Like many people during the past couple of years, Don Ó Donnacháin and Will Leal Gonçalves realised they could do their work just about anywhere.
Don, who teaches at Queen’s University Belfast, and Will, a trainee chef, moved to Dublin when more employees began to log in to their offices remotely during the pandemic.
The mountains, the coast, the mountains and the scenery — and of course the idea of a new way of life.
“The series gives the buyers a chance to explore the surroundings, take advice from locals and professionals, and decide if the reality lives up to the dream.”
Presenter Tessa Fleming meets Don and Will in the first episode, to be aired on Monday evening. “The couple love the west of Ireland so we brought them to west and north Connemrara for its spectacular mountain and lake views,” she says.
They begin the search in the Gaeltacht area of Carna, about 50km west of Galway city. The cameras follow the couple as they explore doer-uppers and properties with room if not for a pony then perhaps for a few goats and hens.
- Episode One will be broadcast on RTÉ One on Monday, June 27, at 8pm and will also be available on the RTÉ Player
Some buyers tend to choose better properties because of their emotional connect with them and the liveability factor. They are just as important as investors
Some buyers tend to choose better properties because of their emotional connect with them and the liveability factor. They are just as important as investors
It is often thought that people who buy homes for their personal use are not too interested in the property’s potential to appreciate in value. These buyers, usually referred to as ‘end-users’, simply want a safe and comfortable place to live; only investors are interested in price appreciation.
This is unacceptable. If people merely wanted homes to live in, renting homes would be enough for them. They would not put all or most of their savings into making a hefty down-payment on a house, and then commit to paying EMIs for anything between 10-20 years.
Who is more serious about property purchases? When Indians buy homes, they make investments like investors do — even if they do not intend to make money out of the property. An owned home is not just a ‘status symbol’ — it is also a precious asset that can be borrowed against or even sold for a profit in the future. It is the ultimate investment even for so-called ‘end-users’ because it does not sit in a demat account or bank locker, but is actively used even as it becomes more valuable. This is why, just like gold, real estate is bought at auspicious times during the year. Of course, ensuring the family’s wellbeing is a significant consideration when purchasing a home on auspicious days. This is why so many Indians try to buy high-value assets, including real estate, during these festive times.
In this respect, both ‘end-users’ and investors have the same objectives. ‘End-users’ also desire the value of a property to go up once they have purchased it. But there are also critical differences between the end-user and investor approach to property purchase. Like in the case of gold, investors want to buy good properties at the lowest possible price so that the price appreciation is better and faster. They purchase properties from a pure profit motive, which surely does have advantages in the case of gold and stocks.
Where dreams come true
Many investors own multiple properties and keep them until their prices have appreciated enough. But end-users tend to choose better properties precisely because of their emotional connection with them. For them, a home is not just a tradeable commodity to rent out and then sell. It becomes an extension of the family, reflecting its values, desires and life concerns.
Investors often do not study the immediate neighbourhood to determine if it is suitable for children to grow up and elders to spend their golden years in peace and comfort. They will mainly study price trends and look at the neighbourhood as a future ‘target clientele’. What is the average purchasing power of the area today, and what is it likely to be five years from now? They will think of the current and upcoming infrastructure primarily as an ‘ultimate selling proposition’.
End-users will consider the neighbourhood and infrastructure from a much more serious and personal perspective. Is it immediately usable and advantageous? How much can a public transport node help save money on daily commuting? How is the air quality now, and can it deteriorate in the future? Will their children and elders be able to make good friends here and participate in exciting activities?
Investors are usually more interested in the area’s development potential. How soon will it reach saturation so that prices will begin to rise? End-users look at the same pace of development and wonder if there are enough green spaces to support the family’s health in the future as well. And, whether there is a possibility for the open spaces to be built up later.
Wanting this assurance, they will often buy a home in an integrated township where the entire development plan is legally committed and designated open spaces cannot be consumed by more development. They buy township properties because, as a family, they want the assurance of round-the-clock water and electricity supply and a school and hospital nearby. They picked highly liveable properties which have vastly superior resale values.
Liveability vs. profitability
Investors will often not see properties through the lens of such liveability but instead focus on potential profitability based on organic price growth in the area. Investors often sell homes they may have visited only a couple of times since they bought them. When end-users finally sell their homes, they put properties on the market that have passed the liveability test.
The fact that they have lived there for a long time is proof for the buyer that the property and location tick all the right boxes. Unlike investors, they will not sell their homes at break-even or even loss-making prices if the business requires cash flows.
Far too often, the difference between ‘end-users’ and investors is seen as the difference between amateurs and professionals. Nothing could be further from the truth. Families buy their homes with far more care and planning than investors do. They are the most serious buyers who examine every detail of a home before they make their final choice.
The writer is Chairman, Pharande Spaces.
8 Sandpiper Court in Toronto.The Print Market
The reality of a swift and dramatic change in the Toronto-area real estate market is sinking in for sellers and buyers.
