Are you prepared for the retirees who are looking for that perfect retirement destination? The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 58 in February. Any number above 50 indicates that more builders view sales conditions as good than poor. Analysts note builders are reflecting consumers’ concerns about recent negative economic trends – however, the fundamentals are in place for continued growth of the housing market. Source: Calculated Risk.
We are looking forward to our Annual Conference in Asheville Nov. 10-12, 2016. Registration is now open and it’s a wonderful opportunity to explore the nuts and bolts of our industry! Visit our Conference Page to learn more – AARC Annual Conference. Whether you’re a private developer, a chamber or tourism professional, or a government official, AARC is your information source!
Andre’ Nabors Chair, The AARC
7 Baby Boomer Trends to Watch
From Renovations to Walkable Neighborhoods, Heres What Boomers Want Now
Tom Sightings, US News / April 6, 2016
Many baby boomers say they want to retire to the Sunbelt. Most of the rest of us – those who have recently retired or who are planning to retire – want to stay closer to home. (There are always a few who go against the grain and plan to retire in Minnesota or Maine.) But even homebodies expect that they’ll likely sell their old suburban home and move to new quarters, which may be less expensive, more comfortable and more appropriate for their new stage of life as retired empty nesters.
So whether you’re in Sarasota, Florida, Saratoga, New York, or Sausalito, California, here are seven ways baby boomers are looking at their retirement home.
1. Boomers want to pay off their mortgage. Most baby boomers, especially older boomers born before 1955, own their own home. They’ve been paying a mortgage, faithfully and relentlessly, for most of their adult lives. For these people, a primary goal is to finally pay off the mortgage and own their home free and clear. For many, paying off the mortgage is an important threshold – a crucial step they feel they need to take before they can even consider retirement.
2. They want to lower their housing expenses. It’s not just the mortgage. For many boomers, the equity they’ve built up in their home is the largest asset they have. According to a recent Merrill Lynch survey of 6,000 adults, on average, home equity among homeowners age 65 and older is more than $200,000. Many boomers look forward to moving to a smaller house or less-expsenisve neighborhood to free up some of their equity to pay for travel, medical expenses, home renovations or other “extra” expenses they know they’ll face at some point in the years ahead.
3. Boomers want more convenience. A smaller home sometimes means less maintenance, less work and less worry. But not always. Most boomers have “been there, done that” with older homes that have history and “character.” They want modern appliances, energy-efficient doors and windows, spacious kitchens, an open floor plan with lots of light and fresh, new décor. Boomers are done with the “shabby chic” look of the 1990s. And a lot of them, suffering from bad ankles, bad knees and bad hips, are opting for one-story housing.
4. They want a walkable neighborhood. Boomers have spent half their lives in the car, commuting to work and ferrying kids to soccer games and dance lessons. Now many are harking back to their earlier years when they lived on a block with a grocery store down the street and restaurant on the corner – except now it’s a health-food store down the street and a funky coffee emporium with Wi-Fi on the corner.
5. They want to renovate. Boomers are not shy about investing in their homes. In addition to adding comfort and style, they are also starting to make their homes more age-friendly. They don’t want to slip and fall, so they toss out the scatter rugs and instead install carpeting or wood floors; they bring in extra lighting to help them see better, and they are no longer are embarrassed when grab bars begin to make an appearance in their bathrooms.
6. Boomers want to remain on their own. According to the Merrill Lynch survey, only about 10 percent of baby boomers say they want to move to any kind of retirement or age restrictive community. They instead want to stay in their own homes, in their own neighborhood, with their own friends, and if they think they might need help with personal care – or if they need extended care – they’d prefer to get all those services at home.
7. They want to be close to family or friends. For those retirees who opt to stay in their old, comfortable hometown, most say the primary reason is to remain connected to family and friends. But those who plan to move away also tend to cite family reasons as well – moving to be near children and grandchildren. As one couple who moved from New York to Oregon and bought a house in their daughter’s neighborhood advised, “It’s fine to relocate to be near your kids. But make sure you like where you’re moving to – that you’d like the area even if your kids weren’t there. Because you never know when they’ll get a new job and move halfway across the country again.”
Existing Homes Spring Ahead in March
WASHINGTON (April 20, 2016) — Bolstered by big gains in the Northeast and Midwest, existing-home sales bounced back in March and remained slightly up from a year ago, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February. Sales rose in all four major regions last month and are up modestly (1.5 percent) from March 2015.
