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5 Cutting-Edge Design Trends for 2015

by Melissa Dierks

Courtesy of Realtor Magazine

Innovative marketing techniques, an emphasis on renewable features, and using big data to meet clients’ needs are just a few of the architectural trends that are set to influence real estate in 2015, according to a recent blog post from MIPIM, an organization that hosts a conference that attracts upwards of 20,000 international property professionals. Here are the design trends they think you need to keep an eye on in 2015.

In-Demand Design

Making the Case for Energy-Efficient Homes

21 Hot Housing Trends for 2015

3D Printing: In 2014, the construction firm WinSun Decoration Design Engineering created 10 one-room houses in just 24 hours using 3D printing. This year they topped themselves by constructing a five-story apartment building using recycled materials and a 150-meter printer. The low cost of 3D printing and the emphasis on using sustainable resources has makes it an appealing option for creating affordable housing. For example, a company in Italy recently used 3D printing to build low-cost structures made with mud.  Construction firm Skanska took it up a notch and collaborated with architectural firm Foster + Partners to create a 3D concreate printing robot.

Sustainable and Efficient Design: This year will bring continued interest in energy-efficient and passive design. The passive design movement sets a high standard for ultra-low energy buildings, with a focus on airtight insulation, solar power, and water-saving techniques.

Glass:  According to MIPIM, “Glass from floor to ceiling on the outside of buildings and in between offices has never been more popular. The material transmits natural light, natural heat, is aesthetically pleasing, and creates comfortable living and working conditions.” A recent design report from Gensler echoes the importance of using solar energy by championing the use of glass on the inside and outside of buildings. According to them, glass brings a feeling of community to the workforce, makes offices feel less stodgy, and is cost-efficient and good for the environment.

Treat Yourself:  In residential design, clients are requesting features that focus on relaxation and stress-free living. Spa-like bathtubs, luxurious bathrooms, outdoor kitchens and patios, hot-tubs, and fire-pits are all in-demand right now.  The rise in “boomerang kids” living at home with their parents post-college and elderly family members moving back in with their kids suggests that residential design in the future will have to be flexible.

Big Data: Big data is impacting just about everything these days, and architectural design is no exception. Data can help architecture firms better understand the needs of their clients and can help them build more efficient properties by treating buildings more like living organisms that can be monitored and changed with the evolution of the needs of the clients.

Sources: "5 Innovative Architectural Trends to Watch for in 2015," MIPIM Wordblog (Jan. 26, 2015), "China Has Built a Giant Apartment With a 3D Printer," Curbed (Jan. 29, 2015), "


10 Reasons 2015 Will Rock for Real Estate

by Melissa Dierks

DAILY REAL ESTATE NEWS | WEDNESDAY, DECEMBER 31, 2014

After a slowdown in the market this year, housing analysts and economists have high hopes for 2015. The real estate market is expected to build momentum across the board nest year, mostly because of a strengthening economy.

Here's a recap of some of the real estate forecasts for 2015:

