The Top ‘Lifestyle Factors’ When Home Shopping

If you want to make a sale, selling the lifestyle in a community or neighborhood is becoming an important piece of the presentation of a home, according to a new survey. One in five home owners have moved or would like to move because they don’t think their neighborhood or community is a good fit to their lifestyle, according to a recent survey of more than 1,000 home owners and future home buyers
The majority of those surveyed said they would place more weight on lifestyle factors–such as family-friendly neighborhoods or easy access to cultural activities like museums and music venues–when shopping for a future home. The survey was conducted by Better Homes and Gardens Real Estate LLC and and Meredith Corp.
“While the relation of price to features has become very favorable in many areas throughout the country, ultimately the surrounding community may determine how happy you are with your home purchase,” says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC, which used the survey results to launch a “Lifestyle Search” tool on its web site to help buyers factor in community preferences–such as “arts and recreation” and “family and community”–more in their search.
Here are some of the top lifestyle priorities survey respondents reported they’ll be looking for in their next home:

• Ease of commuting by car: 38%
• Access to health and safety services: 34%
• Family friendly neighborhood: 33%
• Availability of retail stores: 32%
• Access to cultural activities: 21%
• Public transportation access: 19%
• Nightlife and restaurant access: 18%
• Golf friendly area-access to golf courses: 6%

This week in history..."

And last week was indeed one for the record books, between the last minute debt ceiling debate deal, credit rating agency Standard & Poor's decision to downgrade the United State's credit rating one notch from AAA to AA-plus for the first time ever, the Dow Jones plummeting, and home loan rates approaching historic lows once again. Why does all of this matter? Here's what you need to know.
With just hours to spare before the deadline, Congress passed and the President signed the Debt Ceiling/Deficit Reduction Bill last Tuesday, which among other things called for a deficit reduction of $2.4 Trillion over the next 10 years. While this was certainly a good (albeit small) step towards lowering our enormous budget deficit, the uncertainty surrounding the deal combined with continued weak economic reports (including Personal Incomes for June, which grew by the lowest measure since November and Personal Spending, which was at the lowest levels in 2 years) and the credit crisis in Europe caused Stocks to plummet late last week.

Last Thursday was the single worst day for Stocks since October of 2008 and pushed the Dow, Nasdaq and S&P 500 Index into negative territory for 2011. In fact, the Dow has lost nearly 11% after hitting a 2011 high of 12,807 back on May 2. And while it is important for our economy to improve, one result we often see during weak economic times is an improvement in Bonds, including Mortgage Bonds, and therefore home loan rates, to which Mortgage Bonds are tied. Think of it this way: Investors move their money back and forth between Stocks and Bonds, moving their money into the safe haven of Bonds when there is uncertainty or weakness in the economy. That action last week helped Bonds and home loan rates approach their historic best levels once again.

But not all of the news last week was bad for our economy. Friday's Jobs Report from the Labor Department was better than expected, with 117,000 new jobs created during July, above the 84,000 that was expected.and better yet, May and June's numbers were revised higher to add 56,000 more jobs to the former tally! In addition, hourly earnings rose to 0.4% from 0.2% in June, which was a nice increase we haven't seen in quite some time, while the Unemployment Rate fell slightly to 9.1% from 9.2%. The Jobs Report was surprisingly good news, but it is only one report and we need to pay close attention to upcoming economic data. If future reports continue to improve, Bonds and home loan rates could worsen as investors would move their money back into Stocks, which is something we saw a little of late last week.

The bottom line is this: Home loan rates remain near some of the best levels we've ever seen, but about the only thing that is certain in the markets right now is the volatility.

The Heat is On

The title of that Glenn Frey song not only applied to the sweltering temperatures around much of the nation last week, it also applied to the debt ceiling debate, as the heat was on our leaders in Washington to finalize a solution to our debt situation. Why is this important? Read on for details.
It only takes a look at what is happening in Europe these days to understand why it’s crucial that the United States finds a solution to the debt ceiling issue. Not only have eight European banks recently failed a stress test, but last week there was news that Greek, Italian, Portuguese, and French "credit default swaps" (which are insurance policies against default) were trading at record levels. While the European Union is continuing to work to contain Europe’s debt problems and prevent a default in Greece (and elsewhere), these events bode a very important lesson for the US.

Why? Because solving our debt ceiling debate and finding a long-term plan for lowering our deficit and being fiscally sound will raise confidence in our debt and help the US keep its AAA credit rating from the various credit rating firms like Moody’s and Standard and Poor’s. This will help investors continue to see the US as the ultra safe haven for their money, which is a key aspect of our continued economic recovery.

Speaking of our economic recovery, there was some good news last week for the housing sector, as June Housing Starts and Building Permits were both reported better than expected. While this is only one number and one number doesn't make a trend, this is a good figure, and I will be watching closely for follow through in future readings.

Buyers ready to spend on green?

Heating and cooling a home today is not cheap. But neither is purchasing a solar heating system, installing new double-pane windows, or replacing old appliances. For a long time, the high expense associated with "going green" has kept many home owners from embracing energy-efficient features; instead, they've focused on the little things like weather-stripping and using compact fluorescent lightbulbs.
But there are indicators that more and more Americans are seriously considering green construction and adding new energy-efficient upgrades and determining that the cost is worth it.
"Expeditures on energy-efficient home improvements, which have been essentially flat over the last few years, will see a period of strong growth through 2014, reaching about $50.2 billion that year."
says the new Energy Efficient Homes report by Pike Research, a Boulder, Colo., market research and consulting firm focusing on clean technology.

