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Resolve to Buy a Home Early in 2017

Resolve to Buy a Home Early in 2017 |®

Let’s finish out the year with a holiday basket packed with good news: We’re ending 2016 in better economic shape than in recent years. Unemployment is down to 4.6%, its lowest level since August 2007; consumer confidence is higher than it has been since July 2007; and home values nationally and in more than half of the major markets in the country have recovered.

We’re employed, confident, and have recovered equity in our homes. The stock market is up and flirting with all-time highs.

That sounds like the perfect backdrop to buy a home in 2017, whether it’s a first-time purchase, a move up, a downsize, or a relocation. Right?

Maybe. But before you take the plunge, you’re going to have to come to grips with two factors that are now decidedly worse for buying than they were at the end of last year: Mortgage rates are higher, and the inventory of homes for sale is lower.

Mortgage rates are a bit more than a quarter of a point higher now than they were at the end of 2015. That translates into payments that are 3% higher. Still, that increase can be managed by most.

The key challenge for potential buyers is that rates are now likely to move up more—as much as three-quarters of a point in 2017. That would be increasing payments by an additional 9%.

Tight inventory levels have been a problem for more than four years. As sales have grown, supply has fallen. We’ve seen the age of inventory—how long homes sit on the market—drop dramatically as home buyers burn through the available stock.

We’ve had an abnormally strong autumn for home sales because frustrated buyers are keeping at it even after the end of peak buying season. We also saw more new buyers emerge later in the peak season. Then as mortgage rates started to move up in October and then accelerated their rise in November and December, a new sense of urgency was added to the mix.

As a result of this unusually strong demand in the slower time of the year, we will end this year with at least 10% fewer homes for sale than we had last year. And we thought last year was bad!

Get started on your home hunt now

If your New Year’s resolutions include buying a home, I would suggest getting an early start. January and February typically are the slowest months of the year for sales, as harsh weather in most of the country dissuades most potential buyers.

Buyers in January and February face far less competition from other buyers, yet inventory is only marginally lower than in the spring.

Since mortgage rates are likely to move up as the year progresses, the beginning of the year represents the best time to lock in rates before they get even higher.

Early-year buyers can use the holidays to get ready. Organize your financial information to make getting pre-approved for a mortgage easier. Use® to find an expert local Realtor® to help you. And while you are there, sign up for alerts on new homes and price changes on neighborhoods that interest you.

Jonathan Smoke is the chief economist of, where he analyzes real estate data and trends to develop market insights for the consumer. Follow @SmokeonHousing



2017 housing market forecasts — suburbs are in, low mortgage rates are out

2017 housing market forecasts — suburbs are in, low mortgage rates are out - The Washington Post

Various real estate entities have weighed in with their prognostications for the 2017 housing market. Most observers expect home sales and prices to moderate in the coming year. They say suburbs will make a comeback while the days of low mortgage rates are over.

Of course, a lot depends on the actions of the new administration. Although President-elect Donald Trump said little about housing during the campaign, some of the issues he highlighted will have an effect on the residential real estate market, such as infrastructure spending, regulatory and tax reform, and immigration policies.

Below is a roundup of what the experts say buyers, sellers and renters can expect in 2017: predicts “a year of slowing, yet moderate growth.” The listing service for the National Association of Realtors compiled five housing trends for 2017:

Millennials and boomers will dominate the market. expects these two massive demographic groups to power demand for the next decade.

Midwestern cities will continue to be hotbeds for millennials. According to, millennials are clamoring to live in Madison, Wis.; Columbus, Ohio; Omaha; Des Moines; and Minneapolis.

Slowing price appreciation. forecasts home prices will grow at 3.9 percent annually, compared to an estimated 4.9 percent in 2016.

Fewer homes on the market and fast-moving markets. Inventory is down an average 11 percent in the top 100 metro markets, and it is not expected to improve next year. Homes are selling 14 percent faster.

Western cities will continue to lead the nation in prices and sales. predicts prices to increase 5.8 percent and sales to increase 4.7 percent in this region.

[More homes sold in the D.C. area last month than any November in the past seven years]

One prediction you can always count on: No matter what’s happening with the economy, NAR is always going to say it’s a great time to buy. Its fourth quarter Housing Opportunities and Market Experience survey found that 70 percent of people say now is a good time to buy a home. NAR also predicts the rate on a 30-year fixed mortgage will rise to 4.6 percent by the end of 2017.

Zillow says the homeownership rate will bounce back even as renting becomes more affordable. The real estate data firm also sees a reversal of a recent trend, predicting that “more Americans will drive in from the affordable suburbs for work, despite urban development efforts.” Its seven predictions are:

Cities will focus on denser development.

More millennials will become homeowners.

Rental affordability will improve.

Buyers of newly built homes will have to spend more to cover rising costs of construction.