  1. Millennial force: Younger professionals are having more luck in the job market, which is expected to help more of them jump into home ownership in the new year. Overall, employment is on the rise, but jobs for Millennials — particularly those aged 25 to 29 — has risen by 3 percent. That's one percentage point above the nationwide rate. According to some forecasts, Millennials are expected to drive two-thirds of household formations over the next five years. The forecasted addition of 2.5 million jobs next year, as well as an increase in household formation, will likely drive more first-time home buyers into home ownership, according to realtor.com® projections.
  2. Home prices stabilize: The double-digit price increases seen in 2013 have slowed, and more stable growth was the trend in 2014. As investors have retreated from the market, so have the rapid home prices in many markets. Home prices are expected to continue to edge up in 2015, with realtor.com® predicting a 4.5 percent gain. "After two years of abnormally high levels of home-price appreciation in 2012 and 2013, price increases moderated throughout 2014," realtor.com® notes in its 2014 Housing Review. "We are now experiencing increases in home prices consistent with long-term historical performance."
  3. Mortgage rates rising: Interest rates the last few months have been dipping below 4 percent, lowering the borrowing costs of home buyers and refinancing home owners. However, don't expect the low rates to stick around much longer. Mortgage rates are expected to rise next year. Freddie Mac projects mortgage rates will likely average 4.6 percent but inch up to 5 percent by the end of 2015.
  4. Return of the 3 percent down payment: New programs are popping up to help more buyers break into home ownership with lower down payments. In early December, Freddie Mac and Fannie Mae announced conventional loan down-payment programs that will allow qualified first-time buyers to secure a fixed-rate mortgage with a 3 percent down payment. Prior to that, they needed at least 5 percent. Also, "there are many states as well as national programs, which offer grants that range from 1 to 5 percent to be used for a down payment or closing costs," writes Damian Maldonado, co-founder of American Financing Corp., at CNBC. "These easing loan standards will allow more first-time buyers to enter the market."
  5. Housing affordability declines: Affordability for homes, based on home-price appreciation and rising mortgage interest rates, will likely fall by 5 percent to 10 percent in 2015, according to realtor.com® forecasts. However, the decline in affordability could be offset by an increase in salaries next year for many households. "When considering historical norms, housing affordability will continue to remain strong next year," realtor.com® notes in its report.
  6. New-home sales rebound: Single-family new-home starts barely budged in 2014 compared to 2013, and new-home sales remain far from normal levels. But that could finally turn around in 2015. Sales of new homes are expected to rise 25 percent as single-family construction picks up traction in 2015. The National Association of REALTORS® projects single-family housing starts to rise to 820,000 in 2015, which is still below the 1 million historical average. In the latest new-home report,sales dipped 1.6 percent in November, but builders are remaining optimistic heading into the new year. "As the labor market and broader economy continue to strengthen, we can expect the housing sector to gain momentum heading into next year," says David Crowe, chief economist for the National Association of Home Builders.
  7. Foreclosures recede to pre-recession levels: The number of foreclosures is expected to continue to fall in 2015, but expect them to still be elevated in some pockets across the country — particularly in judicial states where foreclosures must wind through the courts. Foreclosure filings have been on the decline for most of this year. From January through November, foreclosure filings fell about 172 percent compared to the same period one year prior, according to RealtyTrac data. "Every month so far this year, we've been down from a year ago," Daren Blomquist, vice president of RealtyTrac, said in a prior report. The only uptick has been in foreclosure auctions, which are up 5 percent in November compared to one year earlier. Foreclosures will likely fall to pre-crisis levels in 2015, Blomquist predicts.
  8. Drop in oil prices will boost housing: Oil prices have plunged 45 percent since June, which could inadvertently provide a lift to the housing market. "Households in the U.S. spend more than $1,800 on energy-related costs annually, and 22 percent of that energy consumption is due to residential real estate," according to CoreLogic's 2015 Housing Outlook. "So while the drop in oil prices typically has been linked to a reduction in driving-related expenses, it clearly also reduced energy-related expenses for residential real estate."
  9. Rent rises to outpace home-value growth: Rents likely will continue to rise in the new year, and an increase in rental costs in 2015 could outpace annual home-price gains. Expect the rental market to remain a "landlord's market" in 2015, with vacancy rates expected to stay below 5 percent in the new year, according to the National Association of REALTORS®. That should lead to demand pushing rents up even higher and keeping them above inflation, notes NAR Chief Economist Lawrence Yun. Apartment rents are projected to increase 4 percent in 2014 and 4.1 percent in 2015.
  10. Stronger economy leads to greater confidence: A stronger economy will likely lead to more demand for housing in 2015. "Overall, the economy finally appears to be gaining enough momentum to help provide the support that the housing market has needed for stronger recovery," Sam Khater, deputy chief economist at CoreLogic, notes in the company's 2015 Housing Outlook. "The combination of stronger employment growth and especially Millennial job growth makes for solid footing for the real estate market. Moreover, the recent drop in oil prices cannot be overstated, because not only does it directly lower the transportation and home energy costs for households, but it also improves consumer confidence. And confident consumers are more likely to spend on big ticket items, which is sweet music to the ears of the real estate market."

By Melissa Dittmann Tracey, REALTOR® Magazine

FHA: Lower Premiums Will Not Cost Taxpayers

by Melissa Dierks

The Federal Housing Administration’s new lower annual premiums on insurance for home buyers will not come at the cost of another taxpayer bailout, Julian Castro, the secretary of the Housing and Urban Development, told CNBC Monday. HUD regulates FHA, which insures home loans with down payments as low as 3.5 percent.

Opening the Credit Box

Smaller Down Payments Lure More Buyers

3% Down Payments May Be Game Changer

FHA Lowers Its Harangued Mortgage Costs

Did Mortgages Just Get Easier to Obtain?

On Monday, the FHA lowered its annual premiums on the loans it insures from 1.35 percent to 0.85 percent. The move is expected to save a typical first-time home buyer about $900 a year.

During the housing crisis, the FHA had raised its annual premiums 140 percent. The rise in premium prices was blamed for sidelining thousands of potential home shoppers. FHA rose its premiums to replenish its capital reserves, which were depleted during the housing crisis due to a high number of defaults.