“It’s crazy how different it has become in only a matter of months,” says Pritesh Parekh, a real estate agent with Century 21 Legacy in Toronto. “The February peak is a conversation topic now. In February, it was just another month of ridiculous prices.”
Most of the chatter these days revolves around interest rates, he adds.
“Everyone you talk to is an economist.”
Properties in the Greater Toronto Area are still selling but potential buyers are more circumspect.
“The prevailing sentiment is that prices have cooled off. ‘If I wait until September, they will cool off even more.’”
Mr. Parekh notes that there is one cohort of buyers eager to sign a deal: people armed with a pre-approved mortgage that they negotiated in the spring at a lower interest rate than rates currently on offer.
With its latest hike on June 1, the Bank of Canada has lifted its benchmark rate by 125 basis points in the past four months. Fixed mortgage rates have been steadily climbing. As a result, Mr. Parekh believes the market downturn will likely steepen.
“I think we’re going to need a few more months. We haven’t seen the full force of interest rates,” he says.
The home was listed in May with an asking price of $3,199,888.The Print Market
Farah Omran, economist at Bank of Nova Scotia, reports the Toronto market remained in “buyers’ territory” for the second month in a row in May. While the number of new listings has dropped in the past three months compared with the same period last year, sales have dropped by a much larger amount over the same stretch.
On a national basis, sales fell for the third consecutive month in May, pushing many markets into balanced territory, Ms. Omran points out.
“The rate hikes were meant to remove some of the exuberance from the market, which they are doing – admittedly, however, they are doing so at a much faster pace than previously anticipated,” the economist says in a note to clients.
While Canadian households increased their net wealth to record high levels during the pandemic, they have also increased their liabilities, with mortgages taking up a larger share of these liabilities, she adds.
Ms. Omran says the sense of urgency that is dissipating in buyers may be creeping up on homeowners who purchased another home before selling their existing property. People who bought when the market was at a fever pitch would not have had the chance to make the purchase conditional on the sale of their current home. They may now be rushing to sell and feeling pressured to accept bids below asking.
Andre Kutyan, broker with Harvey Kalles Real Estate Ltd., says the number of properties sitting on the market has swelled in some family-friendly neighourhoods in Toronto as agents try to find an asking price that will entice buyers.
In areas such as Bedford Park and Ledbury Park near Avenue Road and Lawrence Avenue West, Mr. Kutyan sees some houses listed with an attention-getting asking price and an offer date. Often the strategy fails. Many have been listed multiple times at various prices, he says.
It has 4,752 square feet of living space on a cul-de-sac in the Donalda neighbourhood.The Print Market
“When you don’t know how to price it, that’s how you get into trouble out of the gate. They go up and down like a yo-yo.”
Inventory has typically been so tight in Ledbury Park in the past that houses were often snapped up with bully offers before the offer date. As of mid-June, 18 properties were listed for sale on the Multiple Listing Service in the range between $2.5-million and $4.5-million. About 25 were listed in a similar price segment in nearby Bedford Park.
Many sellers still have their heads stuck in the first quarter, says Mr. Kutyan, and failed offer nights make buyers even more hesitant.
“It further pushes the perception that the market is falling.”
Mr. Kutyan stills sets an “aggressive” price, meaning he hopes for more on offer night, but he has noticed a change in the tactics of buyers. In June, he listed a four-bedroom house with 3,800 square feet of living space and a swimming pool on a pie-shaped lot with an asking price of $2.295-million. After seven days the house at 12 Paris Court in North York sold with seven offers for $2.757-million.
In late May, he listed a three-bedroom house at 8 Sandpiper Court with an asking price of $3,199,888. The home, with 4,752 square feet of living space on a cul-de-sac in the Donalda neighbourhood, had been renovated by a prominent Toronto-based architectural firm. It sold for $3,952,000.
While the properties sold at hefty premiums, Mr. Kutyan notes buyers are not as resolute as they were earlier this year. In some cases, the offers were nearly identical, so Mr. Kutyan gave the frontrunners an opportunity to increase their bids. He found many had a substantial sum tucked in their back pockets.
“In the past they would put their best foot forward out of fear of not getting it, or not getting a second chance. Now they’re fearful of spending too much.”
The home sold for $3,952,000.The Print Market
For those who have an existing property, Mr. Kutyan is recommending that they sell before buying the next one.
“I haven’t advised this in a very long time,” he says.
Looking ahead to the fall, industry watchers are waiting to see if listings swell. Homeowners have so far not been rushing to sell, says Mr. Parekh of Century 21, but more economic pain or fears of falling prices might prompt some to list.
Meanwhile, agents are reporting that some buyers who signed a sales agreement at the market peak are asking for an abatement in the price from sellers. Some deals fall apart all together and appraisals are falling short as prices slide.
“There are some messy situations out there,” Mr. Parekh says.
He has heard of scenarios where a property sold at a rich price in February, only to have the bank’s appraiser value it for less than that amount at closing two or three months later.
