Building Your #FamilyWealth

As the economy continues to improve, more and more Americans are seeing their personal financial situations also improving. Instead of just getting by, many are now beginning to save and find other ways to build their net worth. One way to dramatically increase their family wealth is through the acquisition of real estate.

For example, let’s assume a young couple purchases and closes on a $250,000 home in January. What will that home be worth five years down the road?

Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists every quarter. They ask them to project how residential prices will appreciate over the next five years. According to their latest survey, here is how much value that $250,000 house will gain in the coming years.

Over a five year period, that homeowner can build their home equity to over $40,000. And, in many cases, home equity is large portion of a family’s overall net worth.

Bottom Line

If you are looking to better your family’s long-term financial situation, buying your dream home might be a great option.

#HomeEquity Increasing As Home Prices Rise

Some Highlights:

• 91.9% of homes in the US have positive equity
• 256,000 homes regained equity in the third quarter of 2015
• 37.5 million homes have significant equity (defined as more than 20%)

How Long Does It Take To Save For A Down Payment

In a recent study conducted by Builder.com, researchers determined that nationwide it would take“nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.

Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage a renter spends on housing in each state and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

What if you only needed to save 3%?

What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

Bottom Line

Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.

Happy Holidays!

We hope you have had a great year and are enjoying a festive holiday season. Thank you for your continued support. Warm wishes to you and your family and all the best in the coming New Year! - Jake & Kat

Make Anything A #KitchenBacksplash

From traditional tile to trendy glass — and shiny metal to rustic wood — there is seemingly no end of choices for kitchen backsplashes today. “Tile is still the most popular backsplash material, with natural stone a fast-growing second,” says John Morgan, 2013 National President of the National Kitchen and Bath Association. “But with the right installer, you can make just about any material work.”

Kitchen backsplashes no longer simply protect walls from spills and splatters, a wide array of eye-catching materials like glass, wood, metals and stone make the backsplash the focal point of today’s kitchens.

Expected #PriceGrowth Over 12 Months

In the monthly REALTORS^® Confidence Index Survey, NAR asks REALTORS^® “In the neighborhood or area where you make most of your sales, what are your expectations for residential property prices over the next year?” The map below shows the median expected price change in the next 12 months for each state, reported in the October 2015 REALTORS^® Confidence Index Survey Report. REALTOR^® respondents from Florida were the most upbeat, with a median expected price growth in the range of five to six percent. In Washington, Nevada, and Colorado, the median expected price growth among respondents was four to five percent.

Nationally, REALTORS^® who responded to the October 2015 survey expected prices to increase by 3.2 percent over the next 12 months (3.2 percent in September 2015; 3.0 percent in October 2014). REALTORS^® expect the recent strong price growth to moderate as rising prices have made homes “unaffordable” for many, with home prices almost at par with their levels prior to the housing downturn.

Intero Founder Gino Blefari to take charge of Warren Buffett's real estate franchise business

Earl Lee, the veteran Prudential Real Estate executive who helped launch Warren Buffett’s new real estate franchise brand, Berkshire Hathaway Home Services, will step down as CEO of parent company HSF Affiliates Inc. on Jan. 1 and hand over the reins to Gino Blefari, the founder of Intero Real Estate Services.

Cupertino, Calif.-based Intero Real Estate Services was acquired last month by Buffett’s giant brokerage firm, HomeServices of America Inc., giving the company a foothold in Silicon Valley.

Lee, 69, served as an executive with Prudential Real Estate for 14 years before becoming the first CEO of HSF Affiliates, a joint venture between Berkshire Hathaway Inc. affiliate HomeServices and Brookfield Asset Management. Before joining Prudential Real Estate, he served as an executive for 20 years at Honolulu-based brokerage Prudential Locations LLC.

HSF Affiliates was established after HomeServices of America took a majority interest in the Prudential Real Estate and Real Living brands from Brookfield in October 2012. Nearly 500 brokerages representing 45,000 agents in 1,600 offices across the U.S. are affiliated with the company’s franchise brands, which include Berkshire Hathaway HomeServices.

Blefari, who founded the Silicon Valley-based Intero Real Estate in 2002 after serving for five years as an executive with real estate giant Realogy, will serve as a senior vice president of HSF Affiliates until he takes over as CEO on Jan. 1.

