Monthly Archives: May 2016

Chinese Residential Purchasing Power Pushes over $150 Billion into U.S. Real Estate

Source: RISMedia

Over the last 5 years, Chinese nationals have invested over $150 billion into the U.S. housing market, pouring in $28.6 billion in 2015 alone, according a new report released recently by Asia Society and the Rosen Consulting Group.

Currently the biggest foreign buyers of American homes, this immense push from Chinese buyers has been extremely beneficial in aiding the success of the U.S. housing market recovery.

While Chinese nationals have been purchasing both residential and commercial properties, the study shows more purchasing power going toward residential homes than commercial buildings, with $23 billion funneled into U.S. commercial real estate and a stunning $127 billion into housing.

A 2015 study by the National Association of REALTORS® showed that buyers from China made up 16 percent of all international buyers locking in single family homes in the U.S., jumping from 12 percent in 2013, inching above the long-standing top foreign real estate buyer, the Canadians.

“Chinese buyers are buying real estate in the U.S. and they are buying lots of it,” says John Yen Wong, Founding Chairman of the Asian Real Estate Association of America (AREAA), a Strategic Partner with the recently released study. “These property purchases are broadening across the country and communities benefit from the infusion of capital into the neighborhoods.”

So where are Chinese nationals buying real estate, and why? In 2015, 35 percent of these home purchases were made in California, with New York following suit. Top hot spots, according to the study, include Los Angeles, San Francisco, New York, Seattle, Chicago, Miami and Las Vegas. These high-end locations mean buyers are purchasing high-end homes. The study shows that in 2015, Chinese buyers paid an average of $832,000 per home, doubling the average of other foreign purchases landing at $499,600.

Motivations vary. Wong comments, “Three of the key drivers for these buyers are fee-simple ownership—rare if at all, in China; the rule of law—recourse if something goes wrong; and a stable government, despite what we might think during presidential election season.”

Many buyers are relocating on investor visas, some are purchasing rental properties or second homes, while others are motivated by worry over the devaluing of the Chinese yuan, pushing many to translate their assets to the U.S. dollar.

“New real estate owners do not stop spending once the real estate purchase is completed,” says Wong. “Whether buying new appliances, new cars, or eating at restaurants, these new owners infuse money into local economies. The Chinese buyers can lay the foundation for vibrant community growth.”

8 Outdoor Trends That Attract Buyers

Source: RISMedia (Jeff Caldwell)

If you’re considering putting your home on the market, don’t neglect your outdoor space while making improvements indoors as well. Your home’s exterior and the backyard are important in drawing the eyes of potential buyers and making your home as appealing as possible. Here are some modern trends in outdoor living that will entice today’s buyers.

Outdoor Structures

Outdoor structures make the backyard, and even the front yard in some homes, more functional. An outdoor structure can be something simple — like a storage shed — that makes the space more functional. Or, it can be an outdoor shelter — like a gazebo or pergola — that provides more outdoor living space. These outdoor structures boost the function, and therefore increase your home’s value.

Privacy in Outdoor Spaces

The outdoor living space is considered more than just a backyard for the modern buyer. Today, the outdoor space is an extension of the home. People are moving indoor furniture outdoors, adding fireplaces and even installing televisions. Yet when they are relaxing outside, individuals want a measure of privacy. No one wants to be gawked at when enjoying a drink and watching the game after a long day at work.

What does this mean as you are upgrading your outdoor space? If possible, add some privacy to the space to create a room that is an extension of the home. Put up walls around the pergola or choose an enclosed gazebo to do this easily.

Outdoor Kitchen

More and more meals are being cooked outdoors, and the modern outdoor kitchen includes more than just a grill and a picnic table. An outdoor sink, range and even oven can make your home more inviting. Of course, you will need to weigh the costs of this upgrade against the potential benefits; but if you have a great outdoor entertaining space, consider adding an outdoor kitchen to attract potential buyers.

Outdoor Lighting

Outdoor lighting appeals to buyers for a number of reasons: First, it improves the function of the space, making it easier to enjoy an outdoor living space even after dark. A well-lit deck lends itself well to summer barbecues and parties that continue after midnight.

Outdoor lighting also helps attract buyers by making the home more visible when they drive by the property, even if they drive by after dark. Good outdoor lighting will make the home inviting at all times of day. Also, it helps improve the security of the property, which may be important to select buyers.

Low-Maintenance Landscaping

Most home sellers know they should improve and upgrade their garden areas, but do so carefully. A lush, yet high-maintenance garden may detract from your home’s ability to sell. Many of today’s buyers are busy and do not have the time it takes to tend a garden.

When upgrading your landscaping, go as low-maintenance as possible, while still ensuring that the home is attractive. Perennials that grow well in your area can add a splash of color, but do not need to be replanted year after year. Mulch or rock can keep weeds at bay while giving the space a finished look. Automatic watering systems help ensure the plants have enough moisture to thrive, without requiring the owner to keep track of watering schedules. Don’t forget to add stone walkways and decorative items to improve the aesthetics of the space, without adding maintenance efforts.

Natural Wood and Stone

Natural wood and stone features on the home — even if they are made from faux materials like vinyl — attract the modern buyer. This design trend can make an outdated home look modern on the exterior, causing more buyers to stop and schedule a showing. It can also boost the appeal of a modern home by helping it to stand out from a crowded marketplace.

