April showers bring May flowers! Time to “spring” into action and show our potential retirees what we have to offer. Many of our communities are filled with hiking trails, water views, and cultural amenities. But most of all, an experience everyone can enjoy. Simply have a look at our “Seal of Approval” communities, or if you’re interested in becoming one, check out AARC Seal of Approval Recipients to learn more.
Fuel Up for Retiree Recruitment at our annual conference, November 7-9 in Daytona Beach, Florida. Be sure to take advantage of the early-bird registration starting as low as $350 by visiting www.AARCConference.org. The AARC continues to be your resource in the retiree attraction market!
We truly hope you had a great Memorial Day weekend and took time to remember those that gave the ultimate sacrifice for our freedoms.
Rachel Baker Chair, The AARC
Builder Confidence Climbs to 70 in May
Press Release, National Association of Home Builders | May 15, 2018
Builder confidence in the market for newly-built single-family homes rose two points to a level of 70 in May after a downwardly revised April reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the fourth time the HMI has reached 70 or higher this year.
“The solid May report shows that builders are buoyed by growing consumer demand for single-family homes,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, the record-high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.”
“Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly-built single-family homes,” said NAHB Chief Economist Robert Dietz. “With these fundamentals in place, the housing market should improve at a steady, gradual pace in the months ahead.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The HMI chart gauging current sales conditions increased two points to 76 in May while the indexes measuring buyer traffic and expectations in the next six months remained unchanged at 51 and 77, respectively.
Looking at the three-month moving averages for regional HMI scores, the West and Northeast held steady at 76 and 55, respectively. Meanwhile, the South and Midwest each edged down one point to respective levels of 72 and 65.
Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.
Realtors® Midyear Forecast: Home Sales, Prices to Rise Despite Inventory, Affordability Challenges
National Association of Realtors | May 17, 2018
WASHINGTON (May 17, 2018) – A stronger economy, wage growth and an improving job market are expected to march home sales and prices higher in 2018, but low supply and weakening affordability will tamper the rate of increases, according to speakers at a residential real estate forum during the 2018 REALTORS® Legislative Meetings & Trade Expo.
Lawrence Yun, chief economist of the National Association of Realtors®, presented his 2018 midyear forecast and said despite headwinds a moderate and multiyear increase in home sales is likely ahead. After accelerating 3.8 percent in 2016, existing home sales rose only 1.1 percent to 5.5 million in 2017 and are forecast to finish 2018 at a pace of around 5.6 million (up 1.8 percent). He projects 5.7 million sales for 2019.
“Overall fundamentals remain solid, driven by a growing economy and steady job creation, which will sustain home sales in 2018 slightly above last year’s pace,” said Yun. “The worsening housing shortage means home prices are primed to rise further this year too, hindering affordability conditions for homebuyers in markets across the country.”
Yun said the widespread shortage of homes for sale is the major factor limiting sales from being higher. While home sales have risen modestly since the start of the year, Yun said without more supply to fully satisfy demand and alleviate the upward pressure on prices, contract activity is likely to remain flat and will more or less continue sideways through the end of the year.
Total housing inventory at the end of March was 1.67 million existing homes available for sale, which is 7.2 percent lower than a year ago (1.80 million). Inventory has trended down steadily for the past five years, said Yun, and the country is now experiencing the lowest inventory levels in a generation; unsold inventory is at a 3.6-month supply at the current sales pace, down from 3.8 months a year ago.
Yun was joined onstage by Danielle Hale, chief economist at realtor.com®, who agreed there is an acute shortage, especially of affordable inventory. According to realtor.com® data there are 250,000 fewer starter homes, those priced under $200,000, now than there was two years ago, in May 2015. Millennials, boomers and investors may all be going after the same affordable inventory of homes, so competition is great, said Hale.
“There is reason for optimism ahead though. We are starting to see new listings grow in recent months; the inventory shortage isn’t over, it took us years to get into an inventory rut, so it’s going to take us years to get out of it, but we do see signs of a turnaround,” she said.
Home price growth, up 48 percent from 2011 to 2017 and likely to rise an additional 4 percent in 2018, is far outpacing income growth, up only 15 percent during the same timeframe. Increased home prices on top of rising mortgage rates – Yun anticipates rates will rise to 4.6 percent in 2018 and 5 percent in 2019 – puts affordability at a six-year low, according to NAR’s Housing Affordability Index, and will likely continue to fall in coming months.