The percentage of people who drive to work will rise for the first time in a decade as homeowners move farther into the suburbs seeking affordable housing.

Home values will grow 3.6 percent.

“Those looking for more affordable housing options will be pushed to areas farther away from good transit options, in turn leading more Americans to drive to work,” said Svenja Gudell, Zillow chief economist. “Renters should have an easier time in 2017. Income growth and slowing rent appreciation will combine to make renting more affordable than it has been for the past two years.”

Redfin predicts “strong buyer interest, better access to credit and a modest and much needed increase in inventory will allow home sales to grow but not as much in 2016.” The national real estate brokerage made six predictions:

The housing market will continue to grow but at a slower pace. Redfin expects median home sale prices to rise 5.3 percent annually in 2017 compared to 5.5 percent this year and existing home sales to increase 2.8 percent annually in 2017 compared to 3.4 percent last year. Although Redfin predicts inventory will be up slightly, it noted that “because we haven’t seen any increase in supply in the most affordable third of the housing market in more than eight months, we expect most of next year’s increase to be in the most expensive third of the market.”

2017 will be the fastest real estate market on record. Homes stayed on the market an average of 52 days this year, according to Redfin. It expects them to sell even faster in 2017.

New-construction growth will slow. Construction is “much lower than historical averages due largely to labor shortages. Given that nearly one in four construction workers are foreign-born, stricter immigration policies from the Trump administration are likely to make the problem worse.”

Mortgage rates will increase but not too much. Redfin expects mortgage rates to rise but no higher than 4.3 percent on the 30-year fixed rate next year

More people will have access to home loans. Next year, Fannie Mae and Freddie Mac will raise its loan limits for the first time since 2006, increasing them to $424,100 for most of the country and to $636,150 for more expensive markets. “This change makes it easier for more homebuyers to qualify for a mortgage in high-priced markets,” Redfin said.

Millennials will move to second tier-cities. According to Redfin, among the places millennials are looking to buy are Raleigh, N.C.; Austin; and North Port, Fla.

The Mortgage Bankers Association predicts mortgage rates will rise slightly but remain low, purchase applications will increase and refinance applications will decrease.

“Strong household formation coupled with further job growth, rising wages and continuing home price appreciation will drive strong growth in purchase originations in the coming years,” said Mike Fratantoni, MBA’s chief economist.

MBA expects rates on the 30-year fixed rate mortgage to remain below 5 percent through the end of 2018.

“Historically low and, in some cases, negative rates around the world continue to put downward pressure on long-term U.S. [bond] rates, keeping them lower than the domestic growth environment would otherwise warrant,” Fratantoni said.

Many times over the past few years the refinance boom has been declared over only to have world events conspire to revive it. Although he adds a caveat to his expectation, Fratantoni said he expects fewer refinances in the coming year.

“The world is an uncertain place, and there is always a chance that rates could drop again in response to global turmoil,” Fratantoni said. “But we expect that refinance volume will most likely be much lower over the next few years as homeowners have repeatedly had the opportunity to lower their rates, and there will be fewer households with an incentive to refinance if rates follow the path we are projecting.”


27 Agents and Brokers On Their Favorite Thing About Real Estate

27 Agents and Brokers On Their Favorite Thing About Real Estate

Real estate professionals are a passionate bunch, and we wanted to find out what they like most about being in this business.

Through e-mail, Facebook and Inman’s social media channels, 27 agents told us why do what they do.

1. “We help people have a better life.”

– Sunny Lake, principal managing broker at Coldwell Banker Bain; Bellingham, Washington

2. “Handing clients their keys on closing day is more than just a paycheck. It means that you successfully coached, mentored and supported another family through the journey of buying their new home.”

– Kenyatta Jones-Arietta, licensed broker/owner at R2M Realty; New York/New Jersey

3. Knowing that when I help a client, the client is in great hands. I can shield them from many of the issues in our profession as named in the DANGER Report put out by NAR.”

– Shawn Shai Halahmy, Realtor at BrokerInTrust Real Estate; Northridge, California

4. “I like the feeling I get when a match is made…whether it is someone finding their first house, or matching a tenant and a landlord.”

– Rosanne Fernandez, real estate salesperson, Coldwell Banker Residential Brokerage; Ronkonkoma, New York

5. I personally enjoy educating my buyers and love the look on their face when they have found their dream home. The whole process can be overwhelming and stressful, but the smile on my clients face when they have keys in hand makes everything worth it. My true passion is being a home matchmaker and I wouldn’t change a thing!”

– Krissy J. Hoffman, Realtor at Re/Max Encore; Lake Orion, Michigan

6. “I really enjoy telling first time buyers that the offer was accepted and then handing them keys at closing. I thrive off the excitement.”

– Kristina Carroll, agent with Ashworth Realty; Douglasville, Georgia

“I love helping clients realize their dream of homeownership. The flexibility in managing my schedule creates a better work-life balance.”