Last year, FHA regained its financial footing and was back in the black with its financing. But in 2013, the agency did require a $1.7 billion taxpayer bailout.

Lowering the insurance premiums for buyers "is a very prudent step in the direction of providing middle-class families with opportunities for buying a home," Castro told CNBC. "We're not changing who qualifies for an FHA loan. What we're talking about here is affordability.”

FHA’s insurance fund gained about $21 billion in the past few years, mostly attributed to its new borrowers who had stellar credit. If the FHA had not lowered its insurance premiums, the agency stood to lose considerable market share – and jeopardize funding again to the FHA fund. In a move to open its credit box, Freddie Mac and Fannie Mae recently announced that first-time buyers can qualify for loans with down payments as low as 3 percent.

Source: “HUD Boss on FHA Loans: ‘We’re Not Changing Who Qualifies,’” CNBC (Jan. 26, 2015)

Smaller Down Payments Lure More Buyers

by Melissa Dierks

DAILY REAL ESTATE NEWS | MONDAY, JANUARY 26, 2015

Some home buyers are stepping off the sidelines as more lenders require less money up-front on a home purchase.

Recently, more borrowers are able to pay 3 percent or even less of a home’s purchase price to get a mortgage – a big change from when at least 20 percent down payments were practically the norm post-recession.

Opening the Credit Box

3% Down Payments May Be Game Changer

FHA Lowers Its Harangued Mortgage Costs

Did Mortgages Just Get Easier to Obtain?

Additionally, some lenders are luring more home buyers back by waiving mortgage-related fees and even showing more acceptance of allowing down payments to be made by others, such as the borrower’s family members, The Wall Street Journal reports.

Still, borrowers must have good credit scores and a steady income to often qualify for these smaller down payment loans.

In two big moves in recent weeks, the Federal Housing Administration, which insures mortgages with down payments as low as 3.5 percent, announced it is lowering its annual mortgage-insurance premiums on new mortgages beginning Monday. The move is expected to save a typical first-time home buyer about $900 a year. What’s more, Freddie Mac and Fannie Mae recently lowered the minimum down payments they will accept on loans they back from 5 percent to 3 percent.

Lenders have reportedly been lowering requirements on “jumbo” mortgages too -- loans that exceed $417,000 in most parts of the country and $625,500 in more expensive housing markets. For example, PNC Financial Services Group lowered its requirement from 20 percent down for jumbos up to $1.5 million to 15 percent down. Last year, Wells Fargo started allowing down payments of 10.1 percent on jumbo mortgages; previously its lowest down payment on jumbos was 15 percent, The Wall Street Journal reports.

So far, the changes appear to be luring more home buyers. For the week ending Jan. 9, the Mortgage Bankers Association reported that applications for home purchases -- viewed as a gauge of future homebuying activity -- rose to a seasonally adjusted 24 percent from the prior week. The MBA credited most of that jump to the new 3 percent down payment option for qualified buyers, announced by Fannie Mae and Freddie Mac.

However, financial experts urge borrowers to realize the risks that come with making smaller down payments and also ensure they are the best move for them.

Borrowers who make smaller down payments are more at risk of owing more on their mortgage if property values should decline, notes Jack McCabe, a housing analyst in Deerfield Beach, Fla. Also, borrowers likely will have to pay higher costs over the life of the loan – including higher interest rates and usually mortgage insurance. Financial experts urge borrowers to compare costs, including the interest rate, and whether they have to pay any upfront fees to get that rate. Also, in exchange for a low down payment, borrowers often will be required to pay an extra fee for private mortgage insurance if a down payment under 20 percent is made. Often borrowers who have higher credit scores, smaller loan amounts, and fixed-rate mortgages pay less, The Wall Street Journal notes.

Source: “Down Payments Get Smaller,” The Wall Street Journal (Jan. 23, 2015) and “Loan Demand Posts Biggest Leap in 6 Years,” REALTOR® Magazine Daily News (Jan. 14, 2015)

Mortgage Giants Urged to Ease Up on Credit

by Melissa Dierks

The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to explore "alternate" credit-score models and the credit history of the loans they back. The move is part of several efforts by FHFA to ease tight mortgage standards and help more potential buyers qualify for financing.

Opening the Credit Box

3% Down Payments May be Game Changer

FHA Lowers its Harangued Mortgage Costs

Obama Seeks to Jump-Start Housing

FHFA Director Mel Watt has said expanding credit access is an important goal in 2015, but it needs to be balanced against the risk of loan losses. FHFA is the regulator of Fannie Mae and Freddie Mac; the two companies, which were brought under government conservatorship in 2008, purchase more than half of the new mortgages in the U.S. and then package them into securities.

