Price growth for larger homes has outpaced apartments’ gains over a decade
Demand for Brooklyn townhouses rose during the pandemic, but the surge wasn’t merely a Covid-driven trend.
Prices for townhouses in the borough have been steadily rising for nearly a decade while the condo and co-op market has remained fairly flat, according to a report from UrbanDigs.
The median sale price for Brooklyn townhouses with three or fewer units is now about $1 million, up 85 percent from 2012, when it was $550,000.
Condo and co-op prices also grew, but less. The median price for a co-op is now $780,000, a 59 percent increase from 2012, when it was $490,000. For condos, the median price is $925,000, up 64 percent from 2012, when it was $565,000.
The difference in growth is in part because the market for Brooklyn has more neighborhoods with moderately priced units, such as Bay Ridge, Bensonhurst and Midwood, which eases competition, said John Walkup, who authored the report.
“These areas also have a large number of buildings built to be rentals, which along with the larger supply of sales units, keeps prices in check,” Walkup said. “The townhouse market, on the other hand, is more constrained for buyers.”
With fewer townhouses available and their supply relatively static, their prices tend to rise more quickly in a strong housing market than those of condos and co-ops. Stately row houses in brownstown neighborhoods such as Park Slope and Cobble Hill routinely go for $4 million or more. One in Brooklyn Heights sold in January for $25.5 million, a record price for a Brooklyn home.
Gerard Splendore, an associate broker at Warburg Realty, remembers selling townhomes in Bay Ridge and Marine Park for $750,000 just after the market collapsed in 2008. Now their asking prices exceed $1 million.
“Everywhere that was kind of the fringes is now highly desirable,” Splendore said. “There’s really nowhere else to go, there’s nowhere else to look. You keep pushing further and further out.”
In northern Brooklyn — a region that includes Bushwick, Williamsburg, East Williamsburg and Greenpoint — the median price for a townhouse has risen 24 percent since 2019, according to UrbanDigs.
Central Brooklyn, including such neighborhoods as Bedford-Stuyvesant, Crown Heights and Flatbush, has seen the townhouse median climb 22 percent in that time.
But it isn’t just the increase in sales prices that has an impact.
Large purchases and renovation projects have a trickle-down effect on buyer confidence, said Ravi Kantha, director of Brooklyn sales at Leslie J. Garfield.
“If you’re shopping with an $8 million budget, that’s a lot of money, but if you know that multiple people are spending $10, $12, $15, $20 [million] down the block, it takes a little bit of that hesitation away,” he said.
“I would bet the average asking prices go up pretty significantly in the next year or two across the board,” said Kantha. “It would just be interesting to see what people are willing to pay for.”
In some neighborhoods, competition is so fierce that many homes are sold before they even hit the market
The number of existing home sales plunged in April, surprising economists who had expected last month’s drop to moderate. Real estate experts say this is an indication that shortages of everything from lumber to kitchen appliances are reverberating throughout an already red-hot market — good news for sellers, but a situation that threatens to price out a growing number of buyers, despite mortgage rates that remain near historic lows.
Existing home sales fell from an annualized 6.01 million to 5.85 million, the National Association of Realtors said on Friday. The consensus had been for a tiny uptick to 6.02 million.
The plunge can be attributed to a lack of inventory, said Nick Bailey, chief customer officer at RE/MAX. It’s a perfect storm for home buyers: Builders are contending with widespread and unprecedented supply chain choke points just as the swelling population of millennials is seeking to transition into larger homes to accommodate families.
“It’s the millennial population driving this market,” Bailey said. “A lot of them are turning to new construction, but because of labor and supply costs, builders are being very deliberate about how quickly or how slowly they bring things onto the market.” The lumber shortage has been well-documented, but there are a host of other supply chain choke points plaguing home builders, from copper for wiring to PVC pipe — even for often taken-for-granted inputs like kitchen appliances.
This combination of factors means that last year’s sharp escalation of home prices is set to continue. According to the National Association of Realtors, the median sales price on an existing-single-family home hit a record $334,500 in March.
