REAL ESTATE

City Living Costs Families Up to $9,000 More a Year Than Suburban

Urban living has its perks, but they come at a cost: It turns out families spend $9,073 more a year to cover basic living expenses in the city than in the suburbs, according to a new analysis from Zillow and Care.com. Those costs include mortgage payments, property taxes and child care.

The urban-suburban disparity varies considerably depending on the metro area.

In the New York City metro area, families spend $71,237 more a year to cover living expenses in the city than in the suburbs. That’s nearly $6,000 extra each month. In Chicago, the city costs $18,472 a year more, and in Dallas, it’s $14,128 extra.

For some metros, the opposite is true. The cost of living in the suburbs of Philadelphia, for example, is $13,849 a year less than living in the city. In Baltimore, living expenses in the suburbs are $10,790 less, and in Cleveland, they’re $9,034 less.

Home costs are a big part of the equation. Nationally, the median property taxes and mortgage payments on an urban home totals more than $22,000 a year, which is $7,000 more than the median homeowners would spend on a suburban home.

Lower child care costs in the suburbs can offset the mortgage and taxes. In Minneapolis, for example, the annual cost of housing is similar between urban and suburban areas, at just under $15,000. But in the suburbs, families with two children can save $4,119 a year on a child care center or $1,759 a year on a nanny.

Most homeowners live in the suburbs, with just 23 percent choosing urban settings, according to the Zillow Group Housing Trends Report. Millennials lean more heavily toward city living (33 percent), but nearly half of them live in the suburbs — where they are making their mark by opening high-end restaurants and other businesses.

Check out more insight into metro-level child care data from Care.com.

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Source: zillow.com

Why May Is the Magic Month for Home Sellers

When it comes time to sell a home, every seller wants the same outcome: to sell quickly, for as much money as possible.

According to a new Zillow analysis, listing a home toward the end of spring significantly increases a seller’s chances of making this happen.

In all but five of the country’s 25 biggest metro markets, the best month to put a home on the market is April or May. Homes listed in the first half of May sold nine days faster and for almost 1 percent more money than average listings. (You may have even better luck if you’re in one of the best U.S. markets for home sellers.)

The low supply of homes on the market has pushed the ideal window later in the spring. Many shoppers who start searching for a home in early spring may need to look at several homes and make multiple offers, and may still be shopping a few months later.

By May, some buyers will be anxious to avoid more disappointment or eager to get settled into a new home before the next school year – and will be more willing to pay a premium to close the deal.

The May sales boost was particularly notable in Seattle and Portland where sellers who listed in the first half of the month stand to gain the biggest price boost – 2.5 percent in Seattle, 2 percent in Portland – over the area’s average.

On the other end, typically warm weather regions like Miami, Tampa and Phoenix tend show very little variation in sales price or time on market based on listing months. Sellers in these markets will find themselves with more flexibility in choosing when to sell their home.

To apply this analysis to their own home, sellers can use Zillow’s Best Time to List tool to estimate how much listing timing will influence the final sale price in their neighborhood. Registered Zillow users access the tool by clicking the “Sell Your Home” tab on the home details page of their home, and obtain valuable information to pair with the expertise of a local real estate agent when determining the best time to put their home on the market.

Here’s a look at ideal times for listing in some of the top U.S. metros.

Thinking about selling? Check out our Home Sellers Guide.

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Source: zillow.com

San Francisco Is Best for Home Sellers, Baltimore for Buyers

Owning a home in San Francisco comes with 99 problems, but selling ain’t one.

Among the problems: San Francisco’s median home values are among the highest in the country, topping $800,000, according to Zillow Research. The city is cold and foggy in the summer, as Mark Twain noted. You also have to keep an ear to the ground for earthquakes.

But when it comes time to sell, you can’t beat San Francisco. Its homes are listed on Zillow for just 51 days on average, and only 5.4 percent of listings take price cuts — making it the best market for sellers in 2016.

The top markets for buying have the inverse situation: more days listed and greater price cuts.

By those measures, the best market for buying is Baltimore, where listings spend an average of 104 days on Zillow, and 12.7 percent of listings take a price cut.

Here’s a look at the top 10 markets for selling and buying.