Qualifying for financing has been a big hurdle that has sidelined many potential buyers from the housing market in recent years. REALTORS® continue to cite their clients' financing struggles in qualifying for a mortgage as one of the top causes of derailing transactions, according to the latestREALTOR® Confidence Index, reflecting responses of more than 1,800 REALTORS® about their transactions in November.

To open the credit box, FHFA also is urging Fannie and Freddie to increase counseling services for buyers who are trying to qualify for a mortgage or who are in early delinquency on their loan. Housing counseling can help entry-level borrowers break into the housing market, FHFA says. The regulator also urged the mortgage giants to increase their purchases of loans backed by manufactured housing.

Such goals will help "build a strong, vibrant national housing finance market, which will create new home ownership and rental opportunities for existing and potential borrowers," Watt said in a statement.

At the end of 2014, FHFA made moves to expand credit availability, including offering loans through Fannie and Freddie that require down payments as low as 3 percent. FHFA also has ordered the GSEs to begin paying into the affordable housing fund, allocating millions of dollars a year to allow states and other government agencies to build low-income rental housing or rehab existing housing in an effort to increase affordability.

Source: “Fannie, Freddie Must Study ‘Alternate’ Credit Scoring: Regulator,” Reuters (Jan. 14, 2015) and “Fannie and Freddie Directed to Aid Underserved Borrowers in 2015,” Bloomberg (Jan. 14, 2015)

12 Small Ways To Travel More This Year

by Melissa Dierks

   

By

 

 

We often trick ourselves into thinking of travel as a big-time event -- and the truth is, you're not always going to have thousands of dollars to fund a plane ticket, hotel room and dozens of meals out. But you are always going to have wanderlust, and there is a way to cure it without breaking the bank or sucking up all your vacation days.

So this year, we resolve to travel more, in smaller ways. A trip doesn't have to cross continents, span oceans or even leave the house to be a healthy, inspiring adventure that leaves you totally refreshed. Make it a goal to try one of these each month in 2015, and make it your most well-traveled year yet.

1. Spend one night under the stars (in your backyard, at a campground, on the beach... anywhere!).
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2. Take an hour-long drive to a different city, and go out to dinner.
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3. Plan a weekender at the nearest beach.
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4. Roll out the map, point to a country with your eyes closed, and research a traditional meal to cook for dinner.
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5. Go to the touristy spots in your hometown... sometimes we forget why they're famous in the first place.
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6. One sunny day, vow to completely unplug and spend every minute outdoors.
hiking

7. Make a travel piggy bank, and add your change to it every day.
piggy bank

8. Spend a Sunday in your city's top-rated Yelp coffee shop.
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9. Design a scavenger hunt around your town, and set your friends loose on a Saturday.
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10. Take a vacation day, even if you're not going anywhere (because honestly, we don't use them enough).
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11. Spend the night in a nearby B&B.
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12. Go on a local yoga retreat, or treat yourself to a day at the spa. You deserve it!
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Smaller Remodeling Jobs Get Better ROI

by Melissa Dierks

With home-price gains slowing in most parts of the country, sellers will be looking for ways to get top dollar for their listing. Cleaning and staging make a big difference. But for some sellers -- such as investors seeking to bring a property up to neighborhood standards before the sale -- remodeling work may be the ticket.

As the 2015 Remodeling Cost vs. Value Report makes clear, large-scale jobs aren't likely to return sellers their full cost. But there are improvements worth doing in anticipation of an upcoming sale. Some will return almost 100 percent of their cost. Others may not have as great a payback, but they can improve the market position of the property in relation to the competition. (Think about the impact of beautiful kitchen photos on online home shoppers.) In addition, several pricier projects can provide owners with a few years of enjoyment while still offering a decent payback down the road.

Find out which remodeling projects get you the most bang for your buck.

A Second Chance at First Impressions

by Melissa Dierks

As a real estate professional, you make your living working with people — and making that crucial good first impression is always the most important step. If you've had encounters that made you wish you could do them over, there's good news: You probably can — and you'll have fewer of these encounters, too.

Imprinting Impressions

5 Ways to Improve Your Vocal Impact

How to Take a Good Head Shot

Relationship Management: Get Emotional

Writing in the Harvard Business Review, researcher Heidi Grant Halvorson offers the encouraging insight that "errors in reading people are highly predictable, because perception is governed by rules and biases we can identify and anticipate." As you accomplish those tasks, it's "possible to ensure that you’re making the right impression more often, and to correct any misperceptions that others have about you."