“We have a major housing shortage in America,” said Lawrence Yun, the trade group’s chief economist. The problem predated the arrival of Covid-19, he said, and was greatly exacerbated by a sudden influx of buyers seeking more space while locked down in the early months of the pandemic and a shutdown of construction sites, factories and lumber mills.
“Supply chain issues have added several weeks to the time it takes to build a home,” said John Burns, CEO of John Burns Real Estate Consulting. Big builders bid up prices on the items they need for construction and then pass along those costs — and then some — to buyers who are in little position to negotiate given the dearth of available supply, while small builders are often locked out entirely, Burns said.
“Suppliers have to take care of their largest customers first,” he said. “The surge in demand that is allowing builders to push price, and putting even more strain on the supply chain as the demand for materials has surged.”
Even with much of the American economy returning to normal, those aftereffects will continue to have a long tail, experts predicted. Commerce Department data released earlier this week found that the number of housing starts unexpectedly tumbled to an annualized 1.57 million, compared with expectations of about 1.7 million.
“We’ve seen a continuation of appreciation in most markets,” Bailey said. Too many buyers chasing after too few properties is triggering bidding wars, and, in some neighborhoods, competition is so fierce that many homes are sold before they even hit the market, he said.
According to Zillow, nearly half of the people who sold homes last month accepted an offer within a week. “As millennials age into the peak years of homeownership, we expect that the demand for housing will be very strong in the coming years,” said Chris Glynn, Zillow’s principal economist.
While low interest rates are contributing to the continued appreciation, even that can’t always make a mortgage a financial reality for buyers, Glynn said. “The challenge interest rates can’t solve is the one barrier to entry — down payments,” he said. “Prices rising definitely adds to the challenge of coming up with that down payment,” he said. Programs that let buyers put down less than the traditional 20 percent can help, but in some markets, he said, would-be buyers find that this puts the cost of a monthly mortgage payment out of reach.
“Given the housing shortage and strong demand — there’s nothing to suggest home prices will be falling,” Yun said.
Yun suggested that President Joe Biden’s infrastructure plan should incorporate initiatives aimed at getting buyers into homes.
“It’s not a good outcome for the country,” Yun said. “We want to make sure that people who are making financially responsible decisions should have access to homeownership. We need to build more, and more consistently, so home prices come down,” he said.
Living in a rental home has some limitations of what you can do to make the house look like you want. You can always consider making small changes that don’t require a significant financial investment, and you’ll feel at home after. Having this feeling and being comfortable is really important when moving to a new place, after all, the lease’s contract generally lasts only one year.
To add more life to your home, there’s nothing better than using plants to decorate. However, the truth is — most people are not experts when it comes to plants — people just go to the closest plant store and choose what they think is beautiful, or even receive some as a gift, falling into plant parenthood without knowledge.
Let’s start with the steps you should take before buying plants. First of all, evaluate the spaces you have in your home to place the plants. Remember that you have to think about how much natural light your home receives during the day, because some plant species need more light than others. For example, if you want to place a plant on a windowsill, consider choosing ones that thrive in dry and sunny conditions like the popular succulents.
Photo by pexels.com
1. Snake Plant
This plant has this cool name because of its shape looks like a snake. The good news here is that it’s a low-maintenance plant and can live in any environment. However, it isn’t pet-friendly!
Photo by pexels.com
2. Aloe Vera Plant
This plant is not easy to take care of, but it has many good anti-inflammatory and antibacterial properties, so you can use it to brighten up your home and for medical purposes, like healing a small cut, just make sure to use it in the correct way. This is also not pet-friendly.
Photo by pexels.com
3. Rubber Tree
If you’re a new “plant parent” or someone who forgets to take care of their plants, this one is perfect for you. It doesn’t need too much water, and it likes bright places. This one is pet-friendly!
Photo Getty
4. Bird’s Nest Fern
This beautiful plant likes humid environments and moderately bright places. For sure, this plant is going to give a special touch to your home, and for those who have pets, yes, it’s safe for them.
Photo by pexels.com
Now it’s up to you! Which plant are you going to choose for your rental house? Tell us in the comments!
Last month, the median rental price in Manhattan by 4% compared to March, the first dip in five months, according to new data from Douglas Elliman Real Estate and Miller Samuel. Those deals, as well the city’s continued reopening, helped push the number of new leases in Manhattan, Brooklyn, and Queens to record highs.