– Chris Soignier, Realtor with eXp Realty; Austin, Texas

8. “I love coaching people through what is one of the biggest decisions of adulthood. And I enjoy being my own boss. Making my own schedule. Being there for my family first and not missing out.”

– Susan Roche, broker/Realtor at Keller Williams; Ballantyne Area in Charlotte, North Carolina

9. “I enjoy the change. Every client is different, the market changes and you can always further your education in the field. Days go by quickly when you are having fun and taking the stress out of home buying or selling for clients.”

– Kati Ross, Realtor at United Properties of West Michigan; Sand Lake; Michigan

10. “Everyday is different, every customer so different and after 23 years I learn something new almost every deal. Helping people see their dreams come true make the bad days better.”

– Pam Greer Redden, agent with Crye-Leike Realtors; Dickson, Tennessee

11. Excitement finding the perfect home, business or investment for the special understanding client.” 

– Tracy Allis, real estate agent at Re/Max Town & Country; Flushing, Michigan

12. “The creative freedom … which I suppose you could have that with other jobs … but I always liked the ability to be creative and as outside the box as you wanted to be.”

– Kellie Tinnin-Yonemoto, career development director at ERA Sellers & Buyers Real Estate; Albuquerque, New Mexico

13. I love that it’s always changing thanks to new technologies. They allow for more freedoms, more ways to stand out from the crowd, and more services you can offer your clients.”

– Elisha Brady, Realtor sales associate at Weichert, Realtors – Briotti Group; Waterbury, Connecticut

14. I like the Art of the deal and how the challenges are always different as are the homes and the people.”

– Sandra Patti, sales associate at Weichert Realtors; Hillsborough, New Jersey

15. Every day I wake up with hustle in my blood. I’m always in a competition with myself to strive for greatness. I would say real estate is truly something that keeps self-improvement and progress at the forefront of my mind. I’m always learning and the education never stops no matter how long you’ve been in the business.”

– Dominique Edwards, Realtor associate at Keller Williams City Life Realty; Hoboken, New Jersey

16. “I love how creative I can make my photos, descriptions … I love the freedom I have to make my own hours and still be a mother to my children … the $$ isn’t bad either.”

– Shannon De Gennaro, real estate agent at ERA 1st Independent Realty; Newburgh, New York

17. The unpredictability of it all. Life would be boring having a 9-5 salaried job. Ugh!”

– Kathie Swanson, Century 21 Broker Associate; Loveland, Colorado

18. “Putting out fires! My husband says my job is more like a firefighter than a Realtor. Every deal spurs some sort of new and challenging obstacle, and I love being able to think outside the box or dig into the memories of my past deals to find the best solution to fit my client’s needs.”

– Maggie Claprood, Realtor at Benchmark Realty Mt. Juliet; Nashville, Tennessee

19. I always say that real estate is a way of life, more than a career. Relationships continue after the closing and there is always something you can be doing for your business or your clients. You’re never ‘done.'”

– Terri Harder, Realtor at Keller Williams Realty; Minneapolis

20. I love not knowing who or what will cross my path each day. I’m always moving forward and never looking back. I know that my efforts today may not come to fruition right away but will eventually; I’m totally OK with that!”

– Christopher Pagli, real estate broker at Ocean Gate Realty; Portland, Maine

21. “There is no luck in real estate. Successful real estate brokers and investors learn and work every day so that each day they become less lucky and more in the right place at right time for luck to occur.”

– Dominic Madrid, owner/qualifying broker at 1Shop Homes; Albuquerque, New Mexico

22. It is not about my numbers, credentials, or achievements. For me, it is about finding the most important place in our lives for my clients — their home. And the lasting relationships that follow.”

– Diana Lipton, real estate agent at Re/Max Equity Group; Portland, Oregon

23. “I feel I’ve served a great purpose when I place keys to a buyer’s new home into their hands and say, ‘Welcome to your new home.’ The looks on their faces are priceless! I derive an equal amount of joy when I help a client sell their house in order to help them move onto the next chapter of their lives. It’s just such an awesome feeling to play an integral part in someone’s major life decision, for which I am truly grateful.”

– Deb Lord, Realtor at JK Realty; Gilbert, Arizona

24. “But most importantly, at the end of the day, the satisfaction of knowing you were not only helpful, but instrumental in positioning a family for their future.”

– Luke Thigpen, Realtor with eXp Realty; Lafayette, Louisiana.

25. “I Love the opportunity to build lifelong relationships with my amazing clients. Knowing that I am able to make their dreams of homeownership a reality is very rewarding.”

– Amber Boyd, broker/owner; Core One Real Estate; Lavon, Texas

26. I love the look on clients faces whether its a sale or a rental when they receive their keys to their new home. Their happiness makes all the work so worth it!”

