Home Prices Grow Twice as Fast as Incomes
From REALTOR Magazine
DAILY REAL ESTATE NEWS | MONDAY, MAY 01, 2017
Strong buyer demand this spring is pushing home prices up at double the rate of increase in income growth, The Wall Street Journal reports. The median price of an existing home for all housing types was $236,400 in March, up 6.8 percent from a year ago, when it was $221,400, according to the National Association of REALTORS®. Incomes, meanwhile, increased 3 percent in February from a year earlier, according to the Labor Department.
“Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions, despite the fact that buying a home has gotten more expensive over the past year,” says NAR chief economist Lawrence Yun.
Home prices are nearly 40 percent above where they were at the bottom of the housing crash in February 2012, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. Some markets are seeing even more increases. In Dallas, home prices have surged nearly 53 percent from their low and are now 35.5 percent above their previous high. In Denver, home prices are 59 percent above their low and are 36.5 percent above their previous high.
“It can’t be sustained,” warns David Berson, chief economist at Nationwide Insurance and a former economist at Fannie Mae. “It can’t go on forever.”
The shortage of homes for sale has led to higher prices, economists say. Inventory in March was 6.6 percent lower than a year ago, according to NAR. Further, the level of home construction relative to the number of U.S. households is at its lowest level since the Census Bureau began tracking such data in 1957, according to the Federal Reserve Bank of Kansas City.
“Sellers are in the driver’s seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers,” Yun says. “Buyers are showing resiliency given the challenging conditions. However, at some point—and the sooner the better—price growth must ease to a healthier rate. Otherwise, sales could slow if affordability conditions worsen.”
Source: “Rising Home Prices Stir Overheating Fears,” The Wall Street Journal (April 26, 2017)
4 Landscaping Mistakes to Avoid
From Realtor Magazine
Good landscaping could potentially boost a home’s value anywhere from 6 percent up to 28 percent, according to a Clemson University study of homes in Greenville, S.C.
So that means a bad landscape design could potentially dent a home’s value by that much. And that isn’t chump change; it equates to potentially thousands in lost money just from poor curb appeal.
Realtor.com® recently highlighted several do-it-yourself landscape disasters to avoid:
- Huge Piles of Mulch: Don’t overdo it with the “mulch volcanoes” that pile high over the trunk of a tree. Mulch needs to be applied loosely. “Mulch mounds may look like the norm, but it’s a harmful practice,” says Michael Rittenhouse Rigby, an arborist in central Virginia.
Read more: Planning a Smart Landscape
- Overplanting:Some home owners don’t think through their plantings before they start planting. The result? An overgrowth of plants that quickly become unruly. In general, tall plants should go in the back; small plants in front. Also, avoid planting too many large plants. They may have a tough time taking root. Small foliage, on the other hand, tends to have a better chance at survival.
- Disrupting tree roots:If you end up expanding your home or garage, per se, make sure you maintain a sizable distance from any large trees in the yard or take special precautions to protect the tree’s roots. It can take awhile to see the damage of roots from large trees, but eventually it will show itself. Trees can be costly to remove or cause damage to your home if they fall. Hire a tree specialist prior to any construction projects in your yard.
- Too much gravel:Just like mulch, you can quickly overdo it here. Landscaping with gravel can save water but it reflects heat and can potentially damage even the hardiest of plants, landscapers note. What’s more, gravel may get mixed into the underlying soil and then make it more difficult for plants to absorb rainwater. Use gravel cautiously.
From Realtor Magazine
The U.S. Forest Service Pacific Northwest Research Station says that planting a tree in front of a house increases the home’s sale price by an average of $7,130. So, in essence, money can grow on trees.
Planting a tree on the west side of a home can reduce a home’s energy bills 3 percent within five years and 12 percent within 15 years. Specifically, west-side trees can bring summertime electric bills down by an average of $25 a year and reduce air conditioning use by 30 percent, according to the Forest Service.
Trees and other landscaping can also lower the impact of damaging winds on a home, potentially reducing 35 mph winds to 10 mph, according to the Arbor Day Foundation. This also lessens the load on the furnace working to heat the home on those cold, windy days, which can bring energy bills down by 30 percent.
Additionally, a Clemson University study found that landscaping has the potential to increase the value of homes by about 6 percent. Some of the most desired landscape trends among consumers include: rainwater harvesting, native plants and drought-resistant plants, permeable paving, and fire pits, according to the 2016 Residential Landscape Architecture Trends Survey conducted by the American Society of Landscape Architects.