“There’s still such a high amount of inventory, and tenants know that,” says Hal Gavzie, executive director of leasing at Douglass Elliman. “[They’re] looking at neighborhoods that pre-Covid they could not afford.”
Areas like Boerum Hill and Cobble Hill in Brooklyn, and the West Village in Manhattan, are particularly hot, with demand so high for some units that landlords are asking prospective renters to submit their best and final offers above the advertised rent price—akin to what would be expected in a competitive market for home buyers. Still, the median rental price in Manhattan is down 18.5% compared to a year ago, while Brooklyn is down 16.2% and Queens 13.1%, the report said.
The best deals in Manhattan are on big spaces—apartments with three or more bedrooms—presumably because Covid-19 has caused tenants to seek fewer roommates. The median rental price for such units is down 24.4% to $5,000 in the past year, while smaller apartments have dropped between about 15% to 20%.
Such declines have spurred a rush of signings, as tenants seek to lock in deals while they still can. Across apartment sizes, new signings in Manhattan soared more than fivefold compared to a year ago. The median apartment rented for $2,791 in April, net of concessions like one month or more of free rent, compared with $3,540 in April 2020.
A similar story is playing out in Brooklyn and Queens, though median prices ticked up month over month, by 0.1% and 3.4%, respectively. In Brooklyn, all apartment sizes are renting at a median discount of at least 18% compared to a year ago, with the biggest discounts on those with two or more bedrooms. Luxury buildings have dropped less. In Queens, where there are comparatively fewer transactions, the median rental price in April was $2,370, a 15.7% annual decline.
Prices could normalize closer to pre-Covid levels in 24 months, Gavzie thinks, but much depends on how quickly the city’s commercial market rebounds. The pandemic has caused office vacancies in Manhattan to hit record levels, and as companies formulate their long-term work-from-home policies, it is not clear when—if ever—office workers will return in their old numbers. The longer that rebound takes, the harder hit many retail and residential landlords will be.
Still, beyond the bidding wars in the city’s ritziest rental enclaves, there are signs that the worst has passed. Public transportation is more crowded, and some owners are beginning to once again charge broker fees to tenants, the much-reviled surcharges that are a sign of landlord strength. “I think that we’re still a long ways away,” Gavzie says. But “these are all positive signs.”
Settled in the late 1600s, this Litchfield County town is more densely populated than its neighbors, with a quaint downtown and more full-time residents.
Shortly before the pandemic, Brad and Courtney Akin began hunting for a weekend getaway from their two-bedroom rental in Queens. It wasn’t long before they fell in love with a converted barn and grain silo, built in 1800, in the town of Woodbury, Conn., on the southern edge of Litchfield County. By the time they closed on the property, Covid-19 was raging, so they crammed what they could carry from their apartment into a U-Haul and drove with their son, who was almost 2, to their new home. And that’s where they’ve spent much of their time since.
Mr. Akin, 36, is an associate business manager at a Manhattan-based financial services firm for musicians; Ms. Akin, 32, is a marketing manager for a media company in Manhattan. Both have been working remotely, happily ensconced in their 3,045-square-foot, four-bedroom post-and-beam house. They paid $370,000 for the property, which sits on 1.34 wooded acres. This spring, they tapped some of their maple trees to make syrup.
It’s not that they don’t miss New York and all the city offers. They have held onto their apartment, but as Ms. Akin put it, “Everything looks different now — this is our refuge.
Rustic beauty and peace are qualities that many Woodbury residents appreciate, whether they live there part-time or full-time. Barbara K. Perkinson, Woodbury’s first selectman, estimated that of the town’s roughly 9,700 residents, weekenders make up 10 to 15 percent.
What distinguishes the town from neighbors that are less densely populated and heavier on weekenders — specifically Roxbury and Washington — is its quaint downtown. Stretching about two miles, it is lined with mostly locally owned small businesses, shops and restaurants — some in plazas, some in restored antique homes. This area is part of what earned Woodbury its 2020 Reader’s Digest designation as Connecticut’s “most charming small town.”