Many of the metros on the top markets for sellers list have seen huge influxes of newcomers, sending home prices into the stratosphere. Portland had the fastest rising home values in 2016 — up 13.8 percent.

Six of the 10 top buyers’ markets have home values that are appreciating more slowly than the national average — which in 2016 was 6.8 percent. For example, Baltimore home values rose less than 4 percent during 2016.

Home inventories also play a role. Markets with more homes going on the market — for example, Miami, where 14.6 percent more listings hit the market in December 2016 than a year earlier — often lean toward buyers. Miami is the second-best buyers’ market, based on listing days and percentage of listings with price cuts.

However, Boston — No. 10 on the top markets for selling list — saw a 21.6 percent drop in listing inventory in December 2016 from the prior year.

If you’re trying to buy in a hot market, take heart: Most experts in a recent Zillow survey said they expect the overall housing market to switch from a sellers’ market to a buyers’ market in 2018 or 2019 as the market begins to slow.

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Source: zillow.com

Boston Tops the List of Best Metros for Love

While people who buy homes are typically married — in 2015, married couples represented almost 60 percent of home buyers — the share of unmarried couples buying homes together has been on the rise.

The power of two incomes, along with changing social norms, helped catapult their share of the home buying market to 14.6 percent in 2015, from 11.2 percent a decade earlier. (At the same time, singles are losing ground, dropping from 30.6 percent to 25.4 percent of the market from 2010 to 2015.)

We can’t be sure these unmarried couples are romantically involved — but for those who are, the economics of home buying appears to play a role in getting them together. Which brings us to Valentine’s Day, and the best 10 metro areas for finding love.

There are options all over the country, but the top two — Boston and New Orleans — offer a nice contrast in scenery and climate.

Looking for someone to snuggle with amid all the snow and freezing temperatures in Boston? You’re in luck!

A whopping 66 percent of the people who live in the Boston area are single, helping make it one of the country’s best metro areas for love. With a median income of $25,000, those singles also have a little dough to spend at Boston’s 159 places to date per 10,000 people.

So pull on that parka and grab a hot toddy! Beantown awaits with an apartment like this one, which rents for $2,300 a month — just $29 below the average for a single in the Boston metro area (with roommates):

However, if frigid temps and Paul Revere are just not your thing, cast an eye toward warmer climes — because the second-best metro for love is balmy New Orleans.

In the Big Easy, 59 percent of residents are single. Compared with Boston, they have fewer date spots — just 51 per 10,000 people — but the ones they have are world class: music venues on Frenchmen Street, gorgeous parks everywhere you look, and, of course, the quintessential year-round party that is Bourbon Street.

Singles in the New Orleans metro area earn a median income of $17,000 a year and pay median rent of $1,388, which would put you in a nice place like this one:

Whether love is in the air or not, these are metros that singles — and everyone — can cherish.

Related:

Source: zillow.com

Big Game Hometowns Square Off on Housing

While we wait to see Sunday which football team wins the season, here’s a telling snapshot of how Atlanta and Boston match up when it comes to homes.

Atlanta, sometimes known as “Hotlanta” for its lively nightlife and steamy summer temperatures, is wide open down the middle of the field with housing affordability. Its homeowners spend 11.7 percent of their incomes on mortgages, and its renters spend 25.5 percent of their incomes on rents.

Although Bostonians spend a greater share of their incomes on housing — 21.3 percent for homeowners and 34.3 percent for renters — they muscle their way through with gorgeous, historical housing stock.

This Boston duplex, for example, is a touchdown for anyone who loves the charm of 1800s interiors. The price tag: $5.49 million.

Not to be outdone, Atlanta offers its share of gracious living. Here’s a $3.2 million condo that’s quite a catch. Built in 2008, it offers the high ceilings and detailed woodworking that call to mind an earlier time.

Both these homes are well outside the median value in their metro areas, based on the Zillow Home Value Index. The median home value for the Boston metro area (population 4.6 million) is $412,300, while the median for the Atlanta metro area (population 5.3 million) is $173,300.

Rents are a different story. The median rent in Boston is $2,329 a month, compared with $1,333 a month in Atlanta.

