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Real Estate

How to Determine Your Home’s Value

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You may think that the sale price is the only factor when you are looking at comparable properties and trying to set a price for your home by using competitive market analysis. But it’s actually a bit more complicated than just looking at the price on Zillow.

So how does one come up with that price when putting the property on the market? Here are five things to determine your home’s value that you might not be aware of.

1. New Construction Nearby

Due to low prices for lots and varying prices in home building materials, new homes can actually be cheaper and cost less per square foot than existing homes. If there is a lot of new construction nearby, that can affect the price for your own listing for your house.

2. Renovation

Recently renovated homes typically sell for more than homes that have not been updated in a while. If you have recently upgraded your home–especially sought after upgrades like the kitchen or master bath–your home should be priced appropriately.

3. Developable Lots

Not all lots are created equal. Even if the square acreage is the same, a lot that is easily developable will get a better price than a hilly or rocky lot that needs a lot of preparation.

4. Listing Price vs. Sale Price

Whether sellers actually get their asking price depends greatly on the market. When you are pricing your house, it is important to look at sales prices, not just listing prices. The listing price does not always accurately reflect what a home will sell for.

5. Location

Nearby amenities, safety, schools, and noise levels can vary greatly within a neighborhood. Homes in more desirable parts of the neighborhood will sell for a higher price, all else being equal.

New American Dream Increasingly Involves a Lease, Not a Mortgage

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Renters now rule half of U.S. Cities as more Americans are priced out of the housing market. Bloomberg reported that the American Dream increasingly involves a lease, not a mortgage.

Detroit was once known as a city where a working-class family could afford to own a home. Now it’s a city of renters.

Just 49 percent of Motor City households were homeowners in 2015, down from 55 percent in 2009 and the lowest percentage in more than 50 years. Detroit isn’t alone, of course: The rate of U.S. home ownership fell steadily for a decade as the foreclosure crisis turned millions of owners into renters and tight housing markets made it hard for renters to buy homes. Demographic shifts—millennials (finally) moving out of their parents basements, for instance, or a rising Hispanic population—further fed the renter pool.

Fifty-two of the 100 largest U.S. cities were majority-renter in 2015, according to U.S. Census Bureau data compiled for Bloomberg by real estate brokerage Redfin. Twenty-one of those cities have shifted to renter-domination since 2009. These include such hot housing markets as Denver and San Diego and lukewarm locales, such as Detroit and Baltimore, better known for vacant homes than residential development.

(bloomberg.com)

Landlord Renting Tiny 30-Square-Foot Apartment for $2000 HKD

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Today houses in US are getting larger and the living space per person has doubled over last 40 years. The square footage of living space per person has increased to 980.7 square feet. But in certain high-cost cities it gets crazily expensive to afford a decent living space. In Hong Kong, a 30-square-foot subdivided apartments are renting for $2000 HKD a month (around $250). These subdivided apartments come with toilet, bed and a sink. No kidding!

In a documentary film, reporter from magazine HK01 checked out the listing ads at a rundown low-rise building in the city’s Kwai Chung district and found this 30-square-foot toilet subdivided room.

The tiny apartment includes a toilet with a sink. To increase the quality of life just a bit, the landlord built in a divided wall so you don’t have to sleep right next to the toilet every day. Just be aware that you have to squeeze in your legs if you are over five feet tall to fit in the room while sleeping at night.

No wonder Hong Kong is rated as one of the least affordable city in the world. For some Hong Kong family where entire families live in rooms smaller than your typical kitchen, this tiny apartment might not be that strange. But would you live in this tiny 30-square-foot apartment? Comment below!

Scraping by on Six Figures? Tech Workers Feel Poor in Silicon Valley’s Wealth Bubble

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Even with six-figure income, tech workers in Silicon Valley still feel poor. I didn’t become a software engineer to be trying to make ends meet,” said a Twitter employee in his early 40s who earns a base salary of $160,000. It is, he added, a “pretty bad” income for raising a family in the Bay Area. The Guardian reported: “Silicon Valley’s latest tech boom, combined with a housing shortage, has caused rents to soar over the last five years. The city’s rents, by one measure, are now the highest in the world. The prohibitive costs have displaced teachers, city workers, firefighters and other members of the middle class, not to mention low-income residents. Now techies, many of whom are among the highest 1% of earners, are complaining that they, too, are being priced out.”