– Samantha Hibbard, Realtor at Top Flight & Property Management; Clarksville, Tennessee

27. “One of my favorites (besides exceeding a client’s expectations on finding ‘just the right home!’) is having the epiphany many years ago that real estate isn’t cut and dried or monotonous as most people assume. Navigating the nuances and different scenarios of the buying and selling process of every single transaction to a ‘win-win’ completion for the clients, customers and other brokers is always gratifying and fulfilling! I always learn new things and I’m doubly rewarded, and honored when a newer agent looks to me as a part mentor and proactive partner in making the magic happen. I love real estate!”

– Carl Dufton, Owner at Century 21 Bay Properties; Blaine, Washington


Will 2017 Be A Buyer’s Market Or A Seller’s Market?

Will 2017 Be A Buyer's Market Or A Seller's Market?

Key Takeaways

Next year will likely remain a seller's market in most markets, but buyers might have their day in 2018 or 2019.

Future buyers will be "less white and a little younger."


In some years and some markets, the answer is obvious — in 2016, Denver was a seller’s market, and San Francisco’s been one for quite a stretch.

But sometimes, it’s not so clear, and with mortgage rates on the up-and-up and robust plans for the economy ahead, all the plans for 2017 seem to be out the window.

Here’s what four economists had to say about whether 2017 is leaning toward buyers or sellers.

The consensus is?

Most economists we talked to said that overall, they thought 2017 was going to continue to be a strong market for sellers — for now.

“While I expect inventory levels to rise in 2017, it will likely remain a seller’s market,” said Matthew Gardner, chief economist at Windermere. “New construction will pick up steam in 2017, but not to levels that will provide sufficient support to a stretched housing market. Sellers will likely find that it will take a little longer to sell, but demand will still outstrip supply on the back of a job market that continues to tighten.”

Svenja Gudell, chief economist at Zillow, opined that “2017 is probably going to skew more toward the seller’s market — most markets will skew more toward seller’s markets, and even in the Midwest there are probably more seller’s markets than buyer’s markets compared to their own history.”

Geography does play a role, however, said Jonathan Smoke, chief economist at

“Ultimately, I do think it depends on where you are in the country — and not even at a market level,” Smoke said. “We’re seeing some clear patterns emerge within markets — one might be slowing down and cooling off where another part is really heating up. Real estate is so local that I would argue that a neighborhood view is really where you can see the differences and disparities and changes that are occurring around the country.”

Smoke noted that first-time buyers have been most successful in the Midwest this year, whereas markets in the West have seen the most significant price appreciation, making it difficult for first-time buyers to find success.

“We tend to have markets that are either above average in price expectation or sales expectation, and there aren’t many markets that have above-average expectations in both — supply constraint is driving the price movement in the strongest price markets, seller’s markets, but the buyer’s markets where buyers are getting a really affordable home, as a result, those markets are seeing a greater growth in sales,” Smoke explained.

“Either one is good for real estate,” he concluded.

Will we see a shift?

Gudell said that Zillow had just asked a panel of experts — more than 100 economists — “what they thought was going to happen to the tradeoff between buyers versus sellers.”

She said that among the economists surveyed, the most popular belief was that in 2018 or 2019, the bulk of markets will begin to shift from seller’s markets to buyer’s markets.

“In some markets, it’ll start to turn already in 2017, where demand isn’t quite so high and you get a little more inventory in and you have buyers better able to negotiate,” Gudell added.

What does the future buyer look like?

Mark Fleming, chief economist at First American, said that, “assuming an environment with modestly and predictably rising mortgage rates, it becomes a first-time homebuyer purchase-oriented marketplace.

“The question as a real estate agent is, how do you find and market to that first-time homebuyer?” asked Fleming. “Because that first-time homebuyer is going to be a young, technologically savvy millennial — and even more importantly, ethnically diverse. The demand for first-time housing is going to come from a different kind of individual than we’ve traditionally seen: Young, diverse, technologically savvy and much more likely to be college-educated.”

“The homeownership rate will grow, and they’ll be less white and a little younger,” said Gudell.

“Unfortunately, I think all of us will be spending more time in the car as more people have to look for more housing outside the city center as homes become much more expensive in the urban area,” she added. “During the recovery, it’s really picked up and the urban centers have appreciated much faster than the outerlying areas.”

“The potential is there for the market to have the most first-time buyers — certainly on an absolute volume basis, but also on a shared transactions perspective,” said Smoke.

“For the industry, this is the biggest shift we need to be able to contend with because it likely means elongated length of time that people are spending in that journey, especially the first-time buyer, but it potentially also means higher cancellation rates and lower conversion rates. You’re going to have more challenges with people contending with needing to qualify for and buy a home in the environment we’re in now than in the environment we were in the last two years.

