Flipping Homes in the Luxury Market?

According to a new report by Irvine, Calif.-based RealtyTrac, between July and September of this year, 32,993 homes around the country were flipped. That figure marks a 13 percent decline from the 37,871 house flips recorded for the same three months in 2012. The term refers to the process of buying a home, renovating it and then subsequently selling it again within six months, RealtyTrac explains.

Though flipping has been popular in California, Texas has never been a hot flipping market. And between the third quarters of 2012 and 2013, the rate of flipping declined. All told, 240 homes were flipped during the third quarter of 2013 — marking a 45 percent decline from the 437 homes that were flipped over the same three months in 2012.

From a bigger-picture perspective, the house flipping industry has taken some interesting turns. RealtyTrac reports that a total of 968 homes priced at $750,000 and above were flipped during the third quarter of 2013 — marking a 34 percent jump from the number of homes in this price range that were flipped a year ago. Take a look at these statistics:

Flips on homes priced between $1 million and $2 million increased 42 percent on a year-over-year basis. Flips on homes priced between $2 million and $5 million was up 350 percent.

“Increasing home prices over the past 18 months, combined with decreasing foreclosures, have created a market less favorable to the high quantity of middle- to low-end bread-and-butter flips that we saw late last year and early this year,” explains RealtyTrac Vice President Daren Blomquist. “But the sharp rise in high-end flipping indicates there is still good money to be made for flippers willing and able to take on the additional risk of buying and rehabbing more expensive homes. With that higher risk also comes the potential for higher reward.”

Source: San Antonio Business Journal

Housing Inventory Low in San Antonio

As of September 2013, housing inventory in the Alamo City stood at 4.6 months — a six-year low for the market, according to the latest San Antonio Board of Realtors (SABOR) report. The September report also shows that homes are on the market, on average, 70 days. Of the homes sold, 97 percent were bought at the listing price.

“We have seen our inventory getting smaller and smaller all year, making this more of a competitive market,” says Steven Gragg, 2013 SABOR chairman of the board. “Low inventory could result in sellers receiving multiple bids on homes located in prime locations or being able to sell closer to their asking price.”

In September, the average price of a home in the greater San Antonio area stood at $205,728 — up from an average price of $193,026 last September, and an average price of $189,723 in September 2011.

A total of 2,031 homes were sold over the 30 days ended Sept. 30, 2013, according to the latest SABOR analysis. By comparison, 1,686 sales were recorded last September. Two years ago, 1,576 home-sales were recorded.The median price of a home currently stands at $168,700 — up from $158,400 a year ago, and $154,600 as of September 2011.

“Interest rates have been at historic lows for some time now, allowing many people to take advantage of the opportunity,” observes Angela Shields, president and CEO for SABOR.

Even the slight increases in interest rates have done little to slow down the housing market.“Although the rates have started to inch up, they still remain below five percent, making home buying affordable for a wide range of people,” Shields adds

Source: SABOR and San Antonio Business Journal

Buying in the Luxury Home Market

One-third of consumers with a gross annual household income of $250,000 or more say they are considering the purchase of residential property in the next 12 months for personal use or as an investment

On average, wealthy consumers who say they are in the market for residential property expect that the home they purchase will increase in value by about 14% in the next five years according to the survey by the Luxury Institute for Coldwell Banker Previews International.

Luxury buyers should find better inventories to select from than three months ago according to the Institute for Luxury Home Marketing’s latest market action index, which has the luxury segment retreating to buyers’ market territory after reaching sellers’ market in June for the first time in years.

In the Coldwell Banker survey, on average, the last residential property purchased by wealthy consumers had a purchase price of $1.6 million. On average, affluent consumers with incomes of $400K+ are spending 225.4% more on a residential property than consumers with incomes of $250K to $399K. Affluent consumers with a net worth of $2mm+ are spending an average of 97.2% more than consumers with a net worth of less than $2mm.of those who are not considering a purchase, very few indicate they view the market as risky.

“New York City remains a dominant player in the luxury housing arena and today is being impacted by an infusion of affluent foreigners who recognize the benefits of the stable U.S. economy while also enjoying the status symbol and lifestyle New York offers,” said Budge Huskey, president and chief executive officer of Coldwell Banker Real Estate LLC. “Many plan to hold these properties for the foreseeable future. Interestingly, the high end is mirroring all facets of the city’s housing spectrum with low inventory creating a seller’s market.”