Here’s a 1-bedroom apartment in Boston with 11-foot ceilings and a rooftop pool for $2,300 a month:

And here’s a $1,350 a month 1-bedroom apartment in Atlanta that’s near downtown and offers a community pool:

Whether the Falcons or the Patriots win on Sunday, both metros come out winners in the housing arena.

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Source: zillow.com

Nashville Tops the List of Hottest Housing Markets for 2017

In the same year renting becomes more affordable and the homeownership rate bounces back from historical lows, the country’s housing market superstar will be — drumroll, please — Nashville!

Music City has moved beyond its country roots to become a fast-growing economy with employment by the healthcare industry and big corporate names including Nissan, Randstad and Kroger — plus the popular chain of diners, Shoney’s.

Home appreciation is expected to rocket in Nashville this year by 4.3 percent, while incomes recently grew by 1.1 percent and unemployment is a healthy 4 percent.

Nashville is followed in housing market hotness by Seattle; Provo, UT; and Orlando on Zillow’s list of hottest markets for 2017.

“These hot markets are experiencing change as more people discover them,” said Zillow Chief Economist Svenja Gudell.

Zillow’s economic predictions for 2017 include a warning about a possible worsening of labor shortages for new construction if President-elect Trump follows through on his hard-line stances on immigration and immigrant labor.

Other predictions for the year ahead:

Cities will focus on denser development of smaller homes near public transit and urban centers.
More millennials, who made up more than half of first-time buyers in 2016, will become homeowners this year, increasing the racial and ethnic diversity of homeowners overall.
Rental affordability will improve as incomes rise and escalating rents slow.
The share of people driving to work will increase for the first time in a decade, as homeowners move into the suburbs for more affordable housing.

For more insights into U.S. real estate and rentals, check out the Zillow Group Report on Consumer Housing Trends.

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Source: zillow.com

Get a Black Friday Deal on a Home in These 10 Metros

‘Tis the season to be shopping, and if you’re in the market for a home, you may have less competition for listings while everyone else is in a post-Thanksgiving stupor — or at the mall.

That doesn’t mean you have to forego Black Friday-style discounts.

Below are the 10 metros where you’ll find the greatest share of listings with a recent price cut, as of September 2016.

Topping the list is Albuquerque, beloved to sun worshippers and fans of “Breaking Bad.” Next comes Boise, gateway to some of the country’s best rafting and mountain biking. And in third is Chicago, home to the unparalleled comedy club “Second City” and the world’s deepest dish pizza.

Ready to shop? See some of the homes that have dropped in price.

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Source: zillow.com

Portrait of a Long-Term Renter: Crossing Generational Divides

For many Americans, owning a home is a rite of passage. But not everyone puts homeownership on their priority list.

Long-term renters (those who have been renting for more than one year) are opting out of the home-buying game for a variety of reasons, from a desire for mobility to simply not being able to afford a home purchase.

It’s not just twenty-somethings who make up this group – the population of long-term renters spans all generations, from millennials to baby boomers.

According to the Zillow Group Report on Consumer Housing Trends, 56 percent of today’s renters are millennials (ages 18 to 34). While a majority of renters are in their 20s and 30s, not everyone is in the under-40-club: 28 percent are part of Generation X (ages 35 to 49), and Baby Boomers (ages 50 to 64) make up another 12 percent.

“I want flexibility – not a mortgage”

Many renters are staying in the rental market longer than they planned, as evidenced by falling homeownership rates over the past decade. The Zillow Group Report on Consumer Housing Trends reveals that long-term renters are generally content with their current living situations. This echoes what long-term renters across the United States are saying: It’s about flexibility.

Types of Leases — *The majority of renters surveyed committed to a year-long lease.*

Los Angeles renter and real estate agent Monica Rivera explains that, for her, renting is all about mobility and location. “I choose to rent because I’m not ready to stay in one place just yet, and renting provides a great level of flexibility,” says Rivera, a millennial.

“I know the traditional idea of homeownership has been finding that dream home you’ll live in for seven plus years,” she adds. “Maybe it’s a millennial thing, but I tend to move every two years depending on new opportunities or even proximity to places I enjoy visiting.”

