Lee Morof's Real Estate Blog

Last week’s economic news included readings from Case-Shiller Home Price Indices, along with data on new and pending home sales. Weekly readings on mortgage rates and new and continuing jobless claims were also published.

Case-Shiller: Home Price GrowthHolds Steady in June

National home prices grew at a seasonally-adjusted annual pace of 4.30 percent in June, which was unchanged from May’s year-over-year growth rate for home prices. The 20-City Home Price Index rose by 3.50 percent year-over-year in June.  

Phoenix, Arizona reported the leading year-over-year home price growth rate of 9.00 percent. Seattle, Washington held second place with a year-over-year home price growth rate of 6.50 percent. Home prices in Tampa, Florida grew at a year-over-year pace of 5.90 percent.   

Home price growth rates rose in five of 19 cities reported in the 20-City Index; the Wayne County Michigan metro area did not report for June’s 20-City Home Price Index. 

New Home Sales Rise as Pending Home Sales Dip in July

Sales of new homes rose for the third consecutive month in July according to the U.S. Census Bureau. July’s reading of 901,000 new homes sold on a seasonally adjusted annual basis was the highest pace of sales since 2006. Sales of new homes were 36 percent higher year-over-year. Slim inventories of pre-owned homes for sale and low mortgage rates boosted new home sales, but analysts said that builders also face headwinds including higher materials costs and affordability.

Pending home sales dropped in July from June’s year-over-year reading of 15.80 percent to July’s reading of 5.80 percent. Ongoing concerns over COVID-19, high unemployment rates and, concerns over jobs have caused would-be-homebuyers to delay their home purchase plans.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower rates for fixed-rate mortgages last week with the average rate for 30-year fixed-rate mortgages falling by eight basis points to 2.91 percent. The average rate for 15-year fixed-rate mortgages also fell by eight basis points to 2.46 percent. Rates for 5/1 adjustable rate mortgages averaged 2.91 percent and were unchanged from the prior week.

New jobless claims fell to 1.01 million claims filed from the prior week’s reading of 1.10 million initial claims filed. Continuing jobless claims were also lower with 14.54 million continuing claims filed as compared to the previous week’s reading of 14.76 million continuing jobless claims filed.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, private and public sector jobs growth, and the national unemployment rate. Weekly reports on mortgage rates and jobless claims will also be released.

Living in a multifamily community, whether this is an apartment building or a condo building, comes with certain bylaws. There are usually fines that are used to prevent people from breaking the rules.It is important for everyone to know what these rules are, why they need to be followed, and the penalties for breaking them.

Sometimes, homeowners are surprised when they realize they might be fined differently for breaking the same rule. There are a few points to keep in mind.

The Fines Should Be The Same

While there might be different fines charged for breaking different rules (for example, altering a common area might be different than parking lot damage), the fines should be the same for the same infraction across different homeowners. For example, two homeowners who are both guilty of damaging the mailroom should be fined the same amount. They should not be fined different amounts. There are usually fines that are clearly stated in the HOA bylaws how much someone might be fined. If two people are fined different amounts, then a grievance should be taken up.

Why The Fines Might Be Different

There is one situation where two homeowners who break the same rule might be fined different amounts. This comes in the form of sequential violations. For example, a homeowner who breaks a rule the first time might be fined $10 for the first infraction. Then, the second infraction might jump to $25. The third infraction might jump to $50, and so on. This is one situation where two homeowners who break the same rule might be fined two different amounts.

Read The Bylaws Carefully

If a situation such as this arises, it is important for homeowners to look at the bylaws and see what the fines are supposed to be. All fines should be clearly stated in the bylaws to help homeowners figure out how, why, and where they might be fined.

If there are any fines that seem confusing, then the homeowners should take this up with the HOA and ask for clarification, which the HOA should provide. There might be a reason why the fines might be different. It could also be an honest mistake.

Millennials are finally starting to enter the real estate market after delaying home purchases for several years. With a completely new client base looking for homes, it is time to start making your home more appealing to these young buyers.

Millennials are used to using high-tech gadgets every day, so they are going to desire these things in their new home. While there are several high-tech upgrades you can make on your home, these three will appeal the most to young homebuyers.

Keyless Entry: Security for the New Millennium

Keyless entry doors are becoming a popular way of keeping a home secure while adding that great “wow” factor. These keyless entry systems mean there’ll be no more fumbling for keys when all you want to do is get in the door. It may seem like something out of a sci-fi film, but several companies have mastered the art of keyless entry doors that you can use in your home today.

The door automatically locks when it is shut, and you will need the correct fingerprint to unlock the door. If you could show off a keyless entry system at your open house, you would immediately pique the interest of every young buyer interested in technology.

