Over half of home offers were in a bidding war in June

Redfin: Over half of home offers were in a bidding war in June

Less inventory and low mortgage rates fueling competition for homes

More than half of Redfin offers were part of bidding wars for the second month in a row in June, according to new data from the brokerage.

More homebuyers are entering the market while mortgage rates continue to hit record lows, and as a result, 53.7% of Redfin offers faced competition last month. This is up from a revised rate of 51.8% in May and 44.4% in April, Redfin said.

Redfin noted that more than half of all offers faced bidding wars in 12 of the 24 metros included in its analysis.

“Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades,” said Redfin Economist Taylor Marr in a written statement.

Renters and move-up buyers alike are competing for the small number of single-family homes on the market “as they realize they need more space for their families,” Marr added.

The most competitive markets? Boston, San Diego and Salt Lake City.

Boston had the highest bidding war rate in June, of 72.4%, staying on top after 67.2% of offers had a bidding war in May.

San Diego and Salt Lake City closely followed – 65.7% and 63.8% of offers in those markets faced competition, respectively.

On the least competitive end of the list, Miami had the lowest bidding war rate of 32.4%, closely topped by Chicago’s rate of 37.8% and Las Vegas at 39.2%.

In June, the number of homes overall for sale in the U.S. was down 21.3% year over year, while the number of new listings was down 12%, leaving inventory at its lowest level since at least 2012, according to Redfin data.

Single-family homes were most likely to be in a bidding war in June, with 56.2% of buyers facing competition. Supply in this segment is down 25% year over year, noted Redfin.

Townhomes and condos also saw supply restraints, 10.7% and 7%, respectively. Although supply in these parts of the market isn’t as low as single-family dwellings, 54.2% of townhomes were in a bidding war, as were 40.5% of condos, according to Redfin.

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Churches are Building Housing Developments in Their Backyards

The coronavirus is devastating churches' finances. Affordable housing could provide an answer. 

The Arlington Presbyterian Church in Virginia was dealing with declining Sunday attendance, and fewer donations, before deciding to turn to an affordable housing developer for help. In 2016, with membership down to about 60 from a height of 1,000 in the 1950s, the church sold its century-old sanctuary to the nonprofit Arlington Partnership for Affordable Housing (APAH). The developer razed the church and built a seven-story, 173-unit affordable complex in its place, allowing the congregation to escape increasing costs while fulfilling an obligation to care for the poor. Today, the church leases space on the ground floor of the building to serve its congregants.

“We had an alignment of mission,” Nina Janopaul, the CEO of APAH, said of the $71 million project that opened in November. “Their mantra was, the church is the people and the mission, not the building.”

Americans were already going to church less and less before the coronavirus shut down large social gatherings. After physical church attendance fell to zero for months during lockdown, the financial troubles caused by waning religiosity were thrown into sharp relief. But the situation, seemingly grim, has been cast as an opportunity by affordable-housing advocates and religious leaders working to combat homelessness. Religious institutions own thousands of acres of land in the U.S., and amid falling membership and participation, calls to convert surplus faith property and places of worship themselves into housing have gained traction.

“Land that belongs to faith communities is supposed to be for the services of the vulnerable,” said Monica Ball, who helps lead the Yes in God’s Back Yard (YIGBY) movement in San Diego. “If [the coronavirus] leaves us with more open space to build more desperately needed housing, amen.”

Property owned by religious institutions usually isn’t taxed, meaning those parcels tend to be revenue drainers for cities in addition to being underused sites for housing. In California, a state with one of the country’s largest homeless populations, about 38,800 acres of land are owned by religious institutions and have development potential, according to a study published in May by University of California, Berkeley’s Terner Center for Housing Innovation. Building affordable housing on some of that land could go far in addressing the state’s housing shortage; religious institutions own more than 9,000 acres of land in San Diego and Los Angeles counties alone, according to the Berkeley study.

Proposed legislation passed by the state Senate in late June would make it easier to do so. The proposal would allow developers of low-income housing in California to circumvent some land-use rules when starting projects at sites owned by faith organizations. A plan to redevelop church property as affordable housing in San Diego last year got bogged down in local ordinances that required the church to have a certain number of parking spaces based on square inches of pew space -- the apartments would have eliminated too many parking spaces. This bill would remove those roadblocks by granting faith sites seeking to build 100% affordable housing special designations that allow projects to skip parts of the rezoning process for multifamily housing. A significant share of faith-owned property in California is zoned exclusively for single-family use, according to the Berkeley study.

