Is Modern Farmhouse Dead? Is Boho Big? Here Are the Design Styles Soaring in 2022—and the Ones Crashing

Design Styles 2022

Photos courtesy of Curatedinterior / Decoraid / Right Meets Left Interior Design

While some of us may only just now be getting around to taking down our holiday decor (seriously, get rid of the tree already!), the start of the year is traditionally one of the prime times to get rid of the old and usher in the new. And right now, the process can be even more impactful: a much-needed catharsis after a rough, pandemic-dominated few years.

So as we get closer to the start of peak home-selling season, homeowners considering listing their homes this spring may want to consider giving their decor a face-lift. But which decor style should they embrace? Much like national and local health advisories, recent design trends are all over the place. Is minimalism still a thing? Is Hollywood glam still glamorous? Are the death notices for modern farmhouse greatly exaggerated?

What’s in and what’s out this season can be overwhelming for those who aren’t professional interior designers. That’s why Realtor.com® dug deep into Google search trends data to figure out which interior styles will likely dominate 2022—and which ones are starting to look as dated as the outdoor Christmas lights practically begging to be taken down. (Come on, it’s nearly February!)

We found that these days, the hottest styles are all about comfort.

That makes sense given how much time folks are spending in their homes these days due to the ongoing COVID-19 pandemic and rise in remote work. Another trend is more, well, more, as people are looking to immerse themselves in uplifting decor that makes them happy just being in their spaces.

It’s a stark departure from the minimalist and sleek styles showcased on TV design shows the past few years, says Cortney McClure, a Bartlesville, OK–based designer.

“What started as simple and clean has started to feel sterile and cold, which are two of the last things people want right now,” says McClure.

To get a better sense of what’s changing and why, we analyzed Google Trends, which looks at search interest in a topic or term, over the past five years. A value of 100 represents the term’s peak popularity, while 50 means it is half as popular. A score of 0 means there was not enough data for this term, or more plainly, not enough people were searching for it.

So what’s hot and what is most definitely not as we head into 2022? We crunched the data and got details from top global designers to find out.

Interest in the boho trend has more than quadrupled since 2017.

Scarlett Kuang for Realtor.com

As British textile designer William Morris once said: “Have nothing in your houses that you do not know to be useful, or believe to be beautiful.”

The bohemian (aka boho) style seems to accomplish just that, with an eclectic mix of practical, homemade items and fun-loving, artsy decor. We’re talking woven wall hangings, rattan furniture, natural-looking woven rugs, and all those other homey touches that make boho such a welcome addition.

In other words, it’s no surprise to designers that interest in this beloved trend has more than quadrupled since 2017. And it’s still trending way up. Expect it to be a fixture for the foreseeable future.

“This style is all about personal expression, comfort, and ease of living,” says L.A.-based interior designer Mark Cutler, of Cutlerschulze.

Interest in “cottagecore” spiked due to the pandemic and got a lift from artist Taylor Swift.

Scarlett Kuang for Realtor.com

Cottagecore,” an even cozier interior trend, is also heading straight up in popularity, with no signs of slowing in sight. The trend, which started as a Gen Z/millennial social media trope and exploded into a full-blown movement during the pandemic, is all about embracing simple comforts, often through a nostalgic lens.

It hit high gear as city dwellers fled to the burbs and beyond in search of a simpler, country life. It got another bounce from perennial trendsetter Taylor Swift, whose smash album “Folklore” evoked the trend.

While slightly similar, this trend is replacing the popular modern farmhouse trend, which may be on its way out (see more below), according to designers.

“More than shiplap and wooden dining benches, what people really want right now is this connection to a true family home. The kind of place where your kids’ heights are written in the doorway,” says McClure.

The industrial design style has remained on trend.

Scarlett Kuang for Realtor.com

Not all trending designs are looking back toward antiquity. In fact, modern industrial styles and interiors are still very much in vogue, with interest up 12%.

The industrial design style may bring to mind cold concrete and metal, but it also consists of natural looks of brick, wood, and other earth elements, says New York–based designer Doreen Amico-Sorell, of Sorell Interiors.

With beloved stripped-back details, industrial design is very much a back-to-basics approach to interiors that includes details like unfinished furniture, exposed beams, and metallic accents in silver and bronze.

“It’s about embracing what was once old and is now new again,” says Amico-Sorell.

Interest in Hollywood glamour has declined as people shift their priorities.