The buyer is then on the hook to make up the difference.
“The bank has the advantage of saying ‘we no longer want to take the risk of that February price’ – and they have the power,” he says. “Nobody thought about that when prices were going up, up, up.”
There are also buyers who are straining to pay their mortgages with the recent run-up in inflation. He recently heard from one young man who received cash from his family for a down payment and purchased a $600,000 condo unit with his girlfriend in 2021. But they are talking to Mr. Parekh about selling because they feel weighed down by the cost of the mortgage, taxes and monthly maintenance fees. Now, they’re paying more for food, gas and other living expenses.
“It’s been less than a year,” Mr. Parekh says. “Now they’re really struggling.”
The couple has a mortgage with a five-year term, he adds, and there are often costly penalties that come with getting out of such a loan.
“It’s not child’s play,” Mr. Parekh says. “It’s so expensive to break a five-year fixed.”
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Washington, D.C., June 21, 2022 (GLOBE NEWSWIRE) —
Key Highlights
- Existing-home sales declined for the fourth straight month to a seasonally adjusted annual rate of 5.41 million. Sales were down 3.4% from April and 8.6% from one year ago.
- At $407,600, the median existing-home sales price exceeded $400,000 for the first time and represents a 14.8% increase from one year ago.
- The inventory of unsold existing homes rose to 1.16 million by the end of May, or the equivalent of 2.6 months at the current monthly sales pace.
Existing-home sales retreated for the fourth consecutive month in May, according to the National Association of Realtors®. Month-over-month sales declined in three out of four major U.S. regions, while year-over-year sales slipped in all four regions.
Total existing-home sales,[1] https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. Year-over-year, sales receded 8.6% (5.92 million in May 2021).
“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist Lawrence Yun. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.”
Total housing inventory[2] registered at the end of May was 1,160,000 units, an increase of 12.6% from April and a 4.1% decline from the previous year (1.21 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, up from 2.2 months in April and 2.5 months in May 2021.
“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” Yun added. “Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially – almost doubling – to cool home price appreciation and provide more options for home buyers.”
The median existing-home price[3] for all housing types in May was $407,600, up 14.8% from May 2021 ($355,000), as prices increased in all regions. This marks 123 consecutive months of year-over-year increases, the longest-running streak on record.
Properties typically remained on the market for 16 days in May, down from 17 days in April and 17 days in May 2021. Eighty-eight percent of homes sold in May 2022 were on the market for less than a month.
First-time buyers were responsible for 27% of sales in May, down from 28% in April and down from 31% in May 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 2021[4] – reported that the annual share of first-time buyers was 34%.
All-cash sales accounted for 25% of transactions in May, down from 26% in April and up from 23% recorded in May 2021.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in May, down from 17% in April and 17% in May 2021.
Distressed sales[5] – foreclosures and short sales – represented less than 1% of sales in May, essentially unchanged from April 2022 and May 2021.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.23% in May, up from 4.98% in April. The average commitment rate across all of 2021 was 2.96%.
Realtor.com®‘s Market Trends Report in May shows that the largest year-over-year median list price growth occurred in Miami (+45.9%), Nashville (+32.5%), and Orlando (+32.4%). Austin reported the highest growth in the share of homes that had their prices reduced compared to last year (+14.7 percentage points), followed by Las Vegas (+12.3 percentage points) and Phoenix (+11.6 percentage points).
Single-family and Condo/Co-op Sales
Single-family home sales declined to a seasonally adjusted annual rate of 4.80 million in May, down 3.6% from 4.98 million in April and down 7.7% from one year ago. The median existing single-family home price was $414,200 in May, up 14.6% from May 2021.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 610,000 units in May, down 1.6% from April and down 15.3% from one year ago. The median existing condo price was $355,700 in May, an annual increase of 14.8%.
“Declining home purchases means more people are renting, and the resulting rent price escalation may spur more institutional investors to buy single-family homes and turn them into rental properties – placing additional financial strain on prospective first-time homebuyers,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “To counter this trend, policymakers should consider incentivizing an inventory release to the market by temporarily lowering capital gains taxes for mom-and-pop investors to sell to first-time buyers.”
Regional Breakdown
Existing-home sales in the Northeast climbed 1.5% in May to an annual rate of 680,000, falling 9.3% from May 2021. The median price in the Northeast was $409,700, a 6.7% rise from one year ago.
Existing-home sales in the Midwest dropped 5.3% from the previous month to an annual rate of 1,240,000 in May, slumping 7.5% from May 2021. The median price in the Midwest was $294,500, up 9.5% from one year before.
Existing-home sales in the South declined 2.8% in May to an annual rate of 2,410,000, down 8.4% from the previous year. The median price in the South was $375,000, a 20.6% jump from one year ago. For the ninth consecutive month, the South recorded the highest pace of price appreciation in comparison to the other three regions.