Fire Pits or Fireplaces

If you have a modest budget, but want to add an outdoor feature that will increase your home’s potential value, consider adding a fire pit or outdoor fireplace. You can even do this as a DIY project if you have the time. A fire pit provides a comfortable, logical place for outdoor entertaining or simply enjoying s’mores together as a family.

Permanent Seating

Many homeowners pull out all the stops when it comes to building decks, patios and outdoor entertaining spaces, but forget the most important part — seating. While you can add seating through outdoor furnishings, this will not add value to the property in the opinion of a buyer. Consider a permanent, built-in seating option, like a bench built into the deck or a picnic table that stays with the property.

Remember, today’s buyers still have plenty of houses to choose from. As you prepare yours for the market, be sure to think like a buyer and add features that will make the home as appealing as possible. As you make these improvements, remember to put some attention into your outdoor spaces!

Jeff Caldwell is Brand Manager of Superior Shelter, a subsidiary of Superior Recreational Products. The company designs and creates custom outdoor shelters — including steel pergolas, gazebos and more — to solve your outdoor design needs. It works with landscapers and architects around the world.

Who Pays the Highest Property Taxes?

Source: NAR

 

The average median property tax rate across the nation is 1.31 percent. That means a home owner with a home valued at $200,000, on average, pays an annual amount of $2,620 in property taxes, according to an analysis by CoreLogic’s data team.

Illinois has the highest median property tax rate at 2.67 percent. Hawaii, on the other hand, has the lowest at 0.31 percent.

Read more: The Property Tax Factor

“While higher median tax rates are seen primarily among states in the northeast, a notable exception is Texas, which has a median property tax rate of 2.17 percent,” CoreLogic reports. “Typically, the states with the highest property tax rates, with the exception of Illinois, have multiple levels of tax collection. Conversely, the majority of states with low median tax rates have a single level of collection at the county level. Other than Hawaii, the lowest median property tax rates are primarily in the Rocky Mountain region and southeastern states.”

CoreLogic calculated the median overall property tax rates nationally by state. Researchers took into account all taxing and collection entities. Take a look at the chart below to see how your state ranks.propertytax

 

Cybercrime Hitting Real Estate – Beware of Scams!

Source: RISMedia

Online criminals are targeting the real estate industry and stealing large sums of money from unwary homebuyers. This fraud can destroy real estate transactions, so the National Association of REALTORS® is urging real estate professionals across the country to immediately implement safety measures to reduce the risk of becoming a victim

In a typical scenario, a criminal will hack into the email account of the person involved in an upcoming real estate transaction. The hacker will then send a sham email to the buyer, or another individual who will be wiring transaction-related funds. The email will state that there has been a last-minute change to the wiring instructions. Following the new instructions
contained in the email, the recipient will then wire the money directly to the hacker’s account, which will be cleared out in a matter of minutes. The money is almost always lost forever.

Most email users today can easily recognize the email scams that are rife with poor spelling and grammatical oddities. In contrast, the fraudulent emails being utilized in this wire scam are virtually indistinguishable from legitimate communications. Because hackers are gaining access to the email accounts of individuals directly involved in the transaction, they’re able to include detailed information in their fraudulent emails, including key names, dates, and mocked-up signature lines.

There are a number of measures that real estate agents and others involved in real estate transactions can take to help keep themselves and clients from falling victim to this crime. First, from the outset of any deal, inform all parties to the transaction of this ongoing scheme, to ensure that everyone stays alert to suspicious activity. Second, request that all parties implement reasonable security practices throughout the course of the transaction, such as only using confirmed telephone numbers or face-to-face communication to share sensitive financial or personal information. As a final failsafe, immediately prior to wiring any money, the person initiating the wire should call the intended recipient via a verified
telephone number to confirm the wiring instructions.

Other important steps to avoiding exposure to email fraud include:

  • Never conduct business over unsecured WiFi.
  • Clean out email accounts on a regular basis
  • Change email passwords on a regular basis
  • Implement complex passwords with a combination of letters, numbers, and special characters.
  • Implement the most up-to-date firewall and anti-virus technologies.

If a fraudster has successfully infiltrated a transaction, NAR says:

  • If money has already been wired via false wiring instructions, immediately call all banks and financial institutions that could possibly stop the wire.
  • Contact your local police.
  • Contact all parties who may have been exposed during the attack so that they take appropriate action.
  • Change all passwords.
  • Report the activity to the FBI via their Internet Crime Complaint Center.

This advice is not all-inclusive, and real estate professionals should work with information technology and cybersecurity professionals to ensure that their email accounts, online systems, and business practices are as secure and up-to-date as possible.

Pending Home Sales Reach Highest Level in Nearly 12 Months

Source: RISMedia

Pending home sales increased slightly in March for the second consecutive month and reached their highest level in almost a year, according to the National Association of REALTORS®. Only the West region saw a decline in contract activity last month.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 1.4 percent to 110.5 in March from a downwardly revised 109.0 in February and is now 1.4 percent above March 2015 (109.0). After last month’s slight gain, the index has increased year-over-year for 19 consecutive months and is at its highest reading since May2015 (111.0).

Lawrence Yun, NAR chief economist, says last month’s pending sales increase signals a solid beginning to the spring buying season.
“Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March,” he says.
“This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and
are taking away some of the sting from home prices that are still rising too fast and above wage growth.”