What Is a Carriage House? Horses Not Included

What is a carriage house? If you're thinking this sort of building has something to do with horses, you're essentially on the right track. https://www.houzz.com/photo/847024-carriage-house-traditional-shed-boston Contemporary examples of carriage houses The carriage houses you see today are either updates on the old structures or new homes built in the style of a carriage house. The living space will be in either the actual carriage house on the second floor, or an adjacent building. "The carriage house really gives homeowners the opportunity—architecturally or designwise—to have some fun," Kallos says. The words "house" and "home" are often used interchangeably, but if you come across the term "carriage home" in a listing, don't expect to see a carriage house when you roll up to the showing. A carriage house and a carriage home are very different structures. While a carriage house is large enough to accommodate a horse-drawn carriage, a carriage home is a single-family dwelling that sits on a lot not much bigger than the structure itself. They're structures that are sometimes called patio homes or zero-lot-line homes. "Generally, there is a small private patio that serves as the only outdoor living space," Smith says.

Exceeding Inflation, Home Prices Rising Swiftly

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index’s 10-City Composite, which is an average of 10 metros (Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.), rose percent 6.1 year-over-year, up from 5.9 percent in October. The 20-City Composite—which is an average of the 10 metros in the 10-City Composite, plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle and Tampa—rose 6.4 percent year-over-year, up from 6.3 percent in October. Month-over-month, the 10-City Composite and the 20-City Composite both rose, 0.3 percent and 0.2 percent, respectively. “Home prices continue to rise three times faster than the rate of inflation,” says Blitzer. “The S&P CoreLogic Case-Shiller National Index year-over-year increases have been 5 percent or more for 16 months; the 20-City index has climbed at this pace for 28 months. Given slow population and income growth since the financial crisis, demand is not the primary factor in rising home prices. Construction costs, as measured by national income and product accounts [Commerce Department data], recovered after the financial crisis, increasing between 2 percent and 4 percent annually, but do not explain all of the home price gains.” Blitzer explains that because of costs, fewer homes have been manufactured, pressuring prices. “From 2010 to the latest month of data, the construction of single-family homes slowed, with single-family home starts averaging 632,000 annually,” Blitzer says. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

Pending Home Sales Edge Up

Pending home sales edged up in December, 0.5 percent in the National Association of REALTORS® (NAR) Pending Home Sales Index (PHSI). Two of the four major regions in the U.S. saw increases in the PHSI in December, with the South up 2.6 percent to 126.9 and the West up 1.5 percent to 101.7. “Another month of modest increases in contract activity is evidence that the housing market has a small trace of momentum at the start of 2018,” says Lawrence Yun, chief economist at NAR. “Buyers throughout the country continue to be hamstrung by record low supply levels that are pushing up prices, especially at the lower end of the market.” Additionally, sales could be slowed by the Tax Cuts and Jobs Act, according to Yun. “In the short term, the larger paychecks most households will see from the tax cuts may give prospective buyers the ability to save for a larger down payment this year, and the healthy labor economy and job market will continue to boost demand,” says Yun. Just how severe is still uncertain, but with homeownership now less incentivized in the tax code, sellers in the upper end of the market may have to adjust their price expectations if they want to trade down or move to less expensive areas. This could in turn lead to both a decrease in sales and home values.” Realtor.com® Senior Economist Joseph Kirchner, Ph.D., said the following about today’s Pending Home Sales numbers, which foreshadows a very competitive spring buying season. “Today’s 0.5 percent increase in December pending home sales shows just how far buyers are willing to go to close on their dream home. Holiday plans and winter weather usually result in a December real estate slow down, but not this time. For more information, please visit www.nar.realtor.

2.3% GDP growth held back by new-home shortage in 2017

The current-dollar GDP increased 5.0 percent to $19,738.9 billion. Overall, real GDP increased 2.3 percent in 2017 — 0.8 percentage points higher than 2016’s growth (1.5 percent), and the current-dollar GDP increased by 4.1 percent to $19,386.8 billion. But housing construction still did not fully get back to historically normal levels,” Yun said in an emailed statement. “Only 1.2 million housing units were constructed compared to the historical average of 1.5 million starts a year. This underproduction is the principal cause of the ongoing housing shortage, and why the economy did not fully get back up to 3 percent GDP growth possibility last year.” “Even in the private business sector, spending for equipment and software soared, but not for commercial building constructions,” he added. But Yun is optimistic about 2018, saying tax reform should get the U.S. economy back to 3 percent growth, or even 4 percent if residential construction gets back up to historic norms. This would in turn lead to a spectacular gain of near 4 percent GDP growth in 2018.” Other data from the U.S. Department of Commerce: Current-dollar personal income increased $178.9 billion in Q4. Disposable personal income increased 3.9 percent ($139.0 billion). Real disposable personal income increased 1.1 percent. Read the full report here.

How much do millennials have saved for a down payment?