Another aspect of Woodbury’s charm is its sense of history. Settled in the late 1600s, the town is infused with its past, evident in the numerous 19th-, 18th- and even 17th-century homes that pepper its leafy streets, and in the names of several of those streets that commemorate its founders.
The Farm sells G.M.O.-free produce at its farm stand, in its store and through its C.S.A. Credit: Stefano Ukmar for The New York Times
The Akins have been pleased to find plenty of red hearts honoring health care workers and anti-hate signs planted on lawns, as well as an active “Justice Woodbury” Facebook page and a weekly Black Lives Matter rally downtown. “They’re there literally every Sunday,” Mr. Akin said of the rallies. “People drive by and honk their horns.”
“OK, maybe not everybody here votes the same way,” he continued, acknowledging a townwide voting record that skews Republican. “But this town cares.”
What You’ll Find
Shaped like a rectangle with a jagged eastern side, Woodbury is bisected from its southern border to its northeastern corner by Route 6, also known as Main Street South and Main Street North, and the site of the downtown corridor. The rest of the town is primarily residential, its roads meandering past three rivers — the Pomperaug, Weekeepeemee and Nonnewaug — and more than 3,000 acres of parks, preserves and farmland.
RaeAnn Walcott, Woodbury’s assessor, said the town has 3,477 single-family homes. In addition to the antique houses, they include 20th-century ranches, raised ranches and Capes, and, in a few subdivisions, large 21st-century colonials.
85 OWL RIDGE ROAD | A four-bedroom, three-and-a-half-bathroom house, built in 2007 on 2.02 acres, listed for $1.65 million. 203-578-0397 Credit: Stefano Ukmar for The New York Times
There are also 42 two-family homes and eight three-family homes, plus 712 condominiums in seven complexes, among them the 400-unit Woodlake. There are 31 rental buildings, most with four to 12 units; the two largest have 56 and 74 units.
What You’ll Pay
Pels Matthews, an agent with William Raveis Real Estate, said homes in Woodbury sell from the $100,000s for a one-bedroom condo, up to $2 million. “Most of the single-family houses on the market are between $350,000 and $1 million,” he said, noting that Woodbury doesn’t command the premium prices that Roxbury and Washington do. “There are some nice estates here, but there are no $5 million homes.”
As it is elsewhere, inventory is unusually low, and the market “is unbelievable,” said Timothy S. Drakeley, a broker at Drakeley Real Estate, with “significant activity in every price range.”
Bidding wars and over-asking-price sales have become common. Mr. Drakeley cited a house listed recently for $649,000: “We had three offers within three days, each one over $670,000.”
87 CARMEL HILL ROAD | A five-bedroom house with five full and two half bathrooms, built in 1988 on 2.38 acres, listed for $790,000. 203-982-2303 Credit: Stefano Ukmar for The New York Times
According to information provided and compiled by SmartMLS, Inc., as of May 3, there were 29 single-family homes on the market, from a 2,018-square-foot, three-bedroom 1760 colonial on 4.1 acres, listed for $195,900, to a 2,416-square-foot, four-bedroom 1845 colonial on 33 acres, with a pool and pool house, listed for $1.899 million. Three multifamily homes were available: a 906-square-foot two-bedroom for $368,500; a 2,434-square-foot two-bedroom for $449,900; and a 5,600-square-foot five-bedroom for $724,900. One condominium was on the market, a 546-square-foot one-bedroom, for $125,000, as was one rental, a 3,159-square foot, four-bedroom house, for $18,000 a month.Prices are up across the board. The median sale price for a single-family home during the 12-month period ending May 3 was $392,500, up from $356,000 during the previous 12 months. The median price for a multifamily home was $313,750, up from $277,500. The median sale price for a condominium was $145,000, up from $127,500. And the median monthly rental was $1,500, up from $1,400.
The Vibe
Because of its variety of housing, Woodbury is more socioeconomically diverse than many of its Litchfield County neighbors. Mr. Drakeley, a lifelong resident, said the community is a mix of families who have stayed for generations and transplants from New York City, Westchester County and more built-up places nearby, like Southbury, Watertown and Waterbury. Ms. Perkinson described Woodbury as having “a hometown feel, where everybody knows everybody.”