ZIP Codes with the Highest Volume of SALES $10 Million and Up
ZIP Code
City / State
# Sales $10 Million and Up
90210
Beverly Hills, Calif.
18
10023
New York, NY
17
10021
New York, NY
16
81611
Aspen, Colo.
16
90077
Bel Air, Calif. (LA)
12
33139
Miami Beach, Fla.
11
10014
New York, NY
10
10028
New York, NY
10
90265
Malibu, Calif.
10
90049
Brentwood, Calif.
According to the Real Estate Economy Watch, One-third of consumers with a gross annual household income of $250,000 or more say they are considering the purchase of residential property in the next 12 months for personal use or as an investment

On average, wealthy consumers who say they are in the market for residential property expect that the home they purchase will increase in value by about 14% in the next five years according to the survey by the Luxury Institute for Coldwell Banker Previews International.

Luxury buyers should find better inventories to select from than three months ago according to the Institute for Luxury Home Marketing’s latest market action index, which has the luxury segment retreating to buyers’ market territory after reaching sellers’ market in June for the first time in years.

In the Coldwell Banker survey, on average, the last residential property purchased by wealthy consumers had a purchase price of $1.6 million. On average, affluent consumers with incomes of $400K+ are spending 225.4% more on a residential property than consumers with incomes of $250K to $399K. Affluent consumers with a net worth of $2mm+ are spending an average of 97.2% more than consumers with a net worth of less than $2mm.of those who are not considering a purchase, very few indicate they view the market as risky.

“New York City remains a dominant player in the luxury housing arena and today is being impacted by an infusion of affluent foreigners who recognize the benefits of the stable U.S. economy while also enjoying the status symbol and lifestyle New York offers,” said Budge Huskey, president and chief executive officer of Coldwell Banker Real Estate LLC. “Many plan to hold these properties for the foreseeable future. Interestingly, the high end is mirroring all facets of the city’s housing spectrum with low inventory creating a seller’s market.”

ZIP Codes with the Highest Volume of SALES $10 Million and Up
ZIP Code
City / State
# Sales $10 Million and Up
90210
Beverly Hills, Calif.
18
10023
New York, NY
17
10021
New York, NY
16
81611
Aspen, Colo.
16
90077
Bel Air, Calif. (LA)
12
33139
Miami Beach, Fla.
11
10014
New York, NY
10
10028
New York, NY
10
90265
Malibu, Calif.
10
90049
Brentwood, Calif.

Planning Room Sizes in New Homes

How space is distributed in a new home is a frequently asked question.  To collect information on this, NAHB recently surveyed its single-family builder members. The average percent distribution of finished space in the typical new home built by NAHB’s members is illustrated below.
Spaces in New Homes
In addition to an average breakdown of space in all new homes, NAHB looked at the breakdown for a small home (based on averages for homes under 2,000 square feet) and a large home (based on homes with at least 3,000 square feet).

Findings include the following:
Bedroom space accounts for just under 29% of floor space in new homes, irrespective of the overall size of those homes.

Bathroom space is allotted 12.3% of total floor area on average, with more space allocated in larger homes, and less in smaller ones.

The share of space covered by the laundry room—which is present in the vast majority of homes, irrespective of their size—is 3.7% and varies only to a minor extent with the size of the home.
Entry foyers account for 3.4% of the finished area on average.

Kitchens get about 11.9% of the space in small homes, versus 11.1% of the space in larger ones.

Dining areas account for 7.8% of the space in small homes and 7% of the space in larger ones.

The family room accounts for just over 11% of floor space in small, average, and large size homes, while the living room accounts for nearly 12% of the space in the small home and 7.5% in the large one.

Complete details, including tables showing how often builders include various types of rooms in new homes and the size of the rooms in square feet, are available in the October 1 Special Study published by NAHB in HousingEconomics.com.

San Antonio Tops for Global Trade

Global Trade Magazine has named Texas its top state for global trade in the nation. Texas, which has led the nation in exports for the past 11 consecutive years, beat out Florida and California this year for the magazine’s top honor.

 “Over the last 10 years, Texas has built one of the best job creation climates in the nation by committing to low taxes, smart and predictable regulations, fair courts and a maintaining a highly-skilled and educated workforce,” says Texas Gov. Rick Perry. “This combination has not only attracted businesses of all sizes from around the world, it has also given Texas the opportunity to grow and thrive.”