Despite driving much of buyer demand and activity, this group of 18- to 37-year-olds still faces a number of roadblocks on their way to homeownership — namely student loan debt and rising home prices. According to a recent study by Apartment List, since 1980 the median home value has jumped by 60 percent and the average cost of undergraduate tuition has grown by 160 percent. On average, and taking into account expected down payment assistance from family, recent college graduates (those surveyed were renters between the ages of 22 and 35) with student debt are managing to save $6,500 toward a down payment on a home — double the amount of high school grads ($3,400) and half the amount of college graduates with no debt ($13,900). At that rate of saving, Apartment List found it will take college graduates with no debt 7.9 years to save a 20-percent down payment for a median-priced condo. Apartment List says saving for a down payment in an expensive city could take more than 20 years for someone without a college education. SmartAsset’s latest study drives this point home since no “big cities” made their top 10 list of cities with high millennial homeownership rates. SmartAsset notes that millennials can circumvent the long down payment savings process by taking advantage of 3.5 percent FHA loans and first-time buyers programs that many states offer. Average down payment savings and estimated years needed to save a 20 percent down payment are based on data from only those respondents who stated that they plan to purchase a home in the future. Survey responses to questions on down payment savings are stated in ranges (e.g. “$100 to $199”). First, we ranked each city in each metric.

Average U.S. home has gained $55k in value since housing bust

Furthermore, the average U.S. home is now worth $55,200 more than it was at the bottom of the housing bust. On the other hand, The Sand States (California, Florida, Arizona and Nevada), excluding California, have yet to fully recover from the disproportionate impact the housing bust had on them. Meanwhile, the median home price in San Jose is $615,000, three times the value that was lost. During the recession, San Francisco homes lost $225,000 in value, but now, homes have gained 91.7 percent of their value back from the December 2012 crisis low, bringing the median home value to $435,700. Los Angeles and San Diego have experienced relatively strong recoveries with homes gaining back 64.5 and 62.6 percent of their value from the crisis low, respectively. Meanwhile, Zillow classifies Denver as an outlier that didn’t experience much of a housing bust, since home values only fell 9 percent. But Denver median home values have climbed to $379,500 — 61 percent higher than the highest value reached during the mid-2000s bubble. “A decade after the financial crisis, the scars of the housing bust are still with us,” said Zillow senior economist Aaron Terrazas in a press release. “The gap between the metros with the strongest and weakest housing market recoveries is as wide as it has ever been.” “The California Bay Area’s housing recovery stands out when compared to other markets that saw similar home value appreciation because it has more than regained all of its lost value,” Terrazas added. “Strong, high-paying job markets and persistently limited inventory sent prices skyrocketing, leading to the Bay Area having the most valuable housing markets in the country.” See the rest of the list here.

SEC accuses California men of running $2.18 million home flipping scam

The Securities and Exchange Commission is charging two California men with running a home flipping scam that defrauded dozens of investors out of their retirement savings. According to the SEC, Daniel Vazquez serves as the CEO of Hoplon Financial Group. Through Hoplon, Vazquez created the “New Economic Opportunities Fund,” an entity that purported to buy and flip residential real estate using investor funds. These investments were made on the basis of “misrepresentations” about how much compensation Vazquez and Hoplon would take for running the operation. According to the SEC, Hoplon and Vazquez, with the aid of Hoplon’s then-chief operating officer, Gilbert Fluetsch, allegedly misused most of the investors’ funds funds to pay unrelated business or personal expenses, including approximately $780,000 that was misappropriated since January 2013. “Vazquez and Fluetsch perpetrated this deception by raising money from investors with promises that investor money would be used to purchase and renovate real estate and that Hoplon’s compensation would be strictly limited, while in reality they were draining most of the money from (New Economic Opportunities Fund) accounts for their own purpose,” the SEC alleges in its complaint. According to the SEC complaint, Vazquez and Fluetsch actually did purchase some properties, and were actually successful in turning a profit by flipping those properties, but did not make enough money to cover the money they took for their own use. “Despite its failure to fully invest offering proceeds, (New Economic Opportunities Fund’s) real estate transactions did turn a modest profit. However, the profits obtained by (New Economic Opportunities Fund) were not nearly sufficient to cover the amounts being diverted to Hoplon, Vazquez, and Fluetsch.” The complaint alleges that, by promoting and selling these securities, Hoplon, a state-registered investment adviser, and Vazquez, a registered representative of a broker-dealer, violated federal broker-dealer registration provisions. The SEC charged Hoplon, Vazquez, and Fluetsch with a number of securities law violations.