Existing-home sales in the West slid 5.3% compared to the month before to an annual rate of 1,080,000 in May, down 10.0% from this time last year. The median price in the West was $633,800, an increase of 13.3% from May 2021.
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
# # #
For local information, please contact the local association of Realtors® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.
NOTE: NAR’s Pending Home Sales Index for May is scheduled for release on June 27, and Existing-Home Sales for June will be released on July 20. Release times are 10 a.m. Eastern.
Information about NAR is available at nar.realtor. This and other news releases are posted in the newsroom at nar.realtor/newsroom. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab.
[1] Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
[2] Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).
[3] The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.
The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.
[4] Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.
[5] Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.
Dig for Victory was the slogan in World War II. And now, Dig to Survive could be apt during the cost of living crisis, with the price of food spiralling.
Which explains, in part, why an increasing number of people are looking to find homes with space to grow their own fruit and veg.
Allotments are being snapped up countrywide as soon as they become available and, according to research by Savills, a fifth of their estate agents ranked a vegetable patch as the number one outdoor amenity sought by buyers.
Going green: A cottage with fruit and vegetable beds. Savills says a fifth of its estate agents rank a vegetable patch as the number one outdoor amenity sought by buyers
‘We are seeing a new cohort of young people — often with children — who took up gardening in lockdown and want to create bigger vegetable patches now they are still working part-time from home,’ says Nick Ferrier, director of Jackson-Stops, Midhurst.
‘They are not doing it for the money. They see it as a way of getting back to basics, sharing an interest with their children and helping with their education.’
Genevieve Harris, 39, has made a fabulously productive garden from the overgrown jungle that once surrounded her 15th-century house, Sowdens, in Udimore, East Sussex (now for sale for £1.5 million, phillipsandstubbs.co.uk).
She sought help on her iPhone. ‘I gathered an Instagram following of almost 70,000 and it was a great way of getting advice,’ says Genevieve, whose Instagram is @mrs_trufflepig.
‘They talked me through creating a meadow and countless other things, such as using raised beds.’
Growing your own is unlikely to make you a fortune but it can provide a handy side-income.
Rayner Peett, 59, grows everything from apples to chillies on his two-acre garden in Narberth, Pembrokeshire. ‘We freeze fruit and vegetables for use throughout the year,’ says Rayner, who works in marketing. ‘I barter what I have left over for eggs with my neighbours, or sell it in the local farm shop.’
Rachel and Howard Miller have also created a productive garden in the ten years they have lived in The Coach House, Colsterworth, Lincolnshire, which is for sale at £850,000 (fineandcountry.com).
As well as growing tomatoes, potatoes and fruit, they have planted a small orchard. ‘Someone in the village makes cider from our apples,’ says sales executive Rachel, 58. ‘I sell chutneys, apple sauce and hoisin sauce.’
Vegetable gardens don’t only enhance the value of country houses. Housebuilders are making vegetable patches the focal point of their new developments.
West Carclaze Garden Village is one of the most imaginative building projects under construction today. Built around the china clay tips outside St Austell, Cornwall, it will have allotment space allocated for each of the 1,500 new homes there, as well as communal allotments run by the local community in St Austell.
Fruit trees will line the pavements and the developer, Eco-Bos, has even produced a cookery book with local chef James Strawbridge.
West Carclaze will span 500 acres, with 350 of those left undeveloped as a country park. There will also be five lakes and 12 miles of trails.
‘It’s all about creating a sense of community,’ says Dorian Beresford of Eco-Bos. ‘We think the social interaction in the allotments will foster friendships.’ Prices start at £187,000 for a two-bedroom apartment at West Carclaze. About 169 homes should be finished by next year and building will continue for another eight years.
A similar philosophy is behind St Mary’s Hill, a brand new village of 44 two, three and four-bedroom homes in Hampshire’s Test Valley, between Hurstbourne Priors and St Mary Bourne.
There is a village green and residents can grow their own produce in the communal ‘kitchen garden’. There is even a ‘welly boot exchange’ where families can swap their Wellington boots. Prices start at £320,000 for a two-bedroom cottage.
Although veg patches aren’t the prettiest part of a garden, 39 per cent of Savills agents believe they add value to a home. Not that they are solely about making a profit.
‘It is so relaxing,’ says Rayner in Pembrokeshire. ‘You can feel the stress just draining away while you garden — and of course the produce tastes far better than anything you can buy.’
PHOENIX – Developers provided an update this week about the rebirth of Scottsdale’s Papago Plaza as a retail and dining destination.
Scottsdale-based Pivot Development, which acquired Papago Plaza in 2015, said it’s keeping the name of the now-demolished Pueblo-style shopping center at the intersection of McDowell and Scottsdale roads.
“Pivot planned the redevelopment to reflect the quality deserved for nearby Papago Park, ASU SkySong and the neighborhood surrounding the site,” Lee Mashburn, president of the development company, said in a press release Thursday.
“The project establishes a restaurant and retail destination not currently found in south Scottsdale.”