If the bill passes the full legislature, it could clear the way for projects in California similar to Denver’s St. Francis Apartments development, a 50-unit affordable complex that opened in 2018 after St. John’s Cathedral leased an underused parking lot it owned to a nonprofit developer. The building houses formerly homeless people in Denver’s Capitol Hill neighborhood, meeting the religious mission of the congregation that it neighbors while satisfying affordable-housing advocates who see big surface parking lots as barriers to overcoming homelessness. “The housing crisis is obvious to everyone,” Richard Lawson, the dean of St. John’s Cathedral, said in 2018. “And I think it's incumbent upon all of us ... to look [at] how to use all of our resources on behalf of those who are not benefiting from this economy.”

To read the full article, go to Bloomberg.

Average U.S. mortgage rate falls below 3% for the first time

The average rate for a 30-year fixed mortgage is 2.98%, down from 3.03% last week, Freddie Mac says

The average mortgage rate fell to 2.98% this week, breaking the 3% threshold for the first time, as investors concerned about a resurgence of the COVID-19 pandemic fled to the safety of the bond markets and the Federal Reserve continued to scoop up securities backed by home loans. (Housing Wire)

The average rate for a 30-year fixed mortgage fell to the lowest in almost five decades of data, down from 3.03% last week, Freddie Mac said in a statement Thursday. The average 15-year rate fell to 2.48%, the lowest in a data series going back almost 30 years, according to the mortgage financier.

Mortgage rates have hit a series of new lows in recent weeks as investors poured money into U.S.-dollar-denominated bonds – mainly Treasuries and mortgage-backed securities. Money managers are reacting to a stream of bad news about the coronavirus pandemic, with some of the nation’s biggest states setting records for new infections this week.

The Federal Reserve has continued to support the mortgage markets by purchasing about $4.5 billion a day of securities containing home loans packaged by Fannie Mae, Freddie Mac and Ginnie Mae.

“The Fed has been buying mortgage-backed securities even more than Treasuries,” said Chris Low, chief economist of FTN Financial in New York. “The Fed purchases are one of the main reasons for the record lows we’re seeing in mortgage rates.”

Record lows in mortgage rates will incentivize more households to refinance, putting more money in their pockets to support consumer spending, Low said.

“When you consider all the components of the economy – exports are not growing, business investments are not growing – that means households are going to carry the economy for the next couple of years in the form of consumption and retail,” Low said.

In addition, the low rates will boost home sales, which will motivate builders to kick into higher gear, which supports a component of GDP called residential fixed investment, he said.

“Low mortgage rates boost housing demand which means stronger residential investment, and already we are seeing that,” he said.

If you are wondering how current national and global situations might be impacting your property’s value, your neighborhood, or the Real Estate market in general, we are happy to provide more specific information.

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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4 Easy Staging Tips You Haven’t Thought About

Selling can be overwhelming. You're packing everything up, trying to make the house look pristine when all around you is what feels like chaos.

Since buyers want that great first impression, you know it's important to declutter—often that means cleaning until your home looks like it's never been lived in. And while you’re rushing around, trying to find a new place for your items, it may seem like an impossible task.

Take a breather—it's actually easier than you think. Here are four staging tips that are so easy they may not have even crossed your mind:

Decorate for the potential buyer. 

You know who this is because you were once this person! If you're in a starter home neighborhood, the buyer will likely be a younger individual or couple who is looking for more space after cramped apartment living. Choose trending paint colors and keep the decor minimalistic and modern.

Since so many people are working from home these days, you might want to forget decorating a kid's bedroom and opt for an office layout in the second bedroom instead.

Have a finished basement? Amp up the recreational feel with some movie theater loungers or make it a game room!

Think about your neighborhood as well. If you're in walking distance to a dog park, you may find that your buyer has a furry roommate. If your home is near a school, that's also an indicator that kids may come with the package for whoever owns your home next.

Use resources. 

You don't have to take on this process all by yourself. Rent a storage unit so you don't have to worry about hiding away your must-keeps. This way, these items are already neatly packed away and ready for your new home, and they won't get in the way of a buyer who isn't looking to see how bad your shopping addiction is.

Additionally, hire a cleaning company. You can find some relatively affordable options, and this will help you stay stress-free throughout the process. Once it's clean, all you have to worry about is keeping it that way!

Focus on the small accessories. 

Take a tour of your own home, but with fresh eyes. What do you see that stands out as grungy, old and just a complete turn-off? This can be anything from a sticky, splattered garbage bin that needs a good cleaning to your shower curtain which has a dense layer of soap scum that's going to scare even the bravest buyers away. Replace any small accessories that won't cost you a fortune, and clean anything that can look like new with some TLC.

Use your nose. 

Again, take a tour of your home, but this time focus on what you're smelling. A better option might be to find a friend or family member who can volunteer to do this for you—someone who doesn't live with you or isn't over all the time. Identify the sources of odor in your home and figure out a solution. The last thing you want is for a buyer to come in and quickly be hit by an unpleasant smell.

The cleaning and decluttering should help with this, but there are other things you can do to ensure your home is a breath of fresh air:

• Open up the windows! Let your home air out for an hour or two.