Lawrence Yun, NAR chief economist, says home sales had a nice rebound in March following February’s uncharacteristically large decline. “Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest – overcame depressed inventory levels and steady price growth to close on a home,” he said. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.”
The median existing-home price2 for all housing types in March was $222,700, up 5.7 percent from March 2015 ($210,700). March’s price increase marks the 49th consecutive month of year-over-year gains.
Total housing inventory3 at the end of March increased 5.9 percent to 1.98 million existing homes available for sale, but is still 1.5 percent lower than a year ago (2.01 million). Unsold inventory is at a 4.5-month supply at the current sales pace, up from 4.4 months in February.
“The choppiness in sales activity so far this year is directly related to the unevenness in the rate of new
listings coming onto the market to replace what is, for the most part, being sold rather quickly,” adds Yun. “Additionally, a segment of would-be buyers at the upper end of the market appear to have been spooked by January’s stock market correction.”
Matching the lowest share since August 2015, properties typically stayed on the market for 47 days in March, a decrease from 59 days in February and below the 52 days in March 2015. Short sales were on the market the longest at a median of 120 days in March, while foreclosures sold in 50 days and non-distressed homes took 46 days. Forty-two percent of homes sold in March were on the market for less than a month – the highest since July 2015 (43 percent).
The share of first-time buyers was 30 percent in March, unchanged both from February and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent.
“With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now,” adds Yun. “Unfortunately, the same underlying deterrents impacting their ability to buy haven’t subsided so far in 2016. Affordability and the low availability of starter homes is still a major barrier for them in most markets.”
According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage ticked up from 3.66 percent in February to 3.69 percent in March, but remained below 4 percent for the eighth straight month. The average commitment rate for all of 2015 was 3.85 percent.
NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida, says despite modest improvements, mortgage credit is still difficult to come by for many first-time buyers and middle-income households. “Reducing the Federal Housing Administration’s annual mortgage insurance premium rate and repealing its life-of-loan policy requirement would certainly expand options for more of these buyers,” he said. “These changes would save consumers money and further strengthen the FHA’s program by enticing more creditworthy borrowers to seek out FHA-insured loans.”
All-cash sales were 25 percent of transactions in March (unchanged from February) and are up from 24 percent a year ago. Individual investors, who account for many cash sales, purchased 14 percent of homes in March, down from 18 percent in February and unchanged from a year ago. Sixty-six percent of investors paid cash in March.
Distressed sales4 – foreclosures and short sales – fell to 8 percent in March, down from 10 percent both last month and a year ago. Seven percent of March sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in March (17 percent in February), while short sales were discounted 10 percent (16 percent in February).
Single-family and Condo/Co-op Sales
Single-family home sales increased 5.5 percent to a seasonally adjusted annual rate of 4.76 million in March from 4.51 million in February, and are now 2.6 percent higher than the 4.64 million pace a year ago. The median existing single-family home price was $224,300 in March, up 5.8 percent from March 2015.
Existing condominium and co-op sales rose 1.8 percent to a seasonally adjusted annual rate of 570,000 units in March from 560,000 in February, but are still 6.6 percent below March 2015 (610,000 units). The median existing condo price was $209,600 in March, which is 4.6 percent above a year ago.
March existing-home sales in the Northeast ascended 11.1 percent to an annual rate of 700,000, and are now 7.7 percent above a year ago. The median price in the Northeast was $254,100, which is 5.8 percent above March 2015.
In the Midwest, existing-home sales jumped 9.8 percent to an annual rate of 1.23 million in March, and are now 0.8 percent above March 2015. The median price in the Midwest was $174,800, up 7.0 percent from a year ago.
Existing-home sales in the South rose 2.7 percent to an annual rate of 2.25 million in March, and are 2.3 percent above March 2015. The median price in the South was $194,400, up 4.6 percent from a year ago.
Existing-home sales in the West climbed 1.8 percent to an annual rate of 1.15 million in March, but are 2.5 percent lower than a year ago. The median price in the West was $320,800, which is 5.9 percent above March 2015.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
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NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.
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 rebenchmarks 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 percent of total home sales, are based on a much larger data sample – about 40 percent 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 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.
3 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 percent of transactions and condos were measured only on a quarterly basis).
4 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 Realtor.org.
NOTE: NAR’s Pending Home Sales Index for March will be released April 27, and Existing-Home Sales for April will be released May 20; release times are 10:00 a.m. ET.