The 13-acre property was rezoned for residential use in December 2018. About 3½ years later, a new five-story apartment complex with 276 units called SEVENTYONE15 McDowell is now leasing.
Three buildings for restaurant and retail use are in the works and expected to open in the second quarter of 2023. A hotel and grocery store are also under construction.
“Papago Plaza is already generating a reputation as a new ‘foodie’ destination and as a magnet for new concepts. The tenant interest has been incredible,” Judi Butterworth, leasing agent with Orion Investment Real Estate, said in the release.
The smallest of the restaurant/retail buildings, at 5,825 square feet, will replace the existing Wells Fargo bank building on the southwest corner of McDowell and Scottsdale roads.
The other two buildings, one 8,000 square feet and the other 11,200 square feet, will be separated by a grassy “restaurant park” area.
The metal Kachina from the original Papago Plaza signage from the 1960s will be used in one of six murals on the buildings.
The new development will have room for nearly 200 parking spaces in a two-story garage along with about 150 surface parking spots.
“We have responded directly to the requests of the neighborhood by attracting engaging restaurant concepts and a quality grocer and ensuring that Papago Plaza is walkable and easily accessible,” Mashburn said.
The Federal Reserve increased the key interest rate hikes in an effort to address the record-high inflation. But how does this impact homebuyers?FEDERAL RESERVE:The central bank announced a rate increase of .75% on Wednesday. It’s the first time since 1994 that the Fed has raised the rate that much. The three-quarter-point hike brings the federal funds rate to between 1.5% and 1.75%. The federal funds rate dictates what it costs for banks to borrow money from each other. And generally, higher interest rates typically mean it’s more expensive for consumers to get a mortgage, obtain a loan to buy a vehicle, and to carry a balance on a credit card.Following this announcement, experts anticipate consumer spending will decrease and the demand for goods — one of the drivers of inflation — will slow down.The Federal Reserve’s announcement comes during a time when the United States is seeing an extremely low inventory of houses and prices for homes are climbing.So what is it like to sell and buy a home in the current market?REAL ESTATE EXPERT:WXII 12 News talked with Thomas Maier, office manager for Berkshire Hathaway Home Services Carolinas Realty in Winston-Salem, on Wednesday. He’s worked in the real estate industry for 16 years.He said the current listing of houses in the greater Winston-Salem area is currently down 12% compared to the first five months of 2021. The current active inventory, he added, is down roughly six percent compared to May of 2021.Despite the rising interest rates, Maier said the demand to purchase homes still remains strong.Maier shared there is a seven-month supply of homes available, identical to May 2021. “If not another home hit the market here locally in our greater Winston market, we would be sold out in a matter of 21 days. We would be totally out of houses,” he said.The median sales price in May 0f 2022 was $284,450 — an all-time high, and is more than 20% higher than May of 2021. The average sales price in May of 2022 was $312,984 — another record high.If a house was accurately priced and there were no price adjustments, it would be on the market for only seven days — an all-time low, Maier said. Maier added that it’s currently a seller’s market. While high-interest rates may dwindle the buyer’s pool, he said the demand to buy homes is still too great.”The rates haven’t gotten high enough that it’s necessarily stopping people from buying homes because the demand is so low,” he shared. “Even if there’s less buyers in the market, the amount of inventory that is out there is still creating a demand for these houses.”Maier said many factors are impacting the housing market, including companies, hedge funds, and private equity firms that are purchasing houses. He said these firms typically are able to deliver a larger offer compared to other personal buyers — which greatly impacts a buyer’s ability to purchase a home, especially first-time homebuyers.”My fear is that some of the institutional investors are driving prices up at a rate that are making some of our affordable neighborhoods less affordable,” he said.As home mortgage rates approach or hit six percent, Maier said the rate is still considered not too high — compared to rates in the past.”In ’82, rates were 18%. When I got into the business in 2007, they were 6.5 percent. And people said they were historically low. I think we have been living in a false reality that three to four percent rates are the norm. I personally believe we’ll never see that in our lifetime again, maybe the fours,” Maier said.However, the main driver that’s causing the steep housing prices is the low housing inventory the nation is facing, Maier said.”There is such low inventory. People are having to throw these ridiculous offers to get a home. And each time they do that, they’re setting a new plateau for that neighborhood and that affects the next buyer that wants to make an offer,” he said.HOMEBUYER AND HOME SELLER: To better understand how the current housing market and interest rates are impacting people who are actively buying or selling a house, WXII 12 News talked with Ben Beason.Beason and his family are moving to Winston-Salem after they have sold their first home in Charlotte in January.Beason said his family bought their house in Charlotte during the pandemic with a 2.75% mortgage rate.When his family decided to sell their house, he said they had 60 showings and received 20 offers above their asking price.”We had a blast selling,” he said. “It’s kind of disorienting going from that to buying — to the complete opposite end. It’s wild. It’s stressful.”Beason’s experience when it came to buying a home was a complete 180.Beason said he and his wife saw mortgage rates climb significantly higher in a span of several months.”The first interest rate we got when we moved to Winston-Salem four months ago, until now, it significantly went up. Our monthly payment from what it would have been if we bought when we first to now is significantly more,” he shared.Beason said while Winston-Salem houses were priced cheaper than houses in Charlotte, Winston-Salem had “so low inventory. We would go through a few weeks with nothing we would see on the market that we’d like.”Beason and his wife had considered holding off.”Do we need to rent until things cool down? And then there’s the question, are things ever going to cool down?” Beason said.But they found more clarity in their questions.The Beasons are expecting to close on a house in Winston-Salem next month.