“Earl has been instrumental in developing and executing the initial business growth strategies of HSF,” said Ron Peltier, chairman and CEO of HomeServices, in a statement. “Gino is renowned for his vision, leadership skills and real estate experience, and will be a tremendous addition to the superb senior leadership team already in place at HSF.”

“Up until two days ago I did what (brokers in the HSF Affiliate network) are doing,” Blefari told Inman News. With his firsthand knowledge gleaned from his recent experience growing a profitable, large brokerage from the ground up, Blefari says he’ll be a good resource for brokers.

Blefari said a leadership role at HSF Affiliates is “the perfect next step for me.”

HomeServices of America said Intero Real Estate co-founder Tom Tognoli has been named president and CEO of the company, and John Thompson will become chief operating officer.

The last 18 months have been a whirlwind for Lee and HSF Affiliates,  with Lee overseeing the launch of Buffett’s new real estate franchise brand, Berkshire Hathaway HomeServices.

Berkshire Hathaway HomeServices was created to take the place of the Prudential Real Estate brand, which is slated to disappear when the last franchise rights to the name expire in the 2020s.

Since welcoming its first brokerage on Sept. 23, BHHS’s network has grown to more than 70 firms.

Lee, a perennial member of Inman News’ 100 Most Influential Real Estate Leaders, will continue in a senior advisory role at HSF Affiliates through 2015.

Stephen Phillips, chief operating officer of HSF Affiliates and president of Berkshire Hathaway HomeServices, and Bob McAdams, president of Real Living Real Estate, will remain in their current roles.

By Paul Hagey, Inman.com

#HomePrices #MortgageRates Update

The monthly mortgage payment on a home is determined by two elements: the price of the house and the interest rate you pay on your mortgage. Recently released reports are revealing that the experts expect both elements to increase in 2016.

HOME PRICES

CoreLogic has projected a nationwide 5.2% home value appreciation for the next twelve months. Here is their breakdown by state:

MORTGAGE INTEREST RATES

All four of the entities that provide projections on mortgage interest rates agree: they’re going up in 2016. Here are the predictions over the next four quarters:

Bottom Line

With both home values and interest rates projected to increase over the next twelve months, buying (or moving-up), sooner rather than later, makes sense.

Short Term Vacation Rentals: What You Need to Know

Short term vacation rentals (lasting less than 30 days) are becoming more common throughout the Central Coast, along with home sharing (renting out a room or part of a unit while the primary resident is present). However, different areas have their own ordinances and regulations regarding renting out your home. Thinking of leasing your home temporarily? Check out these guidelines and requirements based on your location, provided by the Santa Barbara Association of Realtors.

Santa Barbara - Short term vacation rentals are prohibited in Santa Barbara, with certain exceptions that require you to get a business license. At the moment, the city is not issuing business licenses nor collecting Transient Occupancy Tax (TOT). A Home Sharing Rental Ordinance is currently in the works.

Goleta - The city of Goleta requires several steps to be taken aside from obtaining a short term vacation rental permit. Goleta's ordinance takes into account the property owner, the vacationer, and the neighbors. In addition to a permit, Goleta requires a Nuisance Response Plan, a Transient Occupancy Tax Application for Certificate Registration, a Surety bond, a Declaration of Notification, and a General Business License Application.

Carpinteria - Carpinteria allows short term vacation rentals, but only in PRD zones (beach and downtown areas). The city also requires a business license and TOT.

Santa Barbara County - For unincorporated areas, there are no existing rules regarding short term vacation rentals, although this will likely change. A new ordinance addressing these rentals is expected to go into place next year. Currently, to have a short term vacation rental you are required to have a business license.

Unique #HomeBuyingTrends

Active military and veterans comprised 21 percent of all home buyers in 2015 ̶ a sizable subset worth exploring their purchasing preferences, according to NAR’s 2015 Profile of Home Buyers and Sellers report released in November 2015. Let’s take a quick look at the demographics for these two groups combined. The median age for this subgroup was 48, whereas active military was typically 34 years old and veterans were 61 years. The median price of a home they purchased was $223,000, which is consistent with all buyers. Twenty-eight percent were first-time home buyers and 81 percent bought previously owned homes. Active military and veterans were most likely to buy single-family homes at 86 percent. However, only 85 percent worked directly with an agent or broker, slightly down from 88 percent compared to all buyers.