74 MIDDLE QUARTER ROAD | A four-bedroom, two-and-a-half-bathroom house on 4.7 acres, built in 1835, listed for $599,000. 203-948-5255 Credit: Stefano Ukmar for The New York Times
Residents might bump into one another downtown, at the Canfield Corner Pharmacy or the popular New Morning Market and Vitality Center, one of two supermarkets in town. They might grab a craft beer at Woodbury Brewing Company or see a play at the nonprofit Community Theatre at Woodbury (once post-pandemic performances resume).Outdoor enthusiasts can explore the trails in several town-owned parks, including Hollow Park, with ball fields and a path along the Pomperaug River, and Orenaug Park, which has a rock-climbing section and an observation tower. Or they can hike to the scenic Nonnewaug Falls or wander in the 2,400-acre Flanders Nature Center and Land Trust, which maintains seven nature preserves, six of them in Woodbury. And for nearly three decades, Woodbury has held one of the state’s largest Earth Day celebrations (this year, it was a pandemic-safe hybrid version).
The town has a longstanding reputation as the antiques capital of Connecticut, but with some of its antiques stores shuttering, that has shifted. Now some locals call it “Foodbury,” for its wealth of restaurants. Favorites include the farm-to-table Good News Restaurant and Bar; the historic 1754 House restaurant and tavern; and Dottie’s, a must-visit stop on doughnut tours.
The Schools
Woodbury is served by Regional School District 14, which also serves the adjacent town of Bethlehem. Of the district’s roughly 1,650 students, nearly two-thirds live in Woodbury.
Children in prekindergarten through fifth grade attend one of two schools: Mitchell Elementary School, in Woodbury, or Bethlehem Elementary School, in Bethlehem. Enrollment in prekindergarten, an integrated special education program for 3- and 4-year-olds, is determined by lottery, and tuition is charged.
Located near the border with neighboring Bethlehem, Nonnewaug Falls is part of a 50-acre park with hiking trails. Credit: Stefano Ukmar for The New York Times
Students in sixth through eighth grade go to Woodbury Middle School before moving on to Nonnewaug High School; both schools are in Woodbury. Last fall, a three-year, $64 million renovation was completed at the high school, which includes the acclaimed Ellis Clark Regional Agriscience and Technology Center.
Data from the Connecticut State Department of Education’s Edsight portal indicated that on the 2018-19 Smarter Balanced assessments, 67.7 percent of the district’s fourth grade students were proficient in English language arts and 69.7 percent were proficient in math; statewide equivalents were 54.6 percent and 52.5 percent. Mean SAT scores for the 2020 graduating class were 528 in evidence-based reading and writing, and 512 in math, aligned with the College Board’s statewide means of 527 and 512.
The Commute
Woodbury residents might commute to nearby cities like Waterbury, a little more than 10 miles east; Danbury, 22 miles southwest; Torrington, 25 miles northeast; New Haven, 25 miles southeast; or Hartford, 41 miles northeast.
The commute to Manhattan, more than 80 miles southwest, is a long one, although some make the trip a few times a week. Those traveling to the city can head to Interstates 84 and 684 for the drive, which takes less than two hours, depending on traffic. Or they can drive more than 30 minutes southwest into New York to catch Metro-North Railroad’s Harlem line at Brewster, where trains to and from Grand Central Terminal take 79 to 107 minutes. Round-trip fares are $40 peak, $30 off-peak and $437 monthly; presently, all trains are considered off-peak.
The Glebe House Museum and Gertrude Jekyll Garden is a public historic site. The house (named for its location on the glebe, or the parish priest’s farmland) dates to 1740 and is considered the birthplace of the Episcopal Church in the United States. Credit – Stefano Ukmar for The New York Times
The History
In the middle of the 20th century, the area around Woodbury was a haven for a small group of Surrealist artists. Alexander Calder, whose work found influences in Surrealism, lived in Roxbury. André Masson had a home in New Preston, and Arshile Gorky lived in Sherman. The painter Muriel Streeter and her husband, Julien Levy, a dealer in Surrealist art, lived in Bridgewater. And shortly after they married in 1940, Yves Tanguy and Kay Sage settled in Woodbury.