Global Trade conducted a survey that compared production volume of small and midsize companies, which the magazine defined as a firm with fewer than 500 employees. The survey ranked each state by the quality of its infrastructure and regulatory hurdles placed on its companies. “Texas’ success is no doubt a sum of its parts,” Global Trade wrote. “Its excellent infrastructure, its commitment to low regulatory burdens and the wealth of global enterprises already established among its many cities all make the state the undisputed frontrunner for global trade.”

In a separate report, the magazine also named six Texas cities in its top 25 best cities for global trade. Houston took the top spot, followed by San Antonio, Dallas, Corpus Christi, Brownsville and Beaumont.

Source: SA Business Journal

Does My Insurance Cover That?

What does your homeowners insurance cover? The short answer is: “A basic homeowners insurance policy (called HO-1 in insurance lingo) covers your home and possessions if they’re damaged or destroyed by these things:
  • Fire
  • Lightning
  • Windstorm (unless you live in a hurricane zone)
  • Hail (not available everywhere)
  • Explosion
  • Riots
  • Civil commotion
  • Aircraft  (and things falling from aircraft)
  • Vehicles (and things thrown from vehicles)
  • Smoke
  • Vandalism (although some policies exclude this)
  • Malicious mischief
  • Theft
  • Volcanic eruption
But many states don’t allow this basic policy to be sold. Instead, you have to buy an upgraded policy that covers more perils.
 
Upgraded Homeowners Insurance
That upgraded policy (called HO-2) adds protection to your home and possessions from even more perils. You get protection from everything on the HO-1 list (above) plus:
  • Falling objects
  • The weight of ice, snow, or sleet
  • Flooding from your appliances, plumbing, HVAC, or fire-protection sprinkler system
  • Damage to electrical parts caused by artificially generated electrical currents (such as a power surge not caused by lightning). But damaged electronics such as computers aren’t covered.
  • Glass breakage
  • Abrupt collapse (say from termite damage)
That same list applies to the homeowners insurance you buy for a condominium or co-op (except then it’s called HO-6 instead of HO-2). With HO-1, HO-2, and HO-6, what you see is what you get. So if zombies attacked your home, your HO-1 or HO-2 wouldn’t cover the damage because zombies aren’t on the list of specific things those policies cover.

The Most Complete Homeowners Insurance
The most complete and protective form of homeowners insurance (called HO-3) covers you for all perils except some specific ones like:
  • Floods
  • Earthquakes
  • Wars
  • Nuclear accidents
  • Landslides
  • Mudslides
  • Sinkholes
With this policy, if zombies attacked, you’d be covered because zombies weren’t specifically excluded by your HO-3 policy.

What Homeowners Insurance Doesn’t CoverNo matter which basic policy you get, it’s not going to cover everything than can damage or destroy your home. Typical homeowners policies don’t cover:
  • Bad things that happen because you failed to maintain your home (like mold)
  • Hurricanes
  • Floods
  • Earthquakes
  • Mudslides
  • Landslides
  • Sinkholes
  • War
  • Nuclear accidents
  • Sewer backups
  • Sump pump failure
  • Ground movement and holes caused by mining (known as mine subsidence insurance)
  • Pollution
You can buy additional policies to cover some but not all of those perils (a quick Google search didn’t turn up any nuclear accident coverage). And even if insurance is available for the most common natural disaster in your area, you may not be able to buy it if your home has features that make it vulnerable. For example, a home with unrated wood shake roof shingles may be tough to insure in an area where wildfires are common.


Other Things Homeowners Insurance Covers
In addition to covering your home, homeowners insurance also covers four more things:

1. Your outbuildings, landscaping, and hardscaping. If you have outbuildings (like a barn), landscaping, or hardscaping (like fences), your homeowners policy most likely covers those for up to 10% of your policy amount (5% for plants). For example, if you have $100,000 in homeowners insurance and someone drives into your fence, the policy would cover 10%, or $10,000 in repairs.
Sometimes policies exclude damage to outbuildings, landscaping, or hardscaping caused by a particular peril (like wind).

2. Damage or loss of your personal belongings. Your homeowners policy covers your family’s belongings, even when you take them out of the house. If your child heads to college with a laptop and it’s stolen, that’s probably covered by your homeowners insurance policy.

