Feb. 1: Time for owners to sell? Demographics helping Realtors

Rob Chrisman

Rob Chrisman began his career in mortgage banking – primarily capital markets – 31 years ago in 1985 with First California Mortgage, assisting in Secondary Marketing until 1988, when he joined Tuttle & Co., a leading mortgage pipeline risk management firm. He was an account manager and partner at Tuttle & Co. until 1996, when he moved to Scotland with his family for 9 months. See more

Here are Realtor.com’s list of the 20 hottest real estate markets right now. Very California-centric, however some surprises in Stockton, Detroit MI, and Fort Wayne, IN.

 

Real estate agents everywhere are noticing the “tiny house” trend. Here’s the latest.

 

Legal matters for Agents

 

The Law Offices of Peter N. Brewer published an article relating to Liquidated Damages. A liquidated damage clause in a real estate transaction can allow the seller and buyer to come to an agreement, minimizing the likelihood of a dispute to arise. The agreement would entail an amount of damages to be awarded to the seller if the transaction fails due to the buyer’s breach. In order for a liquidated damage clause to be valid, the funds defined as liquidated damage must be a “reasonable estimate” of the seller’s loss and for most properties, the amount cannot be more than 3 percent of the sales price. Then the liquidated damages provision would need to satisfy special format requirements and must be signed by both parties involved in the purchase contract. The courts are then responsible for determining if the liquidated damages clause is enforceable. A liquidated damage clause can provide certainty regarding the amount a buyer may lose when a transaction fails.

 

Demographics

 

Last year, the 3.5 billion people that made up the bottom 50 percent of the world held the same amount of wealth as the richest 62 people in the world. In 2014, 85 people had as much wealth as the bottom half and in 2010, 388 people did. The top 1 percent of the world’s population controls more wealth than the rest of the world and the average wealth of each of the 72 million adults who are considered the wealthiest 1 percent was $1.7 million. Whereas the 6.48 billion that make up the bottom 90 percent have an average wealth of about $5,000. All in all, the rich are getting richer, creating greater global inequality.

 

According to recent data from CoreLogic, foreclosures fell 21.8 percent in the inventory for November 2015, compared to a year earlier when foreclosures fell by 18.8 percent. Florida, Michigan, Texas, California and Georgia had the highest rates of completed foreclosures compared to Washington DC, North Dakota, Wyoming, West Virginia and Hawaii, which all had the lowest rates of foreclosure. The National Association of Home Builders has supported the overturn of the EPA’s Waters of the US rule, which would have resulted in a rise in project costs and fees. The Houston housing market ended 2015 on a near-record high, with single-family home sales and sales of all property types reaching the second highest level, trailing behind the levels seen in 2014. The Houston housing market may remain cool for an extended period of time due to the drop in oil prices and the slight slowdown in sales allowed for inventory to grow from a 2.5 month supply to 3.2 months.

 

Sell?!

 

Now is the time to sell, according to a recent Apartment Survey published by Zelman and Associates. The majority of respondents (61 percent) said that buyer demand is strong and pricing is high, making it a prime seller’s market. December blended rent growth reached 3.7 percent, with the strongest rent growth evident on the West Coast at 4.9 percent, but at the same time, the deceleration has been most severe on the West Coast as well as rent growth declined 90 basis points from last year. New move in growth for Decembers slightly declined to 3.3 percent along with occupancy at 94.2 percent. Implied move-outs resulting from purchasing a home declined to 14.6 percent. Pricing power was noticeable in 22 of the 30 metros that are tracked and multi-family transaction volume should increase 12 percent in 2016.

 

Student housing news

 

As if finding a place to live as a college student was not hard enough, new apartment buildings that have popped up in Philadelphia are attracting young adults, due to its close proximity to college campuses like Drexel University and University of Pennsylvania. Yet these apartment complexes are not geared towards the undergraduate students that are nearby, but instead are intended to attract young professionals to live in the University City. The cost to rent these apartments range from anywhere between $1,900 for a small one bedroom apartment to almost $3,000 per month, as the high rent prices are meant to discourage undergraduate residents. Even the developers who have been building these luxury apartments near college campuses say they are intended for faculty members and not students and at the same time, allow young adults to enjoy the “college experience” by way of the apartment location. Not only is the high rent a strategy to prevent undergraduates from renting, but the lease terms purposefully miss the start of the academic year, and they reject applicants who rely on a guarantor to pay rent. The trend for building luxury apartments for young professionals is starting to take hold into other college campuses like Arizona State University, Texas A&M University in College station and the University of Chicago.

 

California economic activity – pretty good!

 

Comerica Bank’s California Economic Activity Index grew in November, increasing 1.0 percentage point to a level of 120.6. November’s reading is 37 points, or 43 percent, above the index cyclical low of 84.1. The index averaged 113.7 points for all of 2014, seven and two-fifths points above the average for all of 2013. October’s index reading was 119.6.

“Our California Economic Activity Index increased again in November after dipping from July through September. Two index components contributed to California’s summer doldrums: housing starts and the tech stock index. Both of those components improved in November. Also in November, we see only one index component in decline, state exports, likely being weighed down by the strong dollar,” said Robert Dye, Chief Economist at Comerica Bank. “Year-over-year job growth in California remains well above the U.S. average, registering a strong 2.9 percent in December while the U.S. as a whole gained 1.9 percent.”

 

 

“Perks” of reaching 50 and beyond! (Part 1 of 2)

  1. Kidnappers are not very interested in you.
  2. In a hostage situation, you are likely to be released first.
  3. No one expects you to run –anywhere.
  4. People call at 9 PM (or 9 AM) and ask, ‘Did I wake you?’
  5. People no longer view you as a hypochondriac.
  6. There is nothing left to learn the hard way.
  7. Things you buy now won’t wear out.
  8. You can eat supper at 4 PM.
  9. You can live without sex but not your glasses.
  10. You get into heated arguments about pension plans.

 

 

Rob

 

(Copyright 2016 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman. To subscribe please visit www.knowledgeforrealestateagents.com.)