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Will tax reform harm the housing market?

However, according to two recent expert reports, the devil is in the details. “Households with taxable incomes above $400k are likely to experience a decrease in disposable income, though the effects may be muted for households that are already subject to the Alternative Minimum Tax,” he added. Hyper local analysis tells the tale” And in that report, provided early for the benefit of HousingWire’s readers, analysts at HouseCanary dug through mortgages from 2017 between $750,000 to $1 million, to see how many current households would be impacted by the new tax law. “Home buyers in those markets may need to reassess their spending levels, cut corners, or opt out of the market altogether if the homes they’re reaching to buy become increasingly unaffordable. According to the Torgerson DBRS report, disposable income is most likely to decline in higher income households with incomes above $400k and particularly above taxable incomes of $1 million, where lower tax rates are more than offset by the expected increase in taxable income due to the loss of SALT deductions. “In high SALT areas, DBRS estimates the reduction in disposable income is likely to average 3% for taxable incomes between $400k and $1 million, and could exceed 7% at incomes beyond $20 million. If the deductibility of SALT is already effectively limited due to AMT, the changes will have less of an adverse impact on disposable income for some of these higher income households. Furthermore, many of these same households should benefit financially from corporate tax changes, either as owners of a pass-through business or simply due to gains already reflected in their stock portfolios.” Here’s the summary of the DBRS tax reform analysis: Tax policy changes, even when directly tied to housing costs, affect demand for housing primarily through disposable income channels. A relative increase in the cost of homeownership could have adverse effects on housing prices in some markets. Particularly if combined with higher interest rates as a result of monetary tightening and a wider fiscal deficit, real estate prices could soften in more expensive areas.

Here’s where homeowners are relocating

According to Redfin’s migration analysis, 25% of home searchers looked to relocate to another metro in the fourth quarter of 2018. This percentage is a slight increase from 23% in 2017, and now sits at the highest recorded level in the report's history. The migration report utilized data from Redfin’s website, gathering information from more than 1 million users who searched for homes across 87 metros, from October through December. In fact, Redfin states all of these metros saw their outflows (people moving away from the area) dramatically increase from the previous year, especially in San Francisco. In this metro, 24% of Bay Area Redfin users were searching for homes in another metro, which is an uptick from 19% during the same time period in 2017. However, Denver made the biggest move up 2017’s list, as 24% of Denverites searched for homes outside the metro, climbing from 17% the previous year. Interestingly, although Seattle’s market continues to be one of the most expensive in the nation, its net inflow (the number of people moving into an area) surged in Q4, making it the fifth-most popular migration destination. “In both Seattle and Denver prices were growing rapidly in 2017 and early 2018 to the point that buyers backed off in the second half of 2018,” Redfin Chief Economist Daryl Fairweather said. (Click to enlarge) NOTE: Redfin's sample-sized users must have viewed at least 10 listings during the quarter. In order to calculate net inflow and outflow, Redfin took the number of users looking to leave the metro area and subtracted the number of users looking to move to the metro area from another metro area.

Multifamily volatility drags down housing starts

"Importantly, the trend in starts for single-family construction remains solid. Privately owned housing starts decreased in September to a seasonally adjusted annual rate of 1.201 million down 5.3% from August’s 1.268 million, but is still 3.7% up from the annual rate of 1.158 million in September 2017. Single-family housing starts stood at a rate of 871,000, up nearly 5% from last year. As we look ahead to October, it is likely Hurricane Michael may also impact starts for the South, though the impact should be materially less given the large markets of Jacksonville, Orlando and Miami were unscathed." Building permits, decreased from August both monthly and annually. The number of homes being built slid 0.6% from 1.249 million in August to a seasonally adjusted annual rate of 1.241 million in September, down 1% from 1.254 million one year ago. Privately owned housing completions decreased to a seasonally adjusted annual rate of 1.162 million in September, down 4.1% from August’s 1.212 million. Single-family housing completions decreased 8.7% from 924,000 in August to a rate of just 844,000 completions in September. “A slow pace of home building, home prices rising much faster than wages, and rising mortgages rates - though they are still below historical averages - are acting to depress the market," Frick continued. "If wages rise at a quick pace, and home prices increase at a slower rate - as we've seen recently - there could be a revitalized home market, but likely not for months.”