A home insurance policy covers a lot of your personal belongings, but not necessarily everything.
You’ll need additional insurance if you have many expensive items like jewelry, furs, or antiques.
Policies will either state that your personal belongings are insured for replacement cost or cash value.
Replacement cost means that the insurance company will pay the full cost of replacing an item (such as the laptop mentioned above, or a sofa damaged in a fire) once you show a receipt. Cash value means the insurance company will issue you a check for the amount that the laptop or sofa would have been worth when it was stolen or destroyed.

3. Temporary living expenses if your home is so damaged you can’t live in it. When you can’t live in your home, your homeowners insurance covers your living expenses, including hotel bills and meals. But, you can’t live in the hotel forever and eat lobster every night on the insurance company’s tab. Your policy will have limits on how long you stay and how much you can spend.

4. Injuries or accidents at your house. Homeowners insurance coverage includes liability – meaning it covers you when you or your family members cause injuries or damage. This coverage also pays when your dog bites someone (medical payments) or someone falls and injures themselves.
Add an umbrella policy to boost your liability coverage into the millions.


Homeowners Insurance for Older Homes
There’s another kind of homeowners insurance (HO-8) used when your home is so old it would be impossible to replace. It couldn’t be built like the original — that is, new electrical code wouldn’t permit the same electrical, etc. An HO-8 policy covers the same perils as the basic HO-1, but will only pay you the repair cost or market value instead of the replacement value. If your home is old, but not so old that it’s historic, you might want another homeowners insurance coverage. A “law and ordinance” policy covers the cost of rebuilding using today’s building codes. It’s good to have if the building codes have changed a lot (for example, in Florida) since your home was built.

Source: What Does Homeowners Insurance Cover? By: Dona DeZube. Read more articles like this at: http://www.houselogic.com/home-advice/disaster-insurance/what-does-homeowners-insurance-cover/#ixzz2h3ZeLawP. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®

Increase Your Home's Value with Curb Appeal

Clumsy, neglected, and hodgepodge landscaping not only hurts your home’s curb appeal, it can cut the value of your property and make it harder to sell. Real estate appraisers say bad landscaping is a buyer turnoff that can increase the number of days a property languishes on the market, which also hurts prices. “I’ve been with clients who won’t even go into a house because of the bad landscaping    outside,” says Mack Strickland, a Chester, Va., REALTOR® and appraiser. Even more important,bad landscaping is a downer that hurts the way you see and enjoy your home. Don’t let bad landscaping happen to you.  Here are the seven landscaping mistakes that bust, rather than boost, your home’s curb appeal.
 
1. Planting Without A Plan
Some landscaping choices, such as a line of begonias, will last a season; others, like trees, can last a lifetime. So, take time to plan and plot a yard that gives you maximum enjoyment and curb appeal.
For the design challenged, landscape architects are worth the investment ($300-$2,500 depending on yard size). They will render elevations of your future yard, and provide plant lists so you can install landscaping yourself.

2. Too Much Togetherness
Yes, planting in clusters looks way better than installing single plants, soldier-like, throughout your yard. But make sure your groups of perennials, shrubs, and trees have plenty of room to spread, or they’ll look choked and overgrown. Also, over-crowded landscaping competes with itself for food and water, putting the clusters at risk, especially during drought.
Google how high and wide the mature plant will be, and then combine that info with the spacing suggestions on planting labels. At first, garden beds of young plants will look too airy and prairie-like. But within three years, your beds will fill in with room to grow.
Remember: First year it sleeps, second it creeps, third it leaps.

3. Zoning Out
Don’t be seduced by catalog plants that look gorgeous on paper but aren’t suited to your hardiness zone. You’ll wind up with plants that die prematurely, or demand winter covers, daily watering, and other intensive efforts to keep them alive and well.
Check plant labels to see which hardiness zones are best for your plants.

4. More of the Same
Resist the design temptation to carpet-bomb your yard with your favorite plant or shrub, which will create a boring, monochromatic landscape. Worse, your yard will look great when your fave flowers bloom, then will look drab the rest of the year.
Mix things up and strive for four-season color. For example, combine spring-blooming azaleas with summer-blooming roses and autumn-blazing shrubs — such as burning bushes (Euonymus alatus). For winter color, try the red osier dogwood (Cornus stolonifera), a hardy shrub that sports bright-red branches in winter.