Flat-fee real estate agency Purplebricks plans expansion to New York

Last year, flat-fee real estate agency Purplebricks expanded into the U.S. after building a successful business in the United Kingdom and Australia. The company charges sellers a flat fee of $3,200 to list their home and a “highly competitive” buyers’ agent commission of 2.5% once the home sells. According to Purplebricks, the New York designated market area, which includes more than 20 million people in select counties across New York, New Jersey and Connecticut, is “particularly well suited” for what the company has to offer. The company claims that real estate commissions can reach as high as 7% in the New York area, and with an average home sales price of approximately $560,000, its flat fee model will save buyers thousands of dollars. We are providing a simple and convenient way for both buyers and sellers to conduct business and save thousands of dollars at the same time,” Purplebricks U.S. CEO Eric Eckardt said. We are excited about our planned entry into the New York DMA, which is the largest in the U.S. with more than seven million households.” According to the company, Purplebricks can charge less than other real estate agencies because it offers a technology-focused selling experience. Sellers can also used Purplebricks’ “easy-to-use online platform that provides an unparalleled level of control and transparency over the entire sales process.” Purplebricks is “currently recruiting” licensed real estate professionals in the New York area to serve as the company’s local real estate experts. “It is a sign of confidence in the potential of the U.S. business that we are today announcing our expansion to cover both the East and West coasts, with our planned entry into the New York market,” Michael Bruce, founder and group CEO of Purplebricks, said. “With higher than average rates of commission and transaction volumes, New York was the natural first move on the East Coast for Purplebricks. Our local team have an in-depth understanding of the U.S. market and considerable experience of New York specifically,” Bruce added.

How Your Real Estate Notes Can Rise in Value Through Phantom Appreciation

“Appreciation” is often used to describe something that increases in value, such as a piece of real estate. This happens often in commercial real estate, where an increase in cash flow raises the value of the property, allowing the property owner to refinance. Related: 5 Areas to Study to Know if You Bought a Good Real Estate Note Deal Phantom Appreciation Phantom appreciation is really just a made up term to describe when a note rises in value. Notes are much different than real estate because note values, especially the UPB (or unpaid principal balance), are usually going down over time (unless it’s an interest-only loan) as long as the P+I (principal and interest) payment is being paid by the borrower. I remember how shocked I was when I first found out that a newly originated mortgage could sell for more than the UPB (i.e. $100,000 loan could sell for $103,000-$105,000) if the borrower is an A+ candidate with a strong likelihood to pay consistently and to pay a high amount of interest over time. If an investor had come in and bought this loan for 105% of its UPB 18 months after I started making payments on it (showing a solid pay history), that note buyer would still be getting a nice yield of over 6% over 28.5 years. So, what could this mean for a note investor who bought a re-performing note at a discount? Changing Real Estate Market The second big way one encounters phantom appreciation is from a rising real estate market. It actually takes a down real estate market at first to create this scenario since note values are in direct correlation to real estate values. Cash outs are more common when the economy is improving, unemployment is low, or real estate values are increasing because these factors make it more likely that borrowers will have the means and desire to refinance out of their previous loan.

Blockchain expert: “It’s not going away”

In a conversation with HousingWire's Sarah Wheeler, Hoffman discussed blockchain technology in relation to the mortgage industry. "We’re still in early stages of this, so I equate it to an automobile on a dirt road behind a horse and buggy. Our infrastructure is not there yet, but it is being developed.” Hoffman said. It will not take away jobs but it will change how we do things.” Hoffman explained to conference attendees the originations of blockchain and stressed the differences between it and bitcoin, which is commonly confused with blockchain. "They’re not the same thing," Hoffman explained. "Blockchain is the technology behind digital currencies, such as bitcoin or others," Hoffman said. "Whatever comes of bitcoin or others, the technology still remains." In an interview with HousingWire, Hoffman explained her goal in the mortgage space is to help people understand the importance and the uses of blockchain technology. "Without any discussions, your executive leaders are not going to push the technology forward," she said. "Yes, it’s technology, but so was the Internet and you don’t need to understand all the inner-workings of the Internet, but you need to understand how you can power it to help your business move forward.”

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One Year into New Presidency, ‘Uncertainty’ Looms in U.S. Housing Market

A year into President Donald Trump’s term, the overall U.S. housing market remains strong. “It’s not so much what the event was, just that it’s over,” Mr. Miller said. “So it’s more a question of what the party will do, rather than put it all on Trump.” And it could be up to two years before the effects of any policy changes made during his administration will be manifest in the U.S. real estate market, Mr. Andres Carbacho-Burgos said. “What the housing market had been starved for under President Obama was inventory,” Ms. Richardson said. The overall market, however, was up 6.9% to $234,851. On the high-end of the market, Mr. Miller said there’s still too much “aspirational pricing,” which is one of the reasons sales are softer for luxury homes than lower-priced homes. This has more impact on the high end of the market, less impact on the lower end. “It took years to get there, and now we have to do it again.” The tax bill Although the tax law is now a done deal, it’s still unclear how far-reaching the ramifications will be. “It’s not so much what the event was, just that it’s over,” Mr. Miller said. “Once people can get their arms around it and make calculations, they can re-enter the market.” He added that was from his observations only, as the final numbers on sales are not yet available.