Unique Facts about Active Military and Veterans:

• 18 percent bought multigenerational homes compared to 13 percent for all buyers
• 21 percent were relocated due to a job compared to only eight percent for all buyers
• Median income for active military and veterans is $79,500, which is lower than $86,100 for all buyers
• Median home size purchased was 2,100 square feet whereas the median for all buyers was 1,900
• 41 percent of this group used virtual tours to help them purchase their home, more than any other demographic group

#HomeStaging: Pro Tips for Appealing to the Senses

Staging a home for sale is all about inspiring your buyer, and their senses are the avenue by which you connect with them. French novelist Honoré de Balzac once wrote “love is the poetry of the senses,” and specifically touching on each sense when staging a home creates atmosphere that inspires just that kind of poetic love. No matter the size or style of the home, there are a whole range of small things you can do to make it more appealing to aspiring homeowners (and help you lock in a sale!) Here’s how to get started:

Sight is the sense most agents associate with staging. The placement of furniture, decor, plants and everything else is truly central to staging. What can get overlooked in the great production of staging is the most fundamental element to catching someone’s eye – light. Especially for homes whose layout prevents a lot of natural light from getting in, you will want to ensure that you have bright and vibrant light throughout the home you aim to sell. Dark homes can not only feel dreary, but they can also make it more difficult to show off some of the qualities that will help you sell the home from the flooring to any moulding touches and more. Light is also very important for getting good quality photographs, which in the era of online advertising is key to putting your best foot forward to sell homes. There’s a major difference in perception between houses with dark, grainy photographs and ones that look professionally shot when interpreting them in the digital space.

Smell is among the strongest and most personally connective senses we possess as humans. We associate different aromas with experience and memory to a degree where certain smells can make us comfortable and nostalgic or quite the opposite. People are consciously aware of smells that they like and dislike, and some argue that using fragrances or food smells to change buyer perspective is a big no-no. However, if you are choose natural, neutral aromas like lavender, sage, pine or other light woody fragrances, you can create a space that feels like home. Be aware of using fragrances that may cause people who are sensitive to aromas to be uncomfortable, and be smart about using things like incense and spray aerosols that can trigger asthma or allergies.

Taste is important because, frankly, everyone loves snacks. This is a simple fact of life. Food makes people feel more comfortable and welcome in a home, and can add a feeling of sophistication to your showing. While you can’t guarantee everyone will be interested in your hors d’oeuvres, a lot of people will appreciate some fresh fruit, mild cheeses, or even a glass or two of wine as they settle into what may be their new home. Avoid anything that is overly fragrant, like strong cheeses and cooked meats, but don’t be afraid to let the personality of the home inform the snack choice you make. For homes that are more down home and country cottage influenced, regional favorites can’t be beat, whereas if you’re catering to a higher society crowd your snacks should follow suit.

Hearing. Much like smell, music is deeply evocative for memory and affects the mood and comfort level of the listener. Playing music through a home you aim to sell does wonders for filling in the space, making it more comfortable for everyone walking through and giving a sense of personality to your staging. I would recommend something instrumental, preferably classical or piano to enhance without distracting from the surroundings. If you want to get more technical, music that is primarily structured around major chord progressions will energize listeners, whereas minor chords sound darker and can create a sense of melancholy (for an example, look what happens when you shift REM from minor to major. How happy it feels!). It’s also important to ensure your music isn’t too loud, as it can take away from your staging and make it more difficult for your buyers to converse about the home with one another and with you.

Touch. Chances are prospective buyers aren’t going to go around touching the walls and tiles to gauge their tactile appeal, but there is a strong likelihood they will have a seat at some point along the way (or be drawn towards touching a sofa, linens or the curtains). Touch is one of our key exploratory senses, used to judge a wide range of things from the temperature of an item to its softness or quality. Staging a home with comfortable, quality goods is one part of staging with touch. Another key element of touch: temperature. A home that is too hot or too cold will make buyers uncomfortable and distract them from the features you’re looking to showcase. An updated thermostat is not only a great selling point for the home, but helps you accurately and consistently set the temp for showings.

Join us for Santa Day at BHHS!

Join us for Santa Day this Saturday, December 5th! Visit our Santa Barbara office at 3868 State Street between 9am and 3pm for free professional photos with Santa and holiday cheer. Professional photography by Valeria Villa. Please RSVP to 805.687.2666.

We hope to see you and your families there!