Mr. Tanguy, who came to the United States from France, painted disquieting dreamscapes populated with biomorphic abstractions, while Ms. Sage, the daughter of a New York State senator, set her geometric forms and architectural imagery in desolate landscapes. In 1946, the couple bought a 19th-century farmhouse and barn on Old Town Farm Road and converted the barn into side-by-side studios. After Mr. Tanguy’s death in 1955, Ms. Sage remained there until she took her life in 1963. The home and barn still stand.
Looking for a new apartment or house is very exciting, whether you’re a young adult looking for your first house or if you’re a seasoned renter. The feeling of going to a new place and into a new phase of life is quite thrilling. However, the rental process is not easy and sometimes not so enjoyable. When these times happen, you should be careful when choosing what you want and follow these steps to make the process go smoothly.
1.Evaluate the neighborhood
Moving to a new neighborhood is very cool, especially if it is a place you’ve been looking for for a long time. However, in this step, it is very important to go to the area on different days of the week and times of the day. This way, you will see how the neighborhood is on many occasions. Do you feel safe? Is the place quiet? Does the neighborhood have everything you need? These are a few questions that you should consider before moving.
2. Inspect the property
This is one of the most important steps. You have to inspect the house you’re looking at if you want to avoid problems. Many houses look great at first, but our advice here is to hire a professional to inspect the place for you. However, just do it if you are deciding to buy the property, because it’s not necessary to inspect houses or apartments that you’re not interested in. If you want more information about hidden costs, check our post “Plan for Hidden Costs When You Buy a Home”
3.Reading the lease
We all know that lease contracts are long and difficult to understand. However, this document contains all the information about the rental, so reading it all very carefully is important to avoid misunderstandings. Take your time reading it, and if you think it is necessary, ask the owner or a legal professional the questions you have.
4.Renter’s insurance
Insurance is not just for homeowners! If you’re renting a house or apartment, it is crucial to get insurance, because if something happens to your personal belongings, replacing them will be covered. Usually, this type of insurance is pretty affordable, and it is better to be safe than sorry.
With all these steps, your decision-making process will be easier. We know renting is simpler than buying a house, but it’s still a big decision. Following these steps will ensure that you make the best decision for your new home.
A brief drop in mortgage interest rates sent some borrowers rushing to their lenders to see if they could get any savings. That sent total mortgage application volume up 2.1% last week from the previous week, according to the Mortgage Bankers Association.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.11% from 3.18%, with points decreasing to 0.32 from 0.34 (including the origination fee) for loans with a 20% down payment. That is the lowest rate since February, and it is 32 basis points lower than one year ago.
As a result, applications to refinance a home loan, which have been weak lately, increased 3% from the previous week but were still 12% lower than a year ago, according to the MBA’s seasonally adjusted index. The refinance share of mortgage activity was essentially unchanged.
“The decline in rates helped the refinance index reach its highest level in eight weeks, driven by a 4 percent increase in conventional refinances,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Additionally, refinance loan balances increased for the fourth straight week, an indication that higher-balance borrowers acted to take quick advantage of lower rates.”
Mortgage demand from homebuyers rose just 1% for the week and was 13% higher than a year ago. The annual comparison has been skewed for several weeks, since the housing market ground to a halt at the start of the pandemic in March 2020 and then came back strongly by June. It will be more important to watch that comparison over the coming weeks to see how it adjusts.
“Most markets this spring continue to see robust demand, but activity continues to be constrained by insufficient inventory levels, as well as homebuilder challenges related to the ongoing shortages and price increases for building materials,” Kan added.
Mortgage rates are already popping back up this week, especially Tuesday, because of a surge in the supply of bonds being offered, especially Treasury and corporate bonds.
“While neither of these are the same bonds that most directly influence mortgage rates, they are correlated and interdependent enough that mortgage rates ultimately feel the ill effects of increased supply,” said Matthew Graham, chief operating officer at Mortgage News Daily.
Making a list of what you want and what you need is not always an easy process when it comes to finding a new home. Don’t fret, we are going to help you figure out what is really important to put on the list, with some questions you should ask yourself before starting the search for your new house. Having a complete list and questions answered will keep you on track when you finally start looking.