‘The American dream is not working out here’

“We make over $1m between us, but we can’t afford a house,” said a woman in her 50s who works in digital marketing for a major telecoms corporation, while her partner works as an engineer at a digital media company. “This is part of where the American dream is not working out here.” (theguardian.com)

Pickings are Slim for Millennials Ready to Buy a Home

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Just as Americans buy homes at fastest pace in a decade, millennials are having a hard time trying to acquire their first homes. The Washington Post reported: “For years, millennials looked at owning a home as a distant fantasy. Student debt and a weak job market seemed to conspire to keep this generation stuck in their parents’ basements, if not permanently locked out of the housing market. But as millennials find better-paying jobs, start families and begin searching for their first homes, they’re encountering an unfortunate reality: Just as they’re finally ready to buy, the housing market has the fewest homes available for sale on record. And those that are for sale are increasingly priced at values inaccessible to first-time buyers. As a result, the housing market is booming for those with cash to spare — but not for millennials looking to own their first home.”

Americans Buy Homes at Fastest Pace In Decade

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After the homeownership rate fell to the lowest in more than half a century, Americans came out with strong sentiments as the economy improves to buy existing homes in January at the fastest pace since 2007. The supply of available homes has now dwindled to record lows. Christopher Rugaber reported: “Steady job gains, modest pay raises and rising consumer confidence are spurring healthy home buying even as borrowing costs have risen since last fall. Some potential buyers may be accelerating their home purchases to get ahead of any further increases in mortgage rates. With few homes available for sale, buyers are pressured to rapidly close a deal as they find a suitable property. The typical house for sale was on the market for just 50 days last month, compared with 64 days a year ago. Strong demand is pushing up median home prices, which jumped 7.1 percent from a year earlier to $228,900.” (usnews.com)

Buying a Home is a Fine Decision, Just Not a Financial One

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The U.S. homeownership rate fell to the lowest in more than half a century as rising prices put buying out of reach for many renters. The homeownership rate reached a peak of 69.2 percent in June 2004, but it has steadily lowered. Buying a home is still a fine decision, just not a financial one. As Taylor Tepper explained on MSN Money: “Homeownership comes with a host of risks, too. You’re sinking a large portion of your savings into an asset that’s expensive to maintain, and may be extremely difficult to sell. People move, jobs change, markets tank, life happens. There’s no guarantee that you’ll want to live in the same area in two years, much less that your family situation will remain constant… The truth is that, for most people, buying a home is as much about sentiment as it is about dollars and cents. Indeed, young renters who aspire to homeownership do so to control their living space, have a sense of privacy and security, and establish a place to raise a family, according to Fannie Mae. They want a home for the freedom it confers. Don’t like those cabinets? Hate the carpet? You can generally do what you please if you’re the owner. You have to pay for that freedom, and it doesn’t come cheap. But it’s worth remembering that whether to rent or buy isn’t a clear-cut decision. And it’s certainly not only about finances. Rather it’s a reflection of your particular desires — which means you should think deeply about what it is you’re after. If you’re looking to leverage your savings to build more money for the future, you could easily end up disappointed. You’re likely to be more satisfied, however, if you’re trying to create something lasting for you and your family.” (msn.com)

Why Land and Homes Actually Tend to Be Disappointing Investments

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Over the long term neither farmland nor housing has been a great place to invest money. Robert Shiller writes on New York Times: “Buy land: They’re not making it anymore. That often repeated adage sounds like good financial advice. But over the long run, it hasn’t been. Despite solid price increases over the last few years, land and homes have actually been disappointing investments.” He went on to show that over the century from 1915 to 2015 the real value of American farmland increased only 1.1 percent a year. With a growing population, that’s barely enough to keep per capita real land value unchanged. Real home prices rose even more slowly over the same period with an average of only 0.6 percent a year. To put this in perspective, the real gross domestic product in the United States grew an average of 3.2 percent a year from 1929 to 2015. That’s a much higher growth rate than for real estate. (nytimes.com)

The Most Unaffordable Place to Live in America is…

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MarketWatch reported: “The most unaffordable place to live in the U.S. is not San Francisco or Manhattan. It’s Brooklyn. A person earning the average salary in Brooklyn cannot afford the average home there — even if he could spend his entire salary (and then some) on housing, according to a survey released on Thursday by real-estate firm RealtyTrac, which looked at home sales price data in 417 of the most populous counties in the U.S. as well as average wage data from the Bureau of Labor Statistics. The second and third most unaffordable places in America are Marin County, Calif. and Santa Cruz, Calif. — both of which would also require the average wage earner to spend his or her entire salary and more to buy the median home in the area.” (marketwatch.com)

A Mobile Home in Malibu Sold For A Record $5.3 Million

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In Malibu, a mobile home recently changed hands for a record $5.3 million. The wealthy owner wished to stay anonymous. Located in the confines of the Paradise Cove Mobile Home Park, the triple-wide mobile home was briefly listed for sale in March for $5.5 million before closing off-market. Set on a bluff overlooking the coastline, the manufactured house has features akin to the typical luxury home in L.A with beamed ceilings, hardwood floors, skylights and a pair of gas fireplaces. (latimes.com)