A Home Security System is a Great Practical Addition

A high-tech home security system will certainly make your home more appealing to young buyers, who may even be thinking about having children in the near future. No matter how safe your neighborhood is, everyone is always looking to feel more secure at home. Placing a few security cameras around the exterior of your home will allow you to know what is happening outside at all times, and buyers will love having that peace of mind.

Home Energy Monitor: For the Eco-Conscious Generation

Young people are extremely conscious of the environment, so they would love seeing a home energy monitor when shopping for a new home. A home energy monitor is able to track the energy use of every aspect of your home.

If you think your air conditioner is not running efficiently, a home energy monitor can tell you whether or not you’re right. Since young people know about the dangers of improper energy use, they will want to make the home as efficient as possible.

Solar Panels

Solar power only costs around 5 to 6 cents a kWh to produce, making it a no brainer that it makes your home more appealing to young buyers.

Millennials are slowly entering the real estate market, and although they are starting to look at homes, you’ll face a lot of competition from other homeowners looking to pass properties onto this new generation. These three upgrades will increase your home’s value and make it more appealing to Millennial buyers. For more information about selling your home, contact a trusted real estate professional today.

According to the National Case-Shiller Home Price Index for June, U.S. home prices rose 4.30 percent year-over-year, which was unchanged from May’s year-over-year home price growth rate. Home prices are expected to continue growing through 2020 as businesses reopen and COVID-19 restrictions ease.

Case-Shiller’s 20-City Home Price Index for May showed Phoenix, Arizona held the top spot with 9.00 percent year-over-year growth; Seattle, Washington followed with 650 percent growth in home prices. Tampa, Florida maintained its third-place position with 5.90 percent year-over-year home price growth. Five of 19 cities reporting in the 20-City Index showed a higher rate of home price growth. Wayne County, Michigan, which includes the Detroit metro area, did not provide information for June’s 20-City Home Price Index.

Craig Lazzara, managing director and global head of investment strategy at S&P Dow Jones Indices, wrote: “As has been the case for the last several months, home prices were particularly strong in the Southeast and West and were comparatively weak in the Midwest and Northeast.”

Short Supply of Single-Family Homes Continues to Fuel Rising Home Prices

Continued shortages of homes for sale and rising demand for homes caused home price gains in June. Analysts said that while low mortgage rates encouraged buyers to enter the market, overall housing market conditions did not contribute to affordable home prices. Analysts expressed concern that potential buyers were calculating affordability based on principal and interest payments and were not considering other costs of homeownership including taxes, hazard insurance, and mortgage insurance premiums that could be added to their monthly loan payments.

High home prices, COVID-19and ongoing unemployment, and decreasing growth in rental rates are obstacles to continued growth in home prices. Quarterly data published by the Federal Reserve Bank of St. Louis shows how average home prices have fallen in 2020. The national average price of a new home in the first quarter of 2020 was $383,000; in the second quarter of 2020, the average price of a new home was $368,000.

Average New Home Prices Fall in All U.S. Regions

Average regional U.S. home prices fell from the first quarter to the second quarter according to the Federal Reserve Bank of St. Louis. In the Northeast, the average price of a home fell to $622,000 from 645,200. The average price of a new home fell from $337,000 to $319,200 in the Midwest and fell from $325,300 to $315,500 in the South. The West had the highest average new home price in the second quarter of $459.900, but this was lower than the average new home price of $471,300 in the first quarter of 2020.

In some homes, garages are used only for car storage. They may appear to be bare and without real functional use for homeowners. However, other garages may be an envy of the neighborhood – they may have floor to ceiling shelving systems, and they may be the picture-perfect image of organization.

With a bit of planning and creativity, you can turn your garage into a much more functional space. Here’s how you can make your garage the most useful space in the house.

Determine What You Need To Store

One of the most important steps to take when improving the functionality of your garage is to determine which items you need to store. The last thing you want is to invest in a shelving system or cabinets for your garage only to later realize that your belongings do not fit in the features you have purchased. Take an inventory of the items you want to put in the space as well as their sizes and dimensions, and then take stock of the space available to store these items.

Invest In Storage Features

There are numerous types of storage features that you may choose to invest in for your garage, such as cabinets, drawers, wall pegs, shelves, overhead storage features, and bins.

The best storage features for your garage are those that take into account your accessibility needs. For example, seasonal items that you may rarely need access to may be placed in overhead storage features that hang over the cars. On the other hand, screwdrivers and other tools that you may need to use more frequently should be placed in a more accessible area.

Consider The Look Of The Garage

Some homeowners truly do not care what their garage looks like, but you should keep in mind that this is a room that is revealed to the outside world each time your garage doors are raised. This can indeed affect curb appeal and others’ impressions of you. Therefore, think about investing in a full garage storage system rather than piecing together different items.