• Light some candles to freshen up the rooms.

• Bake a cake or some cookies right before a potential buyer comes over.

Staging can be easy if you just put yourself in the buyer's shoes. It is, however, more than just moving around furniture and putting away the excess items. Think back to the tour you took yourself before buying this home. What stood out to you—both good and bad? Think about how it all impacts the senses. Of course, trends change, but the overall feeling of clean and tidy is always the first thing people notice. And customizing your home with some easy staging tricks can make a big difference! (Housecall)

If you are wondering how current national and global situations might be impacting your property’s value, your neighborhood, or the Real Estate market in general, we are happy to provide more specific information.

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Foreign Home Buying Dries Up, Easing Way for Domestic Buyers

Foreign buying of U.S. homes was a driving factor in markets from California to Florida, helping prices reach new highs.

Now, the pandemic, reduced travel and immigration restrictions are further undermining already weakening international demand.Overseas residential real-estate purchases climbed steadily between 2011 and 2017, peaking at $153 billion in the year ended March 2017, according to the National Association of Realtors. About 60% of foreign buyers are recent immigrants or foreigners who live in the U.S., while others buy U.S. homes as investment properties or vacation homes, according to NAR.

Foreigners represent a tiny percentage of overall buyers. But because they have tended to cluster in coastal cities like New York, Miami and the Los Angeles area, they sometimes have had an exaggerated influence in these markets, especially at the higher-price end. Foreigners also were more likely to pay cash, making their offers more attractive to sellers.

Foreign appetite fell sharply in 2018 and 2019, according to NAR. Much of the buying came from China. It slowed in 2019 after the Chinese government implemented new controls over foreign currency purchases and as the country’s trade dispute with the U.S. heated up. A stronger dollar, which makes U.S. homes more expensive in foreign currencies, and concerns about global economic growth slowed overseas buying more broadly.

This year, demand looks likely to be even weaker, real-estate agents say.

Limited travel between the U.S. and other countries, worries about virus transmission and new restrictions on immigration could weigh on international investment in U.S. housing this year.

In the latest setback for foreign homeownership in the U.S., President Trump signed an order June 22 temporarily barring new immigrants on certain employment-based visas through the end of the year.

While the lack of overseas demand may disappoint homeowners in major coastal cities that attracted much of the foreign demand, local buyers who have lost out in bidding wars to deep-pocketed foreigners might be relieved.

“Some decline in international buying activity I don’t think necessarily harms the U.S. housing market,” said Lawrence Yun, NAR’s chief economist. “If anything, it doesn’t put any additional upward pressure on home prices, which have been a major concern for buyers on the affordability front.”

Home prices have continued to rise during the pandemic, even as the rate of home sales has dropped. The supply of homes for sale remains limited in many markets, and demand from buyers has increased in recent weeks as business activity has opened up in many states and mortgage rates have stayed low.

Foreign investment in U.S. housing can push up local home prices in select markets, according to a working paper released last monthby Caitlin Gorback and Benjamin Keys of the University of Pennsylvania.

The paper found that in ZIP Codes with a high proportion of foreign-born Chinese, house prices between 2012 and 2018 grew by 8 percentage points more than in comparable ZIP Codes. These areas, which in many cases also attracted strong local demand, could be vulnerable to price erosion as both domestic and foreign buying pulls back.

“The neighborhoods that are highly exposed to foreign investment on the upside are also exposed on the downside,” Mr. Keys said.

Many foreign investors buy homes for their children to live in while attending school in the U.S., and those purchases are on hold while families wait to see whether schools will be open in the fall, said Vicky Silvano, broker at Baird & Warner in Chicago.

“Because of the pandemic, the people that I work with are just on a ‘wait and see’ right now,” Ms. Silvano said. For foreign investors who own homes in the U.S., “I think there’s going to be more selling if the kids don’t come back to school” this year, she said.

Indiana University has drawn many foreign buyers to Bloomington, Ind., in the past decade, said Tracee Lutes, broker owner at Re/Max Acclaimed Properties.

“I think we will have a lot fewer foreign investment buyers here this year…with the uncertainty in the university plans and the uncertainty in the Covid situation,” she said.

Indiana University said in May that it plans to open in the fall for a mix of in-person and online classes.

Housing demand is strong in Bloomington, and a decline in foreign investment could be a boon to local shoppers, Ms. Lutes said: “I think you would see more in-state people, local people, that would take advantage of the ability to buy.”

Still, some see foreign buying picking up once normal travel resumes. In New Jersey and New York, Grace Tan of Prominent Properties Sotheby’s International Realty said her international clients in countries like China are already planning to shop for homes in the U.S. once international travel picks up.

“These clients are still not comfortable buying virtually,” she said. “They will come back. I already get the phone calls.”

For more information + the full article, go to Realtor.com

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