WINSTON-SALEM, N.C. —
The Federal Reserve increased the key interest rate hikes in an effort to address the record-high inflation. But how does this impact homebuyers?
FEDERAL RESERVE:
The central bank announced a rate increase of .75% on Wednesday. It’s the first time since 1994 that the Fed has raised the rate that much.
The three-quarter-point hike brings the federal funds rate to between 1.5% and 1.75%. The federal funds rate dictates what it costs for banks to borrow money from each other. And generally, higher interest rates typically mean it’s more expensive for consumers to get a mortgage, obtain a loan to buy a vehicle, and to carry a balance on a credit card.
Following this announcement, experts anticipate consumer spending will decrease and the demand for goods — one of the drivers of inflation — will slow down.
The Federal Reserve’s announcement comes during a time when the United States is seeing an extremely low inventory of houses and prices for homes are climbing.
So what is it like to sell and buy a home in the current market?
REAL ESTATE EXPERT:
WXII 12 News talked with Thomas Maier, office manager for Berkshire Hathaway Home Services Carolinas Realty in Winston-Salem, on Wednesday. He’s worked in the real estate industry for 16 years.
He said the current listing of houses in the greater Winston-Salem area is currently down 12% compared to the first five months of 2021. The current active inventory, he added, is down roughly six percent compared to May of 2021.
Despite the rising interest rates, Maier said the demand to purchase homes still remains strong.
Maier shared there is a seven-month supply of homes available, identical to May 2021.
“If not another home hit the market here locally in our greater Winston market, we would be sold out in a matter of 21 days. We would be totally out of houses,” he said.
The median sales price in May 0f 2022 was $284,450 — an all-time high, and is more than 20% higher than May of 2021. The average sales price in May of 2022 was $312,984 — another record high.
If a house was accurately priced and there were no price adjustments, it would be on the market for only seven days — an all-time low, Maier said.
Maier added that it’s currently a seller’s market. While high-interest rates may dwindle the buyer’s pool, he said the demand to buy homes is still too great.
“The rates haven’t gotten high enough that it’s necessarily stopping people from buying homes because the demand is so low,” he shared. “Even if there’s less buyers in the market, the amount of inventory that is out there is still creating a demand for these houses.”
Maier said many factors are impacting the housing market, including companies, hedge funds, and private equity firms that are purchasing houses. He said these firms typically are able to deliver a larger offer compared to other personal buyers — which greatly impacts a buyer’s ability to purchase a home, especially first-time homebuyers.
“My fear is that some of the institutional investors are driving prices up at a rate that are making some of our affordable neighborhoods less affordable,” he said.
As home mortgage rates approach or hit six percent, Maier said the rate is still considered not too high — compared to rates in the past.
“In ’82, rates were 18%. When I got into the business in 2007, they were 6.5 percent. And people said they were historically low. I think we have been living in a false reality that three to four percent rates are the norm. I personally believe we’ll never see that in our lifetime again, maybe the fours,” Maier said.
However, the main driver that’s causing the steep housing prices is the low housing inventory the nation is facing, Maier said.
“There is such low inventory. People are having to throw these ridiculous offers to get a home. And each time they do that, they’re setting a new plateau for that neighborhood and that affects the next buyer that wants to make an offer,” he said.
HOMEBUYER AND HOME SELLER:
To better understand how the current housing market and interest rates are impacting people who are actively buying or selling a house, WXII 12 News talked with Ben Beason.
Beason and his family are moving to Winston-Salem after they have sold their first home in Charlotte in January.
Beason said his family bought their house in Charlotte during the pandemic with a 2.75% mortgage rate.
When his family decided to sell their house, he said they had 60 showings and received 20 offers above their asking price.
“We had a blast selling,” he said. “It’s kind of disorienting going from that to buying — to the complete opposite end. It’s wild. It’s stressful.”
Beason’s experience when it came to buying a home was a complete 180.
Beason said he and his wife saw mortgage rates climb significantly higher in a span of several months.
“The first interest rate we got when we moved to Winston-Salem four months ago, until now, it significantly went up. Our monthly payment from what it would have been if we bought when we first to now is significantly more,” he shared.
Beason said while Winston-Salem houses were priced cheaper than houses in Charlotte, Winston-Salem had “so low inventory. We would go through a few weeks with nothing we would see on the market that we’d like.”