“Highly qualified pent-up demand has been driving the market — now, it’s more organic activity at a time when interest rates are on the move-up,” he added. “The potential is there for an even bigger year than we’re forecasting, but it comes with challenges and that’s why we’re expecting only moderate growth instead of huge growth.”

“The thing about housing is that everybody needs it and you can’t outsource it,” said Fleming.


4 Real Estate Trends for 2017 Investors Should Be Aware Of

4 Real Estate Trends for 2017 Investors Should Be Aware Of | Investopedia

Real estate investing carries a certain degree of risk, but it also has the potential to be very rewarding. One factor that may contribute to your success as a property investor is the ability to adapt when necessary. Staying abreast of the latest developments and trends in the commercial and residential markets is important if you want to stay ahead of the curve. As 2017 looms on the horizon, here are the most significant trends that may impact real estate investors in the near future.

1. Drone Technology Takes Off

Earlier this year the Federal Aviation Administration (FAA) approved the use of drones in commercial activity. For real estate agents, that opens the door to new possibilities in terms of how they show available properties. That also expands the scope of how investors are able to vet homes, office buildings or other potential investments.

A drone video feed could allow you to view a property from every possible angle without having to see it in person. You can check for any possible defects in the structure that are visible to the naked eye before moving on to a more in-depth inspection. That could save you time and money in the long run if the drone video exposes a serious flaw. (For more, see Delivery by Drone: New Rules for Flights.)

2. Global Economic Growth May Be Muted

In terms of the worldwide economic forecast, the global economy is expected to grow by 3.4% in 2017, according to the International Monetary Fund (IMF). While that’s an increase over the 3.1% growth rate for 2016, it still represents a slight downgrade of the IMF’s original forecast. That was triggered by a dampening of the economic outlook in the wake of the U.K. Brexit​ and a U.S. economy that didn’t grow as quickly as initially expected. (For more, see Brexit's Effect on the Market.)

While global markets were shaken after the recent presidential election, they’ve more or less rebounded. However, now that the Federal Reserve has raised interest rates by 0.25%, the second increase in a decade, there may be a dampening effect on stocks. Taken together, those factors could work to quell the real estate market to a degree, as well. Investors may need to consider how foreign markets may be affected by a global slowdown and what that could mean for U.S. real estate.

3. New Home Construction Will Regain Steam

After a period of slowdown, 2017 looks like it may be the year that housing starts begin to climb once again. Kiplinger’s predicts that single-family-housing starts will rise 11% in 2017, up from the 9% increase estimated for 2016. With inventory 4.3% lower than it was a year ago and home prices continuing to rise, there’s an opportunity for builders to fill the gap in demand.

Commercial construction is also expected to see some positive growth in the new year. According to Dodge Data & Analytics, U.S. construction starts will grow by 5% for 2017, totaling $713 billion. That’s an improvement over the 1% increase in commercial construction reported for 2016, although it falls short of the 11% gain reported in 2015. While the increases on both the residential and commercial sides are modest, they’re still a positive for investors whose focus is on ground-up properties.

4. Optionality Will Reshape the Way Properties Are Used

The sharing economy has had an impact on the way people work, vacation or simply catch a cab, and it’s also leaving its imprint on the real estate market. According to the Urban Land Institute (ULI), optionality is adding a new dimension to the way that property investors – and their tenants – define the use for a particular space.

Co-living is perhaps the most visible example of this phenomenon. Companies such as Common, WeLive and Commonspace are putting a new spin on apartment living by offering units that combine private living space with communal areas for cooking, dining and socializing. A 2017 forecast for the U.S. and Canada done by ULI and PWC features optionality front and center as developers seek to identify the best use for investment properties. (For more, see Is Cohousing Right for You?)

The Bottom Line

These are just some of the things set to influence commercial and residential real estate in 2017, and they may afffect some investors more than others. As the new year gets underway, reviewing your property investments while analyzing your goals for the next 12 months is a wise move. Understanding what trends are poised to take off can make it easier to spot potentially valuable investment opportunities going forward.


Profit-Share Checks Cut At KW To The Tune Of $5.6M

Profit-Share Checks Cut At KW To The Tune Of $5.6M

While some employees are on their boss’ naughty list, it’s obvious that the employees at Keller Williams’ headquarters have been especially nice this year.

This morning, KW executives surprised their team of 245 employees with more than $5.6 million in profit-share checks as a way to say “thanks” for a year of robust and solid growth.

“Our team has worked really hard to help our company set all-time monthly records every single month this year. We’re a private company, so Profit Share comes directly out of our owners’ profits,” said CEO Chris Heller in a statement.

“And our owners are so appreciative of everything our team has accomplished that they want to thank our people in a big, truly life-changing way.”

Specifically, the team will receive $5,628,585.13 — a whopping 48 percent increase from last year’s check that totaled $3.77 million. Furthermore, since November, the company has distributed $143.1 million in profit shares to their employees across the globe.

