Single Buyers Choosing Suburbia Over Cities

Some 52 percent of single home buyers in April chose suburban locations over urban and rural areas, according to a survey by Coldwell Banker of 1,000 single buyers.

· More than 53 percent of single home owners reported that they purchased a home because it was more cost effective than renting in their area, while 68 percent of single home owners purchased a home that was less expensive than they believed they could have afforded to pay.

· Some 55 percent have less than a 30-minute commute to their office or work from home.

· Singles don’t shy away from foreclosures – especially single men. Thirty-eight percent would currently consider purchasing a foreclosed/short sale home, compared to 29 percent of single women.

· Of the 13 percent of single home owners who own their home jointly with another person, 49 percent made the purchase with their parents. Forty percent live less than 30 minutes or even in the same neighborhood as their parents or extended family. An additional 12 percent live with at least one family member.

· Number of bedrooms is important to 27 percent of single women, while only 18 percent of men were concerned.

What to Do If the Oil Spill Affects Your Market

Anyone trying to rent or sell a property on the Gulf Coast should keep these issues in mind.

• Don’t panic. The next few months could be difficult, but this too shall pass.
• Be forthright. Address the issues on your Web site and on the Web site for your client’s property. Say something like, “We know you’re concerned about the oil spill; we are too.” Add links to reliable news stories and blogs.
• Take pictures. Date-stamped photos of clean water may reassure would-be buyers and renters.
• Focus on non-beach attractions. Golf courses, shopping, and theaters are important and unaffected assets.
• Be prepared to negotiate. Bad news brings out bargain hunters.
• Document losses. Help sellers by providing a broker’s price opinion to serve as a baseline should property values decline, and pursue compensation from the government or BP.

Is a Housing Shortage Coming?

Some experts are saying that the next big real estate problem could be a shortage of homes.

Only 672,000 new homes were started in April. That’s less than half the number needed to meet the country’s average population growth.

In the past, an average of more than 1.3 million households have been built each year, creating demand for 1.5 million new homes. In 2009, only 398,000 new households were formed, according to the Census Bureau.

“The decline in household formation is artificial,” says James Gaines, a real estate economist with Texas A&M. “The young are moving in with their parents. There’s even doubling up among working-class people. There’s a pent-up demand coming if and when the economy recovers.”

Some economists believe this analysis fails to take into account the changing economy or the large inventory of vacant properties. But Gaines and others say these factors are unlikely to significantly drive down demand.

Jobs Key to Housing Recovery

Some recovery in the labor market and record low mortgage rates could help offset some of the pressures on the housing market, according to a new study released by the Joint Center for Housing Studies at Harvard University.

“Right now, economists expect the unemployment rate to stay high, but if employment growth surprises on the upside or downside, housing numbers could too,” Eric Belsky, executive director of the center, said in a statement.

Home owners’ level of debt relative to equity stood at a record 163 percent at the beginning of the year, and housing costs have become a severe burden for more borrowers, the center adds.

A Real Estate Recovery in 2013

Economists speaking at the recent annual meeting of the National Association of Real Estate Editors said the housing market likely will not recover until 2013.

Stan Humphries, Zillow chief economist, said home prices continue to decrease, and he sees the “tremendous amount of shadow inventory” delaying recovery. “We think the market will be flat in nominal terms for three to five years,” remarked Humphries. “We are not going to hit bottom and see a V-shaped recovery.”

Meanwhile, Fannie Mae chief economist Doug Duncan said it will be another three years before new household formation and housing starts pick up. Duncan believes home prices will fall another 1 percent to 3 percent before bottoming out in the third quarter.

Both Humphries and Duncan said the federal home buyer tax credits shifted demand so that buyers took action earlier than they would have otherwise. “We’re going to see a payback in July and August,” noted Humphries.

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