Beason and his wife had considered holding off.
“Do we need to rent until things cool down? And then there’s the question, are things ever going to cool down?” Beason said.
But they found more clarity in their questions.
The Beasons are expecting to close on a house in Winston-Salem next month.
SEOUL, June 13 (Reuters) – Young South Koreans are buying homes in defiance of sharp rate rises that has once again put the spotlight on a severe housing shortage, complicating President Yoon Suk-yeol’s plans to ease a property affordability crisis in Asia’s fourth-biggest economy.
Oh Ye-seul, a 26 year-old who works at a start-up firm in Seoul’s posh Gangnam district, is the sort of individual who finds little or no sway in Yoon’s pledges.
In March, when Yoon swept to power amid anger over his predecessor Moon Jae-in’s failures to tame runaway home prices, Oh bought an apartment at a price slightly under 600 million won ($466,236), about half an hour’s subway ride from her office.
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Such purchases, which an increasing number of young Koreans are pursuing, are being made despite rapid interest rate hikes by the Bank of Korea and suggest the public remain sceptical of Yoon’s vow to ease an affordability crisis that has eluded successive administrations. read more
Moreover, it also raises broader economic implications as mortgage rates have spiked to nine-year highs, adding to strains on households saddled with the world’s highest debt loads and a global surge in prices for everything from petrol to food to consumer items.
While much of the buying is being fuelled by the fear of missing out on a property due to soaring prices, the risk down the road is of a sharp housing correction, and consumption downturn.
“The continued snapping up of homes by young people is coming at a time when interest rates are rising fast, so consumption could be hit as many will be forced to cut back on their living expenses,” said Park Sung-woo, an economist at DB Financial Investment.
“South Korea’s household debt is reaching some dangerous levels, and we need to see a slowdown in homebuying and mortgage growth to ease that risk.”
Total debt held by South Korea’s households, worth $1.5 trillion or 104% of country’s gross domestic product, is higher than any other 35 countries tracked by the Institute of International Finance.
WEALTH CREATOR
For now, though, many young Koreans continue buying property even as the BOK is expected to lift borrowing costs further on top of its 125-bps of rate hikes delivered since August.
Yoon has pledged to relax loan curbs and supplying 2.5 million apartments to ease an acute shortage of property, including loosening loan-to-value (LTV) restrictions from July. read more
But buyers like Oh, who have pushed up the proportion of Seoul home buyers in their 20s and 30s to 43% in April, up for a second month from 36% in February, are not prepared to wait. In Seoul’s central districts of Jongno, Gwanak, and Seongdong, more than half of the buyers were from the age group.
Real estate is one of the biggest wealth creators for South Koreans, with 73% of total household assets invested in property as of 2021, government data showed.
Oh considers herself lucky to have secured a mortgage with a state-run lender that offers cheap, fixed-rate loans to first home buyers.
The poor performance of domestic and global stocks, with the local benchmark KOSPI (.KS11) down 15% year-to-date, has also provided an extra incentive for Koreans to invest in a property.
Oh said she wasn’t overly worried about a housing correction, adding “there will be even more demand from first-time buyers for small-sized apartments like my own once borrowing regulations ease.”
In fact, a May BOK survey showed South Koreans remained largely optimistic about property prices for the next 12 months.
Such attitudes to home purchases will be a test for Yoon’s government, which is trying to tame a red-hot market where average apartment prices have doubled to more than a million dollars in metropolitan Seoul during Moon’s five-year term even as household incomes have failed to keep pace. read more
That has made home ownership unaffordable for many, especially first-home buyers, with data from one of the nation’s largest commercial banks KB Bank suggesting it now takes 19 years to buy an average apartment in Seoul for an average wage earner.
For Yoon, the promise to supply millions of apartments is facing practical hurdles, especially as soaring global inflation has sharply lifted construction costs and is slowing down many other planned projects. Moon’s administration didn’t acknowledge the housing shortage until late in his five-year tenure.
“For President Yoon, it will be tough to restore trust from young people on his policy initiatives, because previous policies caused them to feel left out from property market gains,” said Lee Da-eun, an analyst at Daishin Securities.
($1 = 1,286.9000 won)
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Editing by Shri Navaratnam
Our Standards: The Thomson Reuters Trust Principles.
House buying has followed the same pattern since Rightmove began more than 20 years ago: as soon as you want a new home, you scour the internet. But not any more.
While most properties on sale are still publicised online, a growing number are on what some estate agents call ‘the hush market’ — it’s a secretive process with no For Sale signs, no property details printed, no pictures in agents’ windows, and no entry on Rightmove.
It’s all because of the current house buying frenzy.
Hush hush: Desirable homes are taking longer to sell on the open market so an increasing number of sellers are turning to the so-called hush market
Demand exceeds supply, and values are rising 10.5 per cent a year, according to data this week from the Halifax House Price Index, which shows a typical UK home hitting an all-time high of £289,099.