For salaried employees, the average profit share check will amount to 35 percent to 37 percent of their base salary. That comes out to a check of at least $12,600 for an employee making $36,000.

“The reaction all throughout our offices were big ‘Kool Aid’ smiles and hugs from leaders as the live profit-share checks were issued on a one-on-one basis to all 245 of our team members in our headquarters office in Austin, Texas,” said KW spokesperson Darryl Frost about the event.


KW Co-Founder and Chairman Gary Keller and early company leaders said they created the profit share program “to ensure the goals of the company’s owners and agents remain permanently aligned.”

“When Gary Keller started this company, he understood that the higher law of business is to give back to those who help you succeed. And when you’re part of a team, you’re part of a team,” said KW President John Davis.

“We’re so honored to get to lead with such a talented group of people to help our 150,000 agents fund their lives and create opportunities for their families.”


Will mortgage rates keep rising? Bay Area experts read the tea leaves

Will mortgage rates keep rising? Bay Area experts read the tea leaves – Silicon Valley

After the Fed’s interest rate hike this week, Bay Area real estate agents said they expect buyers will want to lock in historically low mortgage rates while they still can.


PUBLISHED: December 16, 2016 at 12:42 pm | UPDATED: December 16, 2016 at 6:23 pm

Now that the Federal Reserve has pushed up interest rates for just the second time in a decade, what does it mean for mortgage rates and the housing market?

It depends on who’s reading the tea leaves.

Some Bay Area brokers anticipate the rate hike will spur prospective homebuyers to lock in historically low mortgage rates ahead of more Fed boosts in 2017 — even though mortgages aren’t directly linked to the Fed’s benchmark rate. But rising rates could make owners with already low rates wary of selling.

Real estate agents and brokers are hoping the Fed’s rate hike this week will be a catalyst for buyers’ fear of missing out, soon driving them into the market.

“It’s going to stimulate the market” in the coming months, said William Doerlich, president-elect of the Bay East Association of Realtors. “Buyers who’ve been sitting on the fence, going, `Is it time? Is it time?’ — this is going to be the little kick in the butt that says, `Hey rates are starting to go up. We better get ahead of the curve, we better get out there or we’re going to lose some of our buying power.’”

SJM-RATEHIKE-1216-90 But one economist said it’s impossible to predict the psychology of buyers and sellers in this new environment: “It could be that people who are locked in to low mortgage rates are going to be reluctant to sell,” said Alexander Field, professor of economics at Santa Clara University’s Leavey School of Business. “Because they’ll lose the benefits of those low rates” when it’s time to go looking for a new house.”

It can be notoriously tough to forecast trends in mortgage rates with precision, but the smart-money investors may have already placed their bets.

Field pointed out that the mortgage market already had responded to the Fed’s anticipated adjustment of the nation’s benchmark rate before it happened. Astute buyers, he said, would have been off the fence prior to Wednesday’s announcement, which raised the nation’s benchmark interest rate by a quarter of a percentage point. “It would have been smart in retrospect to buy that house in October.”

Especially in the Bay Area, where the median price of a single-family home is often painful: $499,000 in Contra Costa County; $702,500 in Alameda County; $940,000 in Santa Clara County; and $1.268 million in San Mateo County, according to a report last month by the CoreLogic real estate information service.

After bottoming out at 3.47 percent in late October, the average rate on 30-year fixed-rate mortgage loans ticked up to 4.13 percent last week. That could prove to be the motivation for potential buyers that Doerlich anticipates.

But the increase is still a relatively modest one. Even amid speculation about what the incoming Trump Administration’s economic policies might be, mortgage rates have simply returned to approximately where they were before the Fed’s previous increase in 2015. (That was its first increase since 2006.)

Mortgage rates don’t necessarily rise and fall with the Fed. In fact, they are more closely tied to the rates on long-range bonds, including 10-year Treasury bonds, which are widely regarded as safe investments when international markets rumble. After the Fed raised its marker in 2015, mortgage rates rose a bit, but then fell – and fell some more, post-Brexit, as shaken investors stowed their money in Treasury bonds.

The Fed, which is expected to raise the benchmark rate two or three more times in 2017, is trying to “preemptively nip the possibility of a resurgence of inflation — nip it in the bud,” Field said.

This leaves mortgage lenders in an unenviable spot: “If they don’t correctly forecast the inflation rate and the inflation rate turns out to be higher, then the lenders lose and the borrowers win,” he said.

Should lenders continue to raise mortgage rates, then homebuyers, of course, will be faced with bigger monthly payments, as will owners who hold adjustable loans.

That could dampen the demand for homes — though Field said demand could remain steady, “if the economy remains reasonably strong and the unemployment rate remains low and people are reasonably sure of their jobs. And then if Trump starts big deficit spending with infrastructure projects and tax cuts to stimulate the economy — that could counteract the negative effect of rising mortgage rates on the demand for housing.”