Direct Marketing Is Thriving In Millennial Mailboxes: Here’s How To Make The Most Of...

Everybody knows that millennials (the generation currently between the ages of 20 and 36) are glued to their smartphones and couldn’t care less about your direct response marketing efforts, right? I’m not going to say that all millennials prefer mail over digital because that would just be another broad generalization -- but we do know that a significant majority of them (77%, to be exact) pay attention to direct mail advertising. And the biggest surprise may be that millennials’ affinity for mail, in general, surpasses that of other generations. How To Make The Most Of Your Direct Mail Advertising There are many ways for companies to put together targeted direct marketing campaigns, and they start by following these three tips. (Full disclosure: My company offers direct mail marketing services.) Build A Laser-Targeted Mailing List The data available to direct marketers continues to get better and more accurate. Test And Track Everything It is essential that marketers track everything when starting a new campaign or implementing a new strategy. It is a direct marketing approach that suggests if you can get your message in front of a prospect three times, that person will be able to recall who you are. After 27 times, that person will develop trust in you and your brand. That same strategy holds true when trying to reach millennials.

Baby Boomers won’t downsize homes anytime soon

It uncovered a 3.4% jump in the number of seniors working in 2016 compared with 2005, and a 1.7% increase in the number living with younger generations. It also showed that seniors appear to be holding off on downsizing just the same as they were 10 years prior. “Because the Boomer generation is so much larger than previous generations, that 5.5% moving rate translates into very different raw numbers across the years,” Lee wrote. “There were about 7 million more senior households in 2016 than 2005, meaning 386,000 more senior households moved in 2016.” The age at which seniors decide to downsize has also shifted. The survey revealed that in 2005, seniors were moving into multifamily residences by age 75. By 2016, this had moved to 80. The study sought to examine whether Baby Boomers holding onto their homes was driving up home prices. In looking at the nation’s top 100 metros, it determined that Boomers were not eroding affordability. “Like the general population, seniors in expensive and unaffordable metros rent at much higher rates,” Lee wrote. “The acute shortage in starter home inventory can make it difficult for retirees to move to smaller homes.

12 Startups Utilizing Blockchain Technology in New Ways

However, the technology behind these tokens, blockchain, has far more applications than just cryptocurrencies. Through a network of smart contracts that operate utilizing decentralized information on a ledger, blockchain is able to provide unmatched security and speed for data transfers. This means that blockchain technology has an application in nearly every industry where value is exchanged. A technological descendant of Ethereum, IOST is a blockchain with the purpose of serving as infrastructure for developers to create decentralized applications. ShipChain ShipChain is a freight and logistics platform built on blockchain. Nano Vision Nano Vision is empowering global citizens to step up and lend their efforts to furthering disease-prevention research and development. Equipped with a working product, Inveniam uses Decentralized Ledger Technology (DLT) and "regulated" contracts and tokens to transform structuring, clearing, custody and settlement of fixed-income instruments. It focuses on creating a decentralized social video ecosystem with a full economic cycle and rewards for creating, curating, viewing and sharing videos. Patron Patron is a global influencer marketing platform built with blockchain technology. Photochain Photochain is a decentralized stock photography platform built on the blockchain.

Six Steps To Achieve Digital Marketing Excellence

As an agency, we don't just think about our customers -- we have to think about our customers' customers. When starting to build a digital marketing strategy that is customer-centric and focused on achieving this excellence, you should first take a deep dive into your current efforts and determine what needs to be done in order to improve it. Achieving management buy-in/involvement is part of the six elements to obtain digital marketing excellence. Developing a workshop with the management team at the beginning of a project helps companies understand what you are going to help them do, and who needs to be constantly involved for a better execution. As an agency, we don't just think about our customers -- we have to think about our customers' customers. When starting to build a digital marketing strategy that is customer-centric and focused on achieving this excellence, you should first take a deep dive into your current efforts and determine what needs to be done in order to improve it. Achieving management buy-in/involvement is part of the six elements to obtain digital marketing excellence. Developing a workshop with the management team at the beginning of a project helps companies understand what you are going to help them do, and who needs to be constantly involved for a better execution. Having the right data helps us make better decisions. A correct integrated customer communications strategy means your multichannel communications strategy is developed for individuals who are at a different stage in their buying journey.