As a result, sellers know that they will almost certainly find a buyer, and quickly, especially if their home is in a popular area and has the must-haves of 2022 — three or four bedrooms, outside space, working-from-home potential and good transport links.
So instead of having to publicise their homes with all-guns-blazing — exposure online and in the local property papers — these sellers are relying on their agents having a waiting list of so-called ‘preferred buyers’.
These are would-be purchasers who do not need a mortgage, may well be renting to make the move more quickly, and are willing to pay over the odds to get the home of their dreams.
They will already have made friends with local estate agents, preferring personal visits to show their enthusiasm to buy, rather than relying on emails, calls or WhatsApp messages.
Agents are creating waiting lists of so-called ‘preferred buyers’
Agents have a nickname for such buyers — the Hot-To-Trots. James Greenwood of Stacks Property Search, a buying agency, says: ‘During the pandemic vendors were reluctant to conduct unnecessary viewings.
‘Off-market selling then became the norm.
‘Now, as demand has risen, vendors have found they are able to achieve well in excess of the asking price without having to go on the open market.’
His Stacks colleague, Emma Barkes, who works with buyers in the Cotswolds, has an example of just how frantic the normal market has become and why some sellers may prefer a more secretive approach.
She says: ‘A three-bedroom cottage with a small garden came onto the market earlier this year in Charlbury — a good small town near Chipping Norton with a train station — at £900,000. There were more than 70 viewings.’
Before the pandemic, off-market sales were mostly for the high-end seller with an expensive property who wanted to dip a toe in the water.
If their asking price was too high, but without any publicity, they would not lose face if they failed to find a buyer.
Buyers have been willing to pay a premium to secure their home off-market, and prevent sellers from marketing the property openly
Aneisha Beveridge, Hamptons
But this year the off-market craze has extended to more mainstream homes according to research from the estate agency Hamptons.
It says that so far in 2022, more than one-in-ten homes has sold off-market with the average sale price of £858,000.
And agents took an average of 42 days to find a buyer, compared to 65 days for homes more widely publicised.
Aneisha Beveridge, head of research at Hamptons, says: ‘Selling off-market has become an increasingly established sales strategy.
‘And it has paid off. Buyers have been willing to pay a premium to secure their home off-market and prevent sellers from marketing the property openly to other interested parties where competition is rife.’
But not everyone believes that off-market selling gets the best price for the seller, especially in a busy market.
Some agents believe wider competition created by extensive publicity will fuel competitive bids from rival buyers, pushing the eventual sale price well above the original asking figure.
For example, one agent, who wishes to remain anonymous, says a pretty but run-down farmhouse in Cornwall was put on the public market last year for £600,000.
The South-West was hectic with city folk wanting to flee the pandemic and within just two weeks the property was sold to a London buyer who paid over £1 million to use it as a second home.
That may be bad news for local people priced out of their area, but it shows that the glare of publicity can sometimes create a buzz around a property, pushing up the sale price.
But whichever way a home is publicised, there is growing evidence that the housing market is coming off the boil at long last.
Russell Galley, author of this week’s Halifax index, says: ‘Mortgage activity has started to come down and, coupled with the inflationary pressures currently exerted on household budgets, it’s likely that activity will start to slow.
‘With overall buying demand down compared to last year, we may be past the peak sellers’ market.’
And with that peak passed, so the off-market sales phenomenon may ease as well.
‘With the number of homes on the market forecast to rise later in the year, buyers are likely to be more cautious about paying a premium in the face of an increasing amount of choice. If this happens, off-market sales may retreat,’ says Aneisha Beveridge.
So there may be just a short time left for ambitious sellers to try the technique.
Complete any outstanding odd jobs, declutter the living room, plump up the cushions and get ready for viewings — just don’t let the estate agent tell anyone who isn’t Hot-To-Trot…
SALT LAKE CITY — The national inflation rate may have hit a 40-year-high last month, but it was down in Utah by less than a half of a percent. Despite that decrease, however, Utah’s 9.4% inflation rate is still higher than the national rate of 8.6%.
University of Utah Economics Professor Dean Baker says that might be in large part because of the Utah housing market.
“Housing is a big component, about 30% of the overall consumer price index,” Baker told KSL NewsRadio. “What we’re seeing is that people are moving here because they can. They can work remotely and are moving from high-cost areas.
“That’s driving up prices here,” Baker said.
And he thinks the working from home trend in Utah and across the country will continue.
The nation’s inflation rate hit 8.6% in May. That was the highest increase since 1981.
Strong population and job growth are also factors in Utah’s high inflation rate.
If people are holding their breath, hoping that housing and rental prices will go down – Baker said that’s not likely.
“I think Utah’s going to continue to see certainly more rapid house price growth, as well as rental growth than the rest of the country and maybe more rapid inflation growth in other areas,” Baker said. “But that (housing) being the biggest factor and the difference.”
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