Chris Trapani, founder and CEO of the Sereno Group residential real estate sales firm, said he believes the housing market will be sparked in the short term by the Fed’s move and the recent mortgage rate increases.

After living for years with low interest rates, he said, “people just kind of came to expect that rates would be at 3 or 4 percent forever, and I think that kind of lulled some buyers to sleep, in a way. Because they didn’t feel any urgency to get a loan. Now they’re thinking, `Well, wait a minute, I’d better get out there and lock it in.’”


California: New laws target housing shortage

California: New laws target housing shortage

RICHMOND — Local and state officials on Friday highlighted a set of new laws aimed at helping ease California’s affordable housing crisis, including legislation that will allow owners of single-family homes to convert a portion of their home to a separate unit that can be rented out without going through expensive upgrades.

Accessory dwelling units, such as a master bedroom converted to a separate living unit with its own outside door, or a former garage that can now be rented as a studio, are a way to help ease the shortage of housing and give cities flexibility when it comes to creating new structures, housing officials and local politicians said, speaking at a news conference at Richmond’s City Hall.

“It instantly creates an opportunity to expand the supply of housing at low rent levels,” said Richmond Mayor Tom Butt. “Everything else we try to do to impact lack of housing takes years. This is something you could do in a weekend.”

Richmond was one of the first cities in California to pass a junior accessory dwelling unit ordinance, which also went into effect this week. Previously, homeowners who tried to convert a portion of their residence into a separate living unit were often stymied by requirements that the units have their own sewer and electricity meters, Butt said. Separate fire sprinkler systems will also not be required if the main house does not have them. Units can vary between 150 and 500 square feet and have partial kitchens and bathrooms.

Mayor Butt was joined at Friday’s news conference by Assemblyman Tony Thurmond, D-Richmond, California Housing and Community Development Director Ben Metcalf and Rachel Ginis, the executive director of Lilypad Homes, a nonprofit organization that helped sponsor legislation on accessory dwelling units.

“The way we are living in our homes is changing as more and more people are combining their resources to stay in their home and turning their home as a resource to generate additional income,” Ginis said. “In-law apartments are the hottest amenity in the real estate market right now.”

Over the past 50 years, home sizes have increased by more than 30 percent, while households have actually decreased, to an average of just 2.3 people, according to Thurmond. Today, only one-third of the state’s population has two adults and a child living in a home. Instead, the majority of households are single-parent families, couples without children, empty nesters and young professionals.

The new laws surrounding accessory dwelling units include AB 2406, AB 59 and AB 45.

Karina Ioffee Karina Ioffee covers the city of Richmond and West Contra Costa County. She has been a reporter for 15 years and has won numerous awards for her work, including from the Overseas Press Club. She speaks Spanish and Russian and is a former competitive gymnast. When not working, she likes to do yoga, cycle and dance.





The Most Fulfilling Careers Have These 5 Things in Common: The Most Fulfilling Careers Have These 5 Things in Common – Real estate agents took second place

The Most Fulfilling Careers Have These 5 Things in Common

"Real estate agents took second place as far as job satisfaction, with 75% saying they were fulfilled."

Sunday may be a fun day, at least according to The Bangles, but by the time the evening rolls around, most Americans aren’t feeling too cheerful. Three-quarters of people in the U.S. report experiencing “really bad” Sunday night blues, according to a 2015 survey by Anxiety or depression about the coming work week runs high among workers, which isn’t surprising when you consider that many people aren’t too happy with their jobs.

Only half of employees in the U.S. reported being satisfied with their jobs in 2016, according to the Conference Board’s annual job satisfaction survey. That’s an improvement over recent years, but it still means that 50% of people are less than thrilled about dragging themselves to work in the morning.

What’s the secret of the half of Americans who are happy at work? A recent LinkedIn survey offers some insight. The professional networking site asked more than 1,000 workers in the U.S. about their overall level of job satisfaction. They also asked about the factors that contributed to them feeling happy at work.

The most fulfilled workers lived in Charlotte, North Carolina, followed by Boston, Indianapolis, New York City, and Denver. Chefs were the most satisfied in their career choice, with 84% saying they felt completely or very fulfilled at work. Real estate agents took second place as far as job satisfaction, with 75% saying they were fulfilled. Doctor, IT consultant, and architect rounded out the top five list of fulfilling careers.

LinkedIn’s Work Satisfaction Survey also probed what specific factors influenced a person’s overall feeling of job fulfillment. Whether you’re a chef or an architect, the most fulfilling careers share the following five characteristics.

1. Pays a good salary

Money may not buy happiness, but it can make for a more fulfilling work experience, according to LinkedIn’s survey. The professional networking site isn’t alone in spotting a link between salary and job satisfaction. When job search site Glassdoor looked at 221,000 employee reviews and salary reports, they found that higher pay was associated with higher job satisfaction, with an employee’s happiness increasing about 1% for every extra $1,000 she earned, a small but significant increase. Overall, compensation and benefits accounted for about 12% of an employee’s overall satisfaction.