The report also indicates that the longer someone rents, the more likely they are to stay put. More than half of renters not looking to move have rented for five or more years.

Millennial Kim Van Horn has been renting in Seattle, WA for more than five years and intends to rent for up to 10 more. She and her husband enjoy being able to live wherever they like without the constraints of a “house budget.”

“There’s much more flexibility and inventory with renting,” remarks Van Horn.

Jacqueline Smith, a Baby Boomer who lives in Natick, MA, says her reasons for renting revolve around her temporary living situation. After moving for work, the Smith family chose to rent until their children go to college, and then relocate.

“We’re renting just until our last child finishes the first two years of college,” Smith explains. “It’s easier than buying and then trying to sell in a short period of time.”

“What’s the rush?”

The Zillow Group report also indicates that families who have been renting long-term are more likely to plan to move to a purchased home. In fact, 40 percent of long-term renters hope to purchase a home once they decide to move.

Baltimore resident and SparkRental real estate blogger Brian Davis has rented for most of his adult life. Now in his mid-30s and married, Davis intends to continue renting for some time to come. “For now, my wife and I are still enjoying traveling a great deal and don’t need a home larger than our apartment,” he says. He intends to buy a home once they have kids.

Sam Wright, a millennial who lives in Fort Worth, TX, is a teacher and graduate student with plans to move once she finishes her doctoral program. “I rent because it’s far cheaper than owning a home. Even though my rent is slightly more than my mortgage [would be], I pay less in utilities and nothing in terms of maintenance and repair,” she explains.

“Renting also lets me live closer to where I need to be than owning would allow,” Wright notes. She adds that renting for a few years also affords her the time she wants to decide where she’d like to settle down.

“I just can’t afford it”

On the flip side of opting for flexibility is the harsh reality of financial constraints.

Jamie Harsha Sass, a millennial in Ames, IA, recently bought her first home after renting for 16 years. As a single parent and graduate student, Sass says her financial situation wasn’t stable enough to buy a home of her own.

After remarrying, she and her husband were able to purchase a home together. “I never intended to rent for so long, but my life took some serious unplanned detours,” Sass says. “My credit was a mess for almost a decade, which prevented me from buying a home until recently.”

Debt is another issue for many renters who hope to be homeowners some day. Courtenay Cook Stevens, a millennial living in Orem, UT, rents a home for now. She doesn’t think she and her husband have the credit to buy yet.

“We’re a single-income family with two kids and a ton of student loan debt, some credit card debt, some lingering medical debt, and about one year left on our car loan,” Stevens explains. “With the amount of debt we’re in, we wouldn’t be able to get approved for a home loan that would get us the type of home we need. For the time being, renting allows us to enjoy nicer digs than we’d get buying.”

Adrienne Ward, a Baby Boomer in Union Beach, NJ, moved to the East Coast during the recession and could not sell her home in Illinois. She and her husband are currently renting their New Jersey home on a yearly contract. Uncertain of whether her family will buy property in New Jersey given real estate prices, Ward and her husband plan on renting for the foreseeable future.

While owning a home may be perceived as the ultimate American dream, the Zillow Group report shows that in general, long-term renters are happy with their current living situations.

Check out the full Zillow Group Report on Consumer Housing Trends to read more about today’s renter.

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Source: zillow.com

Black, Hispanic Mortgage Applicants Denied at Twice the Rate of Whites, Asians

Black and Hispanic people who apply for mortgages continue to be denied at rates far higher than whites and Asians.

The numbers have improved in recent years, with 22.4 percent of black applicants denied conventional loans in 2015, according to Zillow Research’s analysis of the latest Home Mortgage Disclosure Act (HMDA) data. That’s down from a denial rate of 30.5 percent in 2010.

For Hispanic applicants, the denial rate in 2015 was 17.3 percent, down from 25 percent five years earlier.

“Owning a home is an important way for the middle class to build personal wealth,” said Zillow Chief Economist Svenja Gudell. “It’s encouraging to see more black and Hispanic borrowers getting approved for mortgages, but there’s still a lot of progress that needs to be made.”

In part, the improvement comes from an uptick in the overall economy and housing market.

