part of the issue could be the disconnect in age. According to National Association of Realtors the average age of a realtor today is 57, and home-builders are building homes with Baby boomers and Gen X in mind. Generations before wanted mansions, but a millennials only desire is a comfortable and adaptable kind of space. Pardee Homes interior designer , Bobby Berk, summarizes the shift for millennials : “ I think we grew up around an older generation of excess, and saw what it did to everyone and the economy. It made us more of a less is more generation.”
It’s safe to say that as this new generation grows up, it’s in real estates best interest to grow with it.
Title insurance agents might have a new competitor entering the title and escrow arena.
Title insurance agents might have a new competitor entering the title and escrow arena. A startup company from Seattle named Modus opened early this July. Modus allows real estate agents to use its resources as a title and escrow workshop, bypassing a traditional title firm altogether. Both agents and clients can log onto the company’s platform to track every step of the closing process. By using a shared platform, the service reduces the potential for fraud and speeds up closing by eliminating the back-and-forth of personal and financial information via email. Agents also will have the ability to outsource manual data entry, cutting down on time for closings once more.
Modus is not the only start-up offering such services. The fledgling company is joining names such as Spruce and JetClosing, startups which offer similar services for the sake of simplifying the title and escrow process. The increasing popularity of such companies raises concerns among title companies- will existing firms have to provide more to compete with these young startups?
Or does this sound like these companies are trying to offer a solution that is looking for a problem? If someone had a problem at a closing it could have either been a bad real estate agent or an escrow agent. Typically it is the buyers that pick the escrow, but in today’s market it seems to be this responsibility has fallen on the listing agent, whose primary job is first and foremost a marketing one. The listing agent does not directly sell your house, but they should be the reason your house sells. Thus being knowledgeable in escrow is not a primary responsibility for them.
Then there could also be issues with banks accepting electronic signatures when it comes to payoffs on the seller’s mortgage and getting new loan documents on the buyer’s loan. When it comes to real estate transactions, electronic signatures are enforceable, however certain documents (e.g. mortgages and deeds) will require original signatures for recordation. Borrowers and lenders continue to require originally executed notes to maximize their comfort level that there is only one negotiable instrument.