“Challenging affordability conditions have prevented a meaningful rise in the homeownership rate after having fallen to a 50-year low a few years ago,” said Yun. “To increase homeownership, more home construction is needed, which could be boosted by delivering regulatory relief to community banks, removing the lumber tariff, re-examining stringent zoning laws and training more workers for the construction industry.”
On the topic of homeownership rates, Jessica Lautz, NAR’s director of demographics and behavioral insights, presented findings during the forum from her thesis from Nottingham Trent University: “Is the Dream Still Alive? Tracking Homeownership Amid Changing Economic and Demographic Conditions”. According to Lautz’s doctoral work, the affordability crisis has impacted some segments of homebuyers more than others, specifically African American and Hispanic/Latino buyers and those with student debt.
Student loan debt has risen dramatically and is a massive barrier to homeownership, said Lautz, and it is delaying home purchases among millennials who are paying their debt by a median of seven years. Her research found that consumers with student loan debt who were successful in buying purchased a home costing 17 percent less than those without any student debt.
“The homeownership rate amongst some ethnic groups hasn’t rebounded since the recession, and the ongoing affordability crisis has hampered potential buyers under 35, especially those with student debt, from accessing mortgage credit and making home purchases,” said Lautz.
Yun said consumer optimism that now is a good time to buy a home has fallen the past two years, according to data from NAR and other industry consumer sentiment surveys. While the lack of supply and challenging affordability conditions is chipping away at homebuyer optimism, Hale said buyers aren’t giving up their dreams of purchasing a home. New survey data from realtor.com® found three-fourths of recent shoppers started their home search in 2017 and are still in the market in 2018.
“Buyers know it’s tough, 35 percent of shoppers anticipate a lot of competition, but they remain optimistic, and more than 70 percent expect to close in 2018,” she said.
Yun said affordability conditions would improve measurably if homebuilders increased their production of homes, especially in the affordable price ranges. He forecasts starts to come in around 1.3 million in 2018 and reach 1.4 million in 2019, but that is barely above year-ago levels and well below demand.
The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.
Homeowners going for more open space
Take a closer look at any modern home and chances are you’ll see a lot of open space. This is the case because homeowners are now trying to design their homes with more open concepts on the inside and they’re sure going to do this in 2018 as well. Therefore, we’ll see a lot of them opting for less hallways, small rooms and lots of open space. One of the best ways to include open space into your new home is to design a kitchen that opens to your dining area. You can also think about merging your dining area with your living room.
Kitchens being used as social hubs
Long gone are the days when kitchens were meant for nothing but cooking. In 2018 we expect to see more and more homeowners trying to turn their kitchens into a real social hub. This means they’ll be able to hang out with their family and entertain their guests while preparing a meal. If you decide to follow this trend, you’ll want to make sure you include a kitchen island into your kitchen. Moreover, you’ll want to make your new kitchen spacious, since nobody enjoys staying long in a space that feels cramped.
Sunrooms finding their way back into modern homes
During the last decade, not so many homeowners have decided to introduce a sunroom into their home. Traditionally, this room was used as a way to escape from the high-tech world, and since we’re now more dependent on technology than ever, it seems sunrooms are coming back in big style. If you decide to add a sunroom into your new home, try to make it as warm as possible, since even though it’s called sunroom, you’ll definitely want to use it during the cold months as well.
New homes having more personality
No two homes out there need to be the same. After all, every home needs a bit of personality in order to be called a true home. Of course, having your builder show you their designs can come in quite handy, but you’ll probably want to try to customize it to suit all of your needs. That’s why it’s very important you turn to home builders who’ll be ready to sit down with you and help you figure out what exactly you want your new home to look like. It’s safe to say that quite a lot of new homes we see in 2018 will be made this way.
People designing outdoor living spaces
People started with simple outdoor fireplaces but more and more of them now wants a full outdoor living space in their backyard. They use these spaces for spending quality time with their family and entertaining their friends. Moreover, they have this mind when designing their outdoor living spaces which means a lot of them decide to include a bar or full kitchen in it. So, if you’re building a new home for you and your family, you’ll definitely want to consider the idea of adding a full outdoor living space in your backyard and design it anyway you want.
If you decide to build your new home in 2018, staying on top of these 5 trends is a great idea. Do a lot of planning, assemble a good team and you’ll end up living in a home you’ve always wanted.