Only 10.4 percent of all conventional loan applications were denied in 2015, down from 14.2 percent in 2010. For whites, the denial rate fell to 8.7 percent from 12.2 percent; for Asians, it declined to 11.1 percent from 13.6 percent.

This mortgage divide, which Zillow Research shows begins even before people apply for loans, is one reason blacks and Hispanics historically have the lowest homeownership rates in the United States. The gap between black and white homeownership rates has been consistent for more than a century, although new survey data from the Zillow Group Report on Consumer Housing Trends show that homeownership is becoming more diverse.

Last week, Fannie Mae and Freddie Mac unveiled new programs to improve access to credit for blacks and Hispanics, groups that have the lowest homeownership rates.

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Source: zillow.com

Millennials Drive the Housing Market, and More Surprises From New Zillow Research

It was friends and the rising cost of rent that finally turned Matt Fong’s attention toward buying a home.

“I liked where I lived, and I tried to keep the rent a certain part of my income,” said the 32-year-old project manager for a Seattle ad agency. “Then I saw another friend buy a home and rent out rooms to make a profit. I thought, ‘If you can do that, I can at least start looking.’”

Fong’s rent had climbed to nearly $1,600 for a 1-bedroom apartment, which a quick look at the market told him was roughly what a condo would cost in the same hip neighborhood. Ultimately, he purchased a single-family home in a different part of town, to avoid condo fees and to get some yard space where he can tinker and restore furniture.

Fong is a millennial homeowner, which, it turns out, is not so rare today. New Zillow Group research shows that young adults are buying homes in sufficient numbers now and they are actually driving the housing market.

Half of home buyers are under age 36

“Millennials are shaping the market more than anyone realized. In fact, half of all buyers are under 36 and half of sellers are under 41,” said Zillow Chief Marketing Officer Jeremy Wacksman, referring to results from a survey of more than 13,000 homeowners, sellers, buyers and renters that are part of the new Zillow Group Consumer Housing Trends Report.

Young adults are also driving more diversity among homeowners. Only 66 percent of millennial homeowners are white, compared with 77 percent of all homeowners. Among millennial homeowners, 17 percent are Latino or Hispanic, 10 percent are African-American and 7 percent are Asian or Pacific Islander.

Nearly half of millennial homeowners live in the suburbs

Another surprise from the new report is that a large number of millennial homeowners – 47 percent – live in the suburbs.

We’ve seen millennials move to some suburbs that are tailor-made to suit their tastes and needs – for example, the neighborhood of Stapleton, which was built on the site of Denver’s old airport. But it wasn’t clear until now how many of them are putting down roots outside of cities.

One big reason for the popularity of suburbs is cost. As urban cores have soared in popularity, so have the price tags on urban homes. To afford bigger homes, and to find the shared amenities they like such as community gyms and pools, many millennials are willing to live farther out.

Their willingness to live in the suburbs, along with the fact that millennials waited longer to buy their first homes, may be part of the reason new Zillow research also reveals that today’s “starter” homes are almost as large as “move-up” homes and cost just 18 percent less.

Still, the stereotype of millennials as urban hipsters is not entirely dead: A third of millennial homeowners live in the urban core. No other generation has so many people living downtown.

Renting still looks good

Although millennials are jumping into the homeowner pool in greater numbers than previously believed, it is not without second thoughts. Two-thirds of millennial buyers consider renting at the same time they shop for a home — and one in three seriously consider it.

There’s no doubt that home buying is a major undertaking. Buyers spend 4.2 months on average shopping for a home, and 32 percent of them exceed their initial budget.

It’s become the norm for buyers to make more than one offer before they close on a purchase. Fong, in Seattle, is among the 24 percent of buyers who made three or more offers.

For him, the 13th try was the charm. He was making bids with 10 percent down and, Fong said, “constantly got bid out of the water.”

It’s hard to compete with couples making bids with larger down payments and dual incomes, he said.

Those financial considerations make sense to a lot of renters, almost 60 percent of whom make less than $50,000 a year. Home buyers, by comparison, make $87,500 on average.

“Depending on where they live, homeownership may be out of reach,” Wacksman said.

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Source: zillow.com