The One Thing Rich Parents Do For Their Kids That Makes All The Difference

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The one thing rich parents do for their kids that makes all the difference is that “they can buy their children pricey homes in nice neighborhoods with good school districts,” said Emily Badger on The Washington Post. “Wealthy parents are famously pouring more and more into their children, widening the gap in who has access to piano lessons and math tutors and French language camp. The biggest investment the rich can make in their kids, though — one with equally profound consequences for the poor — has less to do with enrichment than real estate.” Ann Owens, a sociologist at the University of Southern California, explained: “Forty to fifty years of social-science research tells us what an important context neighborhoods are, so buying a neighborhood is probably one of the most important things you can do for your kid. There’s mixed evidence on whether buying all this other stuff matters, too. But buying a neighborhood basically provides huge advantages.” (washingtonpost.com)

New Rules Will Make It Harder to Get a Mortgage If You Carry a Credit Card Balance

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Starting June 25 Fannie Mae introduces new rules to make it harder to get a mortgage if you carry a credit card balance. Basically, the new guidelines use trended credit data as a rating system to evaluate borrower’s ability to manage revolving credit card accounts. “A borrower who uses revolving accounts conservatively (low revolving credit utilization and/or regular payoff of revolving balance) will be considered a lower risk. A borrower whose revolving credit utilization is high and/or who only makes the minimum monthly payment each month will be considered higher risk as it indicates the borrower may have trouble making payments in the future.” Kristin Wong on Lifehacker points out that “if you pay your balances in full every month, you’re probably good. If you have a revolving balance, you’re considered a risk, and depending on how much debt you’re revolving, it could prevent you from getting a loan.” (lifehacker.com)

Parents are Pressured to Make Sure Their Kids Succeed

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For middle class earning between $40,000 and $100,000, 44 percent could not come up with $400 in an emergency. 27 percent of those making more than $100,000 also could not. This is not poverty. So what is it? Rebecca Rosen on The Atlantic argues the financial insecurity “that has no name” derived from the costs associated with raising children, especially housing and education. Not surprisingly housing and education the biggest sources of debt. American middle class households are falling into circles of financial hell as they are pressured to make sure their kids succeed. Rosen pointed out that “housing and education appear to be two distinct categories of spending, but for many families they are one and the same: For the most part, where a family lives determines where their kids go to school, and, as a result, where schools are better, houses are more costly. This is both cause and effect: Where houses are expensive, the tax base is bigger and schools have better resources, and where schools are better, there is more demand for housing.” (theatlantic.com)

NYC Most Expensive Apartment Costs a Jaw-Dropping $250 Million

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NYC’s most expensive apartment will be a $250M condo at 220 Central Park South as reported by Tanay Warekar on Curbed. “What’s been touted for months as New York City’s most expensive condo is finally here. Vornado Realty Trust has revealed plans for a four-floor apartment at 220 Central Park South, and it will cost a jaw-dropping $250 million, The Real Deal reports. If it sells for the asking price, it will handily surpass the record set by the $100.5 million sale of a penthouse at One57 last year. The gigantic apartment will be located on floors 50-53 of the Robert A.M Stern-designed building. To create the mammoth offering, Vornado combined a 11,000 square-foot duplex on the 50th and 51st floors along with three apartments on the floors above.”

The 10 Best Suburbs in America For Raising a Family

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The US is very diverse with good and bad suburbs in each state. Finding the best neighborhood to raise a family can be a very difficult decision. To make that process easier for you, Business Insider compiled the list of the best suburbs in America based on cost of living, housing affordability, crime rates, public-school ratings, and proximity to a city center. Here are the 10 best suburbs for raising a family:

  1. New Albany, Ohio: Population of 8,135 with a median household income of $185,076 and Great Schools score of 10/10
  2. Mountain Brook, Alabama: Population of 20,416 with a median household income of $131,281 and a Great Schools score of 10/10
  3. Ladue, Missouri: Population of 8,519 with a median household income of $176,369 and Great Schools score of 7/10
  4. University Park, Texas: Population of 23,460 with a median household income of $173,520 and Great Schools score of 9/10
  5. Atherton, California: Population of 6,993 with the highest median income of $239,886 and Great Schools score of 8/10
  6. Piedmont, California: Population of 10,852 with a median household income of $207,222 and Great Schools score of 10/10
  7. Highland Park, Texas: Population of 8,706 with a median household income of $191,422 and Great Schools score of 8/10
  8. Indian Hill, Ohio: Population of 5,797 with a median household income of $207,069 and Great Schools score of 10/10
  9. Fox Chapel, Pennsylvania: Population of 5,390 with a median household income of $174,924 and Great Schools score of 10/10
  10. Bellaire, Texas: Population of 17,223 with Great Schools score of 6/10

(businessinsider.com)