5. Refusing to Bury Your Dead
Nothing wrecks curb appeal faster than rows of dead or dying shrubs and perennials. So quickly remove your dearly departed landscaping from your front and side yards.
Spent plants that lived their natural lives are good candidates for a compost pile — if you grind them first, they’ll decompose faster. But if your landscaping succumbed to disease or infestation, it’s best to inter them in black plastic bags, then add to the trash.

6. Weeds Gone Wild
Weeds not only wreck the look of your landscaping, they compete with pricey vegetation for water and food. Weeds also can shorten the life of brick, stone, and pavers by growing in mortar cracks.
The best way to stop weeds is to spread a pre-emergent about three weeks before weed seeds typically germinate. If you can’t stop weeds from growing, at least get rid of them before they flower and send a zillion weed seeds throughout your yard.

7. Contain Those Critters
Deer, rabbits, and other backyard pests think your landscaping is an all-you-can eat buffet, leaving you with denuded branches and topless perennials.
If you’ve got a critter problem:
  • Plant deer- or rabbit-resistant varieties. Your local extension agent can provide a list of green things critters won’t eat in your area.
  • Install an electric fence around landscaping you want to protect.
  • Spray plants with critter repellent. After a hard rain, spray again.
Source:7 Landscaping Mistakes That Wreck Curb Appeal - by Lisa Kaplan Gordon
Read more: http://www.houselogic.com/home-advice/landscaping-gardening/landscaping-mistakes-wreck-curb-appeal/#ixzz2h3Rq5UJj Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®
 

Refreshing Your Garden and Your Curb Appeal

The gardening season is coming to a close, but it’s not entirely over yet. If you’re an avid green thumb, you can still squeeze a little more out of the growing season. Here are some tips on how to get the most out of the end of the year and how to get your garden set up for next year.

Plant Bulbs For Spring Flowers
Fall is the perfect time to plant bulbs like tulips, irises and crocuses, which need a winter freeze to start their growing process. By getting them in the ground now, you will ensure a colorful garden by early spring. For best results, plant bulbs once temperatures are in forties and fifties, but several weeks before the ground completely freezes.

Look for Discounts
Get a jump on next year’s garden by buying gardening equipment, seeds and plants at discounted prices. Many garden centers slash prices in the fall months to move unsold stock. Store seed packets in the freezer to keep them fresh, and keep discount seedlings going indoors until you can replant them next spring.

Repot Overgrown Plants
If a summer’s worth of growth has caused your plants to outgrow their homes, take some time this fall to replant them in larger containers. Dense or compacted soil, poor drainage, or roots creeping out of the bottom of a pot are sure signs that plants are root bound and struggling for more space.

Winter-Loving Plants
Depending on what region you live in, winter doesn’t have to be a dead season. Some hearty plants like kale, lettuce, broccoli and chard thrive in colder temperatures and can even tolerate the occasional frost. As long as snow stays off the ground and the temperatures don’t dip below freezing for too long, these plants will continue to grow, allowing you to garden into the winter months.

Plant Some Quick Growers
September isn’t too late to grow a final crop. Many vegetables can go from seed to table in as little as four to six weeks, giving you vegetables by late October or early November. Radishes can be grown in around 25 days, and some leafy greens like spinach take as little as 40 days to grow, so get in a final few vegetables before the frost sets in.

Plant Shrubs and Saplings
If you plan on adding trees and shrubs to your yard, fall is the best time to do it. By planting these plants in the fall, you’ll give their roots a chance to get established and avoid the withering effects of the summer sun. You’ll want to plant trees and shrubs in the ground a few weeks before the first frost, and if you live in an area with colder temperatures and heavy snows, wrap their  branches and leaves in burlap to protect them from their first winter.

Trim Perennials
Once your garden has gone to seed and perennial plants have run through their life cycle, it’s time to trim them back. Not only will it clean up an overgrown garden, but it will give the plants more energy next year, and limit potential garden problems like powdery mildew or insect infestations.
Fertilize the Lawn

While it might look like your lawn has shut down for the season, a little lawn care in the fall months will guarantee a lush, green garden next spring. Growth slows above the surface in autumn, but beneath the soil, your lawn is still hard at work establishing strong roots. Help it out this fall with a good mix of phosphorus-rich fertilizer, which helps strengthen roots.

Source: Adam Vermymeren (Around the House)