If your garage looks like a war zone, you are wasting valuable storage space and compromising your property value. Investing in aesthetically pleasing and highly functional storage solutions can turn your garage into a major selling point and a great multi-use space.

Last week’s economic news included readings from Case-Shiller on home prices, the National Association of Home Builders Housing Market Indices, and sales of previously-owned homes. Readings on housing starts and building permits issued were released. Weekly reports on mortgage rates, new and continuing jobless claims were also published.

NAHB: Home Builder Confidence Rises in August

The National Association of Home Builders reported that builder confidence in housing market conditions rose six points to an index reading of 78.in August. The expected reading of 73 was based on July’s reading of 72. Homebuilder confidence was based on sharp demand for homes as city dwellers sought larger homes in less dense housing metro areas.

Ongoing shortages of pre-owned homes for sale boosted builder outlook as would-be buyers turned to new homes as supplies of pre-owned homes remained low.

The National Association of Realtors® reported higher numbers of previously owned homes sold in July at a seasonally adjusted annual pace of 5.86 million sales. 5.50 million sales of previously owned homes were expected based on June’s seasonally adjusted annual pace of 4.70 million sales.

Rising home sales could indicate increasing numbers of available homes, rising confidence in the economy, and sellers putting their homes on the market for reasons including buying bigger homes or relocation for less congested living conditions.

Commerce Department Reports Rising Rates of Housing Starts and Building Permits Issued

The Commerce Department reported a jump in U.S. housing starts in July with a seasonally adjusted annual rate of 1.496 million starts as compared to an expected pace of 1.330 million housing starts and an annual pace of  1.258 million housing starts reported in June.

Mortgage Rates Rise; Jobless Claims Mixed

Freddie Mac reported higher mortgage rates last week; the average rate for 30-year fixed-rate mortgages rose three basis points to 2.99 percent. Rates for 15-year fixed-rate mortgages averaged 2.54 percent and were eight basis points higher. Interest rates for 5/1 adjustable rate mortgages averaged one basis point higher at 2.91 percent. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages, 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

Initial jobless claims reported by states rose to 1.11 million new claims filed last week and surpassed the expected a reading of 910,000 new claims filed based on the prior week’s reading of  971,000 initial jobless claims filed. Continuing jobless claims fell to 14.80 million ongoing claims from the prior week’s reading of 15.50 million continuing claims.

What’s Ahead

This week’s scheduled economic news includes readings from Case-Shiller Home Price Indices, reports on new and pending home sales, and inflation. Weekly reports on mortgage rates and jobless claims will also be released.

The internet has changed how many people shop for a home and one of the most important issues that people will face is whether to fill out a home loan application online or offline.

While there is something to be said for going to the loan officer in person and filling out the application with the help of a professional, some people might find the online option to be more convenient. With this in mind, it is important to compare some of the ways in which an online versus an offline home application might be different.

The Eligibility Process

While the most exciting part of shopping for a home is traveling around and looking at the different options, people need to know how expensive of a home they can afford. With the online process, people can fill out the application process online and immediately see how big of a loan they can afford with the help of the home loan provider.

There are simple tools online, such as a loan eligibility calculator. In contrast, going to the office of the loan provider might require detailed discussions that could lead to a denial. This would end up being a waste of time. In this manner, the online process is faster.

The Documentation Required

The documentation process is also much easier online. When someone applies for a home loan online, it is easy to upload the required documents for review later. This might include the application form, proof of identity, proof of address, and more. Home loan providers will list all of the required documents on the site with ease. When it comes to applying in the offline world, this requires people to physically carry all of this information to the office. People run the risk of losing important documents in transit along the way.

The Application Process

Finally, even the process of applying for a loan itself is much easier when people can do this online. It is easy to register on the website, fill out the application, and submit the documents. Often, the turnaround time is much shorter as well. These are a few of the biggest reasons why the online application process is growing in popularity.

Recently, the local region’s subcommittee held a meeting using videoconferencing and discussed a new version Home Buyer Assistance Program. The Home Buyer Assistance Program has been designed to help first-time homebuyers by providing a down payment of up to $25,000. The funding for the Home Buyer Assistance Program is going to come from the city’s reparations fund.

The local city council agreed to deposit up to $10 million in tax revenue from the city into this fund. It appears that some of it will be used to help people purchase their first home.

An Overview Of The Home Buyer Assistance Program

The Home Buyer Assistance Program has been put together using feedback from the local community. All of these recommendations were taken into account when looking at how to remedy the situation. It was clear, across the board, that the priority was housing. Minority communities in the local area have been struggling for decades. One of the ways to help these underserved populations is to provide them with stable housing.

The Home Buyer Assistance Program is going to provide no-interest, forgivable loans that come from the reparation funds. Now, thanks to this program, first-time homebuyers will be able to purchase homes anywhere in the city. The goal of this program is to remedy historical segregation, which will help increase diversity across the city.