Halvorson explains that we evaluate new people in two phases: an initial assessment as your new contact assesses you quickly based on factors like appearance and body language. "In phase two—if there is a phase two—the perceiver has to work a lot harder," Halvorson says, "paying closer attention, gathering disparate data, and making sense of it to draw informed, thoughtful conclusions about you."

They accomplish that through three "lenses," Halvorson says: the trust lens, which assesses your warmth and your competence; the power lens, which determines your usefulness to them; and the ego lens, which defines the hierarchy of the people.

To create a good impression in this second phase, then, Halvorson says to project warmth and competence; demonstrate that you're instrumental to their goals; and be modest and inclusive. But what if you've already made a misstep?

Overcompensate. "Keep piling it on until your perceiver can no longer tune it out," says Halvorson, "and make sure that the information you’re presenting is clearly inconsistent with the existing ideas about you."

You can also make people want to revise their opinions of you, she says. Among the techniques you can follow:

  • Activate the desire to be fair.
  • Make yourself necessary.
  • Seize the right moments.

"You need to think strategically about encouraging and incentivizing them to see you in the best possible light," Halvorson concludes. "If you do, then it is really never too late to make the right impression."

FHA Fee Cuts Likely to Lure More Buyers

by Melissa Dierks

FHA Fee Cuts Likely to Lure More Buyers

Last week, the Federal Housing Administration announced it will cut its annual mortgage insurance premiums, likely resulting in about $900 in savings for borrowers and potentially opening the door to thousands of new buyers. But there are no further FHA fee reductions under consideration, Julian Castro, secretary of the U.S. Department of Housing & Urban Development, told a crowd at the National Press Club on Tuesday.

Read more: FHA Lowers its Harangued Mortgage Costsand Obama Seeks to Jump-Start Housing

The FHA decided to reduce its annual mortgage insurance premium fees from 1.35 percent to 0.85 percent because its Mutual Mortgage Insurance Fund for single-family programs was “back in the black.” In his speech, Castro cited National Association of REALTORS® research that estimated that nearly 400,000 creditworthy borrowers were being priced out of the housing market in 2013 due to the high premiums. 

“We expect our premium reduction to help more than 2 million borrowers save an average of $900 annually over the next three years,” Castro told the crowd. “It will also encourage nearly a quarter-million new borrowers to purchase their first home.”

Castro discounted criticism that the reduction in rates will lead to fueling loans to irresponsible borrowers and mark a return of the housing crisis. The lending environment is still too tight and a “sensible balance” is needed between overly relaxed standards and those that are too stringent, Castro said.

“Our nation is smart enough to heed the lessons of the past without forsaking our future. … The answer isn’t to deny responsible Americans home ownership — it’s to do it right,” Castro told the crowd.

Despite the rate reduction, FHA premiums will remain 50 percent higher than precrisis levels.

“This premium change only makes an FHA loan more affordable for qualified families,” Castro said. “All other FHA requirements will remain the same, including verification of a person’s ability to pay. Families still have to qualify for an FHA loan, but when they do, they will find a more affordable path to home ownership waiting for them.”

Provided by: Realtor Magazine

The Days When the Most Closings Occur

by Melissa Dierks

Fridays and the last business day of the month tend to be the busiest for closings, according to the National Association of REALTORS®. Researchers at NAR analyzed the top closing days of 2014 based on existing-home sales data.

Get Closer to Closing

Clearing the Closing Hurdles

Help Your Buyers Reduce Closing Costs

Get First-Timers to Closing

The top seven closing days in 2014 were:

  1. Mon., June 30
  2. Fri., May 30
  3. Fri., Aug. 29
  4. Wed., April 30
  5. Thurs., July 31
  6. Tues., Sept. 30
  7. Fri., Feb. 28
  8. Fri., June 27
  9. Fri., Oct. 31
  10. Fri., Aug. 15

"Spring and summer days figure prominently in the top of the list, but all seasons are represented," researchers note on NAR's Economists' Outlook blog.

The data confirms that, based on existing-home sales data, June and July were the top months for home sales in 2014, followed by August and May. June and July alone accounted for more than 20 percent of the sales that occurred in 2014.

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Melissa Dierks
The Regal Team of RE/MAX Professionals
7111 W Bell Road, Suite 101,
Glendale AZ 85308
Direct: (623)229-0154
Office: (623)643-1092
Fax: (623)201-7562

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