2. Friendly colleagues

People who reported being fulfilled at work tended to have positive, friendly relationships with their co-workers. That’s in line with research on how relationships between colleagues affect the workplace. People who have close work friendships are more satisfied than those who don’t gel with their colleagues, a Gallup poll found. Working with rude or difficult colleagues, meanwhile, can lower your motivation and impede creativity, other research has found.

Being able to do work that had a positive impact played a big role in overall job satisfaction. Workers who are purpose-oriented tend to be more satisfied in their jobs, LinkedIn’s 2016 Purpose at Work report found. They’re also more likely to be in leadership positions and to actively sing the praises of their employer. While large numbers of people of all ages want to find meaningful work, baby boomers are actually more focused on whether their career is making a positive impact than Gen Xers or millennials.

4. Encourages work-life balance

Giving your life to your job rarely leads to a feeling of fulfillment, at least according to LinkedIn’s survey. An “always-on” work mentality can lead to burnout and stress as you get used to responding to emails on the weekends and checking your messages just before you go to bed every night. Though work-life balance means different things to different people, having a job that allows you to disconnect and spend time doing other things that matter to you boosts your overall feeling of fulfillment.

5. Is challenging

You may be able to do your job with your eyes closed, but that’s not necessarily a good thing. Feeling challenged at work contributes to your overall sense of career fulfillment, the LinkedIn survey found. It could also have some pretty serious long-term benefits. People who had challenging jobs – ones that involved interpreting or evaluating information, developing strategies, or analyzing data – has slower rates of cognitive decline than people whose day-to-day work was less intense, a study published in the journal Neurology found. “Today’s challenging work conditions may also promote positive health effects,” the study’s authors wrote.


Property price fall in San Jose could be start of cooling markets in the US

Property price fall in San Jose could be start of cooling markets in the US - PropertyWire

The first interest rate rise in the United States for a year could hit the housing market in California where there are already signs of the real estate sector cooling, new research suggests.

The property market in California have been regarded as overheating for a while with house prices falling in some locations such as San Jose which has seen values fall for the first time since 2011.

According to the latest analysis report from real estate firm Clear Capital San Jose, one of the nation’s previously top performing housing markets, is reporting negative quarterly price growth for the first time in five years.

And there could be further cooling as, although it is only the second interest rate rise since the downturn in 2008, the US Federal Reserve has indicated that three more rate rises can be expected in 2017, meaning home loans are set to become more expensive.

According to Clear Capital home prices have fallen 0.3% over the last quarter, the lowest current quarterly growth rate in the country and a far cry from this market’s peak growth rate of just under 6% quarter on quarter during its recovery in late 2013.

Additionally, there are other Californian markets teetering on the edge and exhibiting a similarly bubble like behaviour to San Jose, which the report suggest makes it likely that more markets in the state could turn negative in the very near future.

For example, San Francisco, Los Angeles, and Bakersfield are currently reporting 1% growth quarter on quarter or less, each underperforming quarterly growth from this time last year by at least 0.7%.

If the market climate of San Jose is any indication of what is in store for other high priced Californian markets, more cities may dip into the red during 2017, according to Alex Villacorta, Clear Capital vice president of research and analytics.

Nationally, quarterly home price growth is holding steady at 0.9%, while national annual price growth has risen slightly to 5.6%, a rise of 0.1% since last month. Additionally, as market conditions across the county continue to improve, the national average distressed saturation rate decreased by 0.4% to 12.8%, a level which has fallen just over 2.5% in the last year.

Regional quarter on quarter price growth remains largely unchanged since the previous Clear Capital report. The West, Midwest, and South all continue to hover closely around the 1% quarter on quarter growth mark. Quarterly growth in the Northeast, however, has increased 0.2% to 0.5%, the highest reported quarterly growth rate for the relatively lethargic region since February of this year.

‘San Jose going negative over the last quarter is a huge deal, although no surprise given that growth in this market, and the Bay Area region as a whole, has greatly slowed over the last couple of years,’ said Villacorta.

‘Rapid price growth combined with lagging, sticky income levels quickly pushed home prices out of the affordable range for a majority of home buyers, which is a key factor in this market’s recent downturn in performance. For this metro, turn times have slowed for both performing and distressed properties as demand has begun to slack, finally pulling the area into the red during this real estate slow season,’ he explained.

‘While the San Jose market is the only major metro area in the nation reporting negative price growth, an increasingly likely interest rate hike by the Feds this month could just be the shock to the system that pulls other over heated markets even outside California and the West into the negatives, too. We’re keeping an eye on the situation in San Jose and markets nationwide as we begin to put together our 2017 housing market performance forecast,’ he added.