Who Is Eligible For The Home Buyer Assistance Program?

The Home Buyer Assistance Program will limit those who qualify for assistance. Some of the key conditions of the program include:

• Applicants must be a resident of African-American descent
• Applicants must have suffered discrimination in some way as a result of the city’s policies
• Applicants must be a direct descendant of someone who lived in the local area between 1919 and 1969 or suffered discrimination in some other way

These criteria are fairly broad and should open the door to plenty of people who can take advantage of the money provided by the Home Buyer Assistance Program to purchase their first home. With the current state of the housing market, there are countless individuals and families in the local area who might be able to move to a safer area of town.

those interested in making their home an attractive option for buyers. Nowhere is this more evident than for homeowners who were former smokers.

While it’s truly commendable to quit smoking, removing the smell of smoke from a home can feel like an impossible task. With that in mind, here are some of the most effective ways to make smoke smell and paint stain removal as effortless as possible.

Make Preparations Beforehand

Cigarette smoke has a nasty habit of permeating through every facet of a home. As such, it can be difficult to pinpoint the areas that are most problematic. Before starting the cleaning process, open all of the doors and windows throughout the home to help it air out naturally.

It’s also worth mentioning that many longtime smokers have difficulty picking up the odor that they’ve become accustomed to. If you know someone that isn’t a smoker, invite them over and ask them to point out any problem areas.

Treat Your Home Like a Quarantine Zone

Unfortunately, a home that is infested with smoke can create a cyclical effect on anything that is washed. If you want your clothing and linens to stop carrying the smell, you’ll need an alternative to your own washer and dryer. Of course, you’ll also need to keep them away from your home for the remaining duration of the cleaning process.

In particular, carpets have a habit of retaining smoke smells long after you’ve quit. With this in mind, taking care of any carpets or curtains in your home should be a top priority.

Account For Deeper Problems

Once you’ve given your home a steam cleaning treatment and washed all of the stained surfaces down with a mixture of water and bleach, you may still discover that some areas of the house are still affected. At this point, it’s time to simply accept your losses and purchase a replacement. A nice smelling home will be far more attractive to buyers than one that inexplicably reeks of smoke.

If you’re unsure of any further steps to take in preparing your home for a sale, don’t hesitate to contact your real estate agent and request more information. Your home deserves a high price for all of the effort you’ve put into cleaning it.

Did you know that dry rot is ironically created from having too much moisture come in contact with wood?

The fact is many homeowners are unaware that dry rot is even setting in, so the first step toward prevention is being able to diagnose possible areas of exposure before dry rot becomes a major renovation expense.

Remember that dry rot to your foundation can be an extremely costly repair and will definitely figure prominently into the total value of your property when a house inspection is completed prior to a sale.

As well, fungus and mold spores can affect the air quality of your home, which is a health problem for not only you and your family but also for prospective buyers.

Identifying Leaks To Your Water Membrane

In a very simple sense, discovering moisture or a leak on a wall or ceiling is an early sign that damage is occurring. Always inspect ceilings for particular evidence, especially around skylights and exhaust piping, as well as heating or cooling ducts. If damage was done to your roofing membrane during an installation or renovation, water can seep through.

Do an inspection of your basement in order to determine if any discoloring is happening to walls or wood. If you can smell mold or mildew, you may have a problem. However, this doesn’t mean that you’re already suffering from dry rot, just that the area is a hazard and should be sealed properly. Deal with the cause of the leak before you proceed to the repair stage.

Replacing The Affected Areas

If you have discovered wood that is either in the process of rotting, or has succumb to some water damage, the best thing to do is simply replace it. Once you’ve sealed the leak that initially caused the damage, discuss with your contractor the scope of the replacement job.

When installing new wood, it’s best to make sure that it’s treated with a Borate wood preservative to prolong its life and resilience to fungal infection. In some cases, you may not need to replace wood at all. You may be able to get away with only cleaning and then treating the area with Boric Acid, a fungicide that will slow down the spread of existing fungus and kill future growth.

Choosing The Right Fungicide And Preservative

This step will depend on the unique needs of your home’s situation. Generally, you have the option to choose between a dry powder and a glycol-based liquid concentrate. While the powder may appear less expensive, it may not do as thorough a job of absorbing deeply into the wood fibers.

Depending on the depth of fungal intrusion, you may need to use the more powerful liquid substance. Both are easy to apply, so you should be able to tackle this task yourself.

Maintaining the quality of your home is essential for keeping up its value when it comes time to sell. Call your trusted real estate professional today for more advice on preserving the value of your investment and identifying areas of risk and exposure to dry rot.

Remember that it’s far easier to deal with problems now before they develop into major expenses down the road.