What type of building do you want?
First of all, you have to decide what type of home you want. What is your ideal home? A single-family house, an apartment building, or a duplex. It’s important to think about what better fits your budget, lifestyle, and for sure, assess the problems you might have in which type of house, like noisy neighbors.
Which neighborhood do you want to live in?
Consider the type of home you want — lifestyle, your job, public transportation and traffic, stores and pharmacies nearby — all this is going to count when you move. If you prefer an area with restaurants and bars or a family-friendly area, or if you want a practical life, every aspect should be taken into account. Make sure you’re happy with the place you’re choosing before moving.
What kind of natural light do you prefer?
Are you a morning person or a night person? Here, you should think about if you want the sun rising in your bedroom or if you prefer the sunset. Or do you want the morning sun in the kitchen and sunset in the front yard? Do you like giant windows or not? Remember, the sun can change our mood, so be aware of what kind of natural light you will have in your home.
Do you want to have an outdoor space?
Outdoor spaces come with an extra cost in many cities, but if you can afford that, what type do you want? Do you need a backyard for your whole family and pet or is just a paved space for plants enough? Evaluate what fits best for you and your family.
Answering all these questions will make it easier to start your search for the perfect home. You will see that checking off the items on your list will clarify what you need and what matches your preferences, which will lead you to the home that you desire!
Some buyers still prefer new builds over bidding wars for existing homes
More than a quarter of single-family homes for sale during the first quarter were new-construction homes — nearly 26%, and March housing starts jumped nearly 20% month over month to the highest level since 2006, per the latest report from Redfin.
Although housing starts are rising, lumber prices have skyrocketed in the past 12 months, causing the average price of a new single-family home to increase by $35,872, according to the National Association of Home Builders.
But if you can afford it, notes Redfin Agent Melanie Miller, building a new home is still the preferred route to take for many versus entering the shark-infested waters of the current housing market. Existing home sales were 9% higher than a year ago with just two months supply to choose from. A healthy housing market is considered roughly six months of supply.
“New construction has typically been a good option for buyers who don’t want to deal with bidding wars because builders don’t usually set deadlines for offers,” Miller said. “Buyers also like that they can often buy a new home for what it’s actually listed for rather than having to offer way over the asking price to win.”
However, the U.S. housing shortage has grown so severe that some newly built homes now have waitlists that are 90 buyers deep, said Ryan Aycock, Redfin’s Salt Lake City market manager.
“Some builders are even canceling contracts with buyers who refuse to accept price increases,” Aycock said,
Low mortgage rates have kept buyers engaged, even with high home prices. Rates recently fell below 3%, and are nearly 30 basis points lower than they were a year ago.
“Only higher rates will result in more days on the market and thus larger inventory,” said Logan Mohtashami, HousingWire’s lead analyst. “We need these two things in order for buyers to have more choices and more reasonable price growth. Again, the question remains if rates will get high enough to have this effect on the market before more price damage is done. Right now home prices aren’t high enough to impact demand in a major way.”
The country has also experienced an exodus of movers from bigger metros into “secondary cities,” as work-from-home mandates during the COVID-19 pandemic allowed workers to live anywhere. Cities with cheaper homes — and larger lots — became popular, and the amount of new housing starts quickly rose in smaller cities like Pueblo, Colorado, and Elgin, Illinois.
In Elgin, single-family permits climbed 68.3% — the biggest jump of all metros studied by Redfin. Elgin was followed by Tacoma, Washington (up 58.9%), Bridgeport, Connecticut (up 57.9%), Minneapolis (up 57.5%), and Albany, New York (up 57%).
The largest drop in housing starts was in Newark, where permits fell 22% from a year earlier in the first quarter. Next came Allentown, Pennsylvania (down 19.6%), Virginia Beach, Virginia (down 10.5%), San Diego (down 9.2%) and Camden, New Jersey (down 5.6%). When broken down by region, the West had the lowest share of newly built homes as a portion of total single-family homes for sale, at just 8.4%. It was followed by the Northeast (11.4%), the Midwest (15.4%) and the South (25.8%).