Can Millennials confront the looming threat of aging Baby Boomers?

The Silent Generation and Baby Boomers are sitting on a whopping $13.5 trillion worth of home inventory, but aging Boomers are expected to trigger a large exodus from the housing market in upcoming years. In May, the National Association of Home Builders reported that home sales to homebuyers over the age of 55 fell an astonishing nine points. The number of Baby Boomers exiting the housing market is only expected to increase, spurring fears of a bursting “generational housing bubble” in which Millennial homeownership demand cannot fill the void, according to Fannie Mae. Millennials typically face more obstacles when buying homes than other generations, due to factors like unemployment and personal debt. Furthermore, an increasing amount of Millennials are foregoing family expansion and remaining renters themselves. Fannie Mae states that the housing industry can achieve this by implementing business and policy interventions designed to facilitate an orderly handoff of Boomer housing assets to younger generations. For example, in the last several years mortgages with lower down-payment requirements and more flexible debt-to-income ratios have launched Millennials into homeownership, enabling them to grow equity that might eventually position them to purchase homes vacated by Boomers, according to Fannie. Although student debt threatens mortgage payment capacity, the promotion of higher education and job skills could also position Millennials for homeownership. In fact, First American determined that the correlation between homeownership and education has nearly doubled in the past 10 years. As aging Baby Boomers exit the housing market, the industry will need to discover ways to ensure Millennials pick up where Boomers left off.

Who uses a reverse mortgage to purchase a house?

It’s safe to say that many people know that a reverse mortgage is a loan that can be used by a older homeowner who wants to extract the equity in their house. But what many people don’t know is that there is a type of reverse mortgage that can be used to purchase a house. And while it’s not for everyone, it could be a retirement gamechanger for a good number of people. According to the National Association of Realtors, older adults comprise 38% of homebuyer market, and most choose some kind of financing. It’s called a Reverse for Purchase or, using the official product name Home Equity Conversion Mortgage, a HECM for Purchase. From January to May 2018, the industry closed just over 1,000 of these loans. “The main reason that the HECM for Purchase has not blossomed is not because there’s anything wrong with the product, it’s because our industry doesn’t know how to deal with Realtors,” said Professional Mortgage Alliance President Michael Banner, who has spent years teaching Realtors around the country about the product. The HECM for Purchase could allow them to buy the home that they want and not have to use 100% of their cash,” Bruser said. “As the saying goes, ‘You can be young without money, but you can’t be old without money.’” Banner noted that for Realtors, this product could be especially lucrative. Realtor, what would you like a commission on – a $300,000 house or a $400,000 house?

Study: Millennials wrestle with the American Dream of homeownership

People talk about how the American Dream of one day owning a house is still something that Millennials want and are actively pursuing, and that still appears to be true, but for many Millennials that dream is dying, dead or undesirable. The recipe for the Millennial American Dream goes something like this: owning a home, being debt-free, retiring comfortably, pursuing passion. But, according to Bank of the West’s annual Millennial Study, only 54% of Millennials believe that the American Dream is attainable, and nearly a quarter of Millennials say they’ve given up on their dreams of homeownership. With prices on the rise, homeownership has become increasingly difficult for Millennials. The majority of Millennials are still renting or staying with friends or family, and only 42% own a home. Although typically seen as wanderlust infected jetsetters, homeownership appears to be something Millennials still want. The report indicates that 69% of Millennials anticipate staying in the same area for the next 10 years as they pursue things like stability, getting out of the rent cycle and having a place to truly call their own. According to the report, these are the top three drivers of Millennial homeownership: stability; homeownership making more financial sense than renting; and wanting a place they can modify and make their own. According to the report, 68% of Millennial homeowners have buyer’s remorse, wishing they had been more prepared, had more money down or had better inspected the home before they bought it. The main complaints Millennials have about their homes is that they are costly to maintain (20% feel this way) or they found damage after moving in (20% of Millennials also feel this way).

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