In response to demand, some home builders are rolling out energy labels for new homes which provide estimates of monthly energy costs, triggering a different approach to home-shopping for energy-conscious buyers.

Consumers are "motivated to do the right thing about the environment, but they are also finding they can save money in the long run".

Utility costs may fall by 40% when outfitting a home with features including a solar water heater, Energy Star appliances, a solar oven, R50 insulation in the attic and a water reclamation system.

Over the past year, buyers have expressed concerns about increasing utility costs and some are rejecting homes with two-story great rooms and walls of windows - often costly to heat or cool.

Yes, the cost of going greeen is still an issue for buyers, practitioners say - especially because the upgrades that can cut utility bills by the greatest amounts are also priciest. Solar water heating systems can cost between $1,500 to $3,500 and solar panels can cost $15,000, but when used together, they can drop electricity bills to practically nil.

And that's one reason the price hurdle is getting easier to overcome. With consumer education, more buyers understand the benefit. A recent study by Lawrence Berkeley National Laboratory shows that home owners who install solar panels on their home likely will recoup that investment, and maybe even more, at resale.

Federal tax credits also are helping sway the buyer mind-set, and energy-efficient mortgages are another option to help home owners pay for costly "green" upgrades.

It's easy for homeowners to get overwhelmed with green ideas because there is so much they can do, but they don't have to to everything at once, they can start by picking one or two things, such as solar cooking or composting, give it a try and then add something again later.

Second Homes Hold Steady

Data from the recently released 2011 NAR Investment and Vacation Home Survey shows vacation-home sales accounted for 10 percent of all transactions last year and investment sales were 17 percent of the overall market.

Those figures are unchanged from the 2010 survey. The median vacation-home price was $150,000 in 2010, while the median investment home price was $94,000. The typical vacation-home buyer was 49 years old with a median household income of $99,500 and purchased a property that was a median distance of 375 miles from their primary residence. Investment-home buyers had a median age of 45, earned $87,600 and bought a home within a median distance of 19 miles

Thirty-four percent of vacation-home buyers said they plan to use the property as a primary residence in the future, as did 10 percent of investment buyers.

I’d Rather Grow Smarter!

A recent NAR study reveals Americans favor walkable, mixed-use neighborhoods over those that require more driving. Such "Smart Growth" communities are characterized by shops, restaurants and local businesses in walking distance from homes.
According to NAR’s Community Prefernce Survey, nearly 80 percent of survey respondents look for neighborhoods with abundant sidewalks and other pedestrian-friendly features when searching for a home.
While space is important to home buyers, many are willing to sacrifice square footage for less driving. Eighty percent of respondents would prefer a single-family detached home and a shorter commute, but if that isn’t an option, 60 percent of that group would chose a smaller home if it meant less driving.

"WHAT GOES UP... MUST COME DOWN?"

Gas prices have dropped at the pump lately, but the markets are more focused on movement in the rest of the economy. Here’s a look at where some important economic indicators are headed... and what they mean to you!
 
Fill ’er up... oil’s down! Late last week, crude oil fell under $90 per barrel after the International Energy Agency (IEA) said it would release 60 Million barrels of oil in the coming months to offset the loss of production in Libya.

Lower expectations for economic recovery. The big news last week was the Fed FOMC meeting and the release of the Fed’s Policy Statement. While there weren’t many surprises to come out of the meeting, the Fed did revise its forecast for the 2011 Gross Domestic Product (GDP) lower and acknowledged that the economic recovery is a little slower.

Frustratingly high. On Unemployment, the Fed stated that the pace of job growth is "frustratingly slow" and that it believes the Unemployment Rate will average 8.6% to 8.9% in the 4th quarter of 2011...which is actually higher than earlier forecasts of 8.4% to 8.7%.

Inflation on the rise? The Fed also raised expectations for Core Inflation, which strips out volatile food and energy costs. This is important because if inflation picks up, Bond prices will move lower - since yields have to move higher to attract buyers to compensate them for the pickup in inflation. And that means home loan rates may move higher as well.

Where are Stocks headed? The Fed said the second round of Quantitative Easing (known as QE2) will end as scheduled at the end of June - but there was no mention of a third stimulus package (which would be known as QE3). Their silence on this point was fairly deafening. Many experts have wondered about the possibility of a third round of QE, but it doesn’t look to be in the cards at this point. It’s important to note that the Stock market did not like that there was no mention of QE3, especially since Stocks have only risen the past couple of years when the Fed has been buying - like during both QE1 and QE2. It will be very interesting to see how Stocks behave once the QE2 support is removed.

Misery loves company? Here’s an interesting fact for you. Believe it or not, there’s actually a "Misery Index." This Index takes into account both inflation and the Unemployment Rate. Currently, it’s just slightly below the level seen in December 2009, which is when the economy was still in the midst of the credit crisis. To put this in perspective, we haven't seen the Misery Index this high since 1983. And what is a bit concerning is that the Index has climbed higher each month so far during 2011. With inflation rising higher still and unemployment not ticking down, the upward trend may well continue in the near future.

Better than expected... but what’s the catch? Durable Goods were reported better than expected last week. It wasn’t a blockbuster reading, but it was good news in light of concerns that the economic recovery is slowing. That said, there’s a catch to consider if you or someone you know is looking to refinance or purchase a home. The recent slowdown in the economic recovery has actually helped improve Bonds and home loan rates. But if the slowdown proves to be just a minor bump in the road to recovery and if future reports show modest improvements, home loan rates could move higher rather quickly.

The good news is that home loan rates are still at historical lows, making this a terrific time if you or someone you know might be thinking about purchasing a home. It only takes a few minutes to see if you can benefit from the situation. Call or email to get started.