Redfin Chief Economist Taylor Marr said California metros are showing the least amount of new housing starts, in part because those cities tend to have less vacant land available and less space zoned for housing development. In Fresno, California, just 2.4% of single-family homes for sale in the first quarter were newly built — the smallest share of the 82 metros in Redfin’s analysis. Fresno was followed by Oakland (2.9%), Bakersfield (3.2%), and Riverside (3.4%).
But new builds are still an option for many throughout the country, Marr said.
“Building homes has become more attractive and profitable during the pandemic due to record-low mortgage rates and red-hot homebuyer demand,” Marr said. “At the same time, many homeowners have opted to stay put and refinance or remodel their existing homes instead of selling them, allowing new-construction homes to take up a larger portion of the market.”
The COVID-19 pandemic has shown many people the importance of being ready for the worst. Landlords have been negotiating with struggling tenants to create rent relief plans. The federal government has placed moratoriums on evictions and foreclosures. The pandemic (and the legislative response) has left both owners and tenants wondering if their contracts are still binding.
While the COVID-19 vaccine is rolling out, you, as a landlord and real estate investor, are probably worried about maintaining your properties and paying your mortgage. Meanwhile, unemployment numbers are at record highs; your tenants are worried about their own financial futures and may be unable to pay rent.
It is important to know that complaints of nonpayment may be exaggerated—the National Multifamily Housing Council found that 93.5% of renters paid February 2021 rent in full.
In the months to come, some real estate sectors, including hospitality and apartment REITs, could experience strong demand. The outlook for other sectors is mixed.
How can you as a landlord balance your own financial needs with your tenants’ to give both of you a way through challenging circumstances?
How prepared is your business for when things head south?
Challenges property owners are facing
There are three significant problems that you are likely to experience as a landlord during a recession.
It becomes more difficult to collect rent.
Old tenants might want to vacate.
It is more difficult to find new tenants.
These problems will continue to dog landlords struggling to recover their footing after the pandemic.
As a landlord, the best way you can prepare for a market downturn is to have policies and processes ready to implement and clearly communicated to your tenants. This gives you a legal and financial grounding in the event of economic recession or downturns in specific markets. Additionally, your tenants will know their options ahead of time.
Types of rent relief plans
One of the possible processes is to have a rent modification arrangement on standby. You can also create plans to handle garbage, water, and any other bills when rent is no longer as reliable.
One of the common incidents you are most likely going to experience during a long recession is your tenants requesting rent relief. There are several strategies to approach this as a landlord.
These include:
Rent deferral. In a rent deferral, you can choose to defer a tenant’s rent until a later time. Based on your agreement with the tenant, the deferred rent can be paid in smaller installments or in a single bulk payment. Another approach to this is to create a cap on operating expenses over a set period.
Rent reduction. You can also choose to reduce a tenant’s rent for all or some part of the total amount of time they have left on their lease. This reduction can be on either the base rent or the operating expenses.
Loan conversion. This is converting the past due rent of a tenant into a repayable loan over a longer set period. Loan conversion is evidenced by a promissory note cross-defaulted with the tenant’s lease.
Rent abatement. This is another strategy used if the client is due on several past payments. In rent abatement, you can choose to simply forgive some or all of the delinquent rent.
Regardless of the approach, you choose in handling rent relief, it is important to look out for the tax implications. Apart from this, you should also perform due diligence. Check out recent and previous financial records of the tenant to ensure you do not leave out any loopholes in the process.
Why is rent relief important?
As much as possible, you should try to find a workable package. It is important to be understanding and retain good tenants using any of the strategies listed above.
Generally, tenants found defaulting are not considered for most relief considerations. However, the circumstances of the recession might not make this workable, as most tenants are already in or would soon be in default when requesting rent relief. Document everything, and clearly spell out all details of any arrangement you and your tenants make.
The effects of a recession can be severe for everyone. If tenants are no longer able to keep up with their rent, making your maintenance and mortgage payments can become difficult. This is why it is often advised to have a contingency plan to pay these bills. With the proper preparation, flexibility, and good tenant communication, you can come out of recession stronger as a landlord.