Scarlett Kuang for Realtor.com

Keeping in line with the trend toward simpler living, decadence and glamour are on their way out of style. After nearly two years of living in sweats and slippers, folks are apparently seeking out simpler styles in their homes as well.

Inspired by the golden age of Hollywood, this design trend is all about bold colors and textures, especially those beloved by old Hollywood, like animal prints and other dramatic patterns. But Hollywood glamour seems to have lost a lot of its sheen—with interest dropping by nearly a third over the past five years.

Now, designers say, it’s being replaced with similar materials but with a slightly less polished look. For example, mirrors are still hugely popular, but now they tend to be antiqued, while crystal elements like chandeliers are more tumbled, less perfect, and more natural.

“The world is becoming more aware of what’s truly important,” says Amico-Sorell. “Things such as family, sustainability, and wanting to give back and pay it forward fly in the face of selfish opulence. In short, the current generation is no longer quite as interested in the superficial.”

Interest in minimalism has declined in favor of maximalism, which is all about surrounding yourself with things you love.

Scarlett Kuang for Realtor.com

While over-the-top luxe might be out, so is any sense of deprivation—aka minimalism. Spare designs with just the absolute bare necessities are starting to become extinct. What’s taking its place is maximalism, which embraces the concept of “more is more.”

While interest in a pared-down, minimalist look had steadily been gaining steam since at least 2017, it started to slip last year. Meanwhile, maximalism, which was barely on people’s radars until 2021 (as evidenced by the lack of search interest, bottom trend line), saw a huge spike since the pandemic.

Unlike Hollywood glamour, maximalism is more about surrounding yourself with things you love, rather than showing off. This means combining decor pieces that mean something to you, no matter how crazy, mismatched, or over the top they may seem. (This could take the form of a crowded gallery wall or mounds of bright throw pillows.)

“People are in their homes so much now, they want to surround themselves with a curated mix of things that make them feel good, in a variety of colors, patterns, and textures,” says L.A. designer Allison Knizek.

While modern farmhouse has been a big trend the past few years, it appears to have hit its peak.

Scarlett Kuang for Realtor.com

If you’ve started to feel like the term ‘modern farmhouse’ is a bit overplayed, you’d be right. The beloved trend made famous by Joanna Gaines in the HGTV phenom “Fixer Upper” seems to have finally reached its peak.

After a quick rise over the past few years, the modern farmhouse trend, which combines a cozy, traditional country style with clean and modern touches, is finally being put out to pasture. You know the looks we’re talking about: barn doors, shiplap walls, rustic cupboards, and natural linens galore.

“Like all trends in interior design, there’s an attached life span,” says Amico-Sorell. “And this one just happens to be coming to an end, being replaced by a greater nod to the classics.”

The post Is Modern Farmhouse Dead? Is Boho Big? Here Are the Design Styles Soaring in 2022—and the Ones Crashing appeared first on Real Estate News & Insights | realtor.com®.

‘Full House’ Creator’s $85M Estate Is the Week’s Most Popular Home

Most Popular home

Realtor.com

Jeff Franklin created the beloved TV show “Full House” and reaped some serious rewards. For further proof, you need only take a look at his $85 million estate in Beverly Hills, CA.

You won’t be alone in checking out the home known as the “Cielo Estate.” Fans of the show and real estate gawkers made the massive mansion this week’s most popular home on Realtor.com®.

Aside from that popular palace, you also clicked on a number of humbler homes. There’s one in New Jersey listed for just $156,000, which needs new owners to come in and rip out the teal carpet, as well as a custom home in North Carolina covered in loud colors that’s in need of a new vision.

If you’d rather not put in any work on your next home, there are a few adorable choices on our list as well—including a storybook home in Virginia.

For a full look at all of the week’s most popular homes, simply scroll on down.

10. 6412 N. Eden Rd, Elmwood, IL

Price: $565,000
Why it’s here: Nestled in the woods on more than 13 acres, this four-bedroom, moss-green home was built in 1995.

Recent updates include a new kitchen, fresh carpet, and a walk-out basement with a new fireplace. The surrounding property comes with its own stocked and aerated pond, as well as a heated shed with custom indoor bar.

Elmwood, IL
Elmwood, IL

Realtor.com


9. 105 Waterford Rd, Hammonton, NJ

Price: $156,000
Why it’s here: This roomy 1956 five-bedroom rancher is ripe for a remodel.

An unpolished gem, it sits on just over an acre in historic Hammonton. It features a full basement, two-car garage, storage, and a large backyard, making it a solid pick for a future family. The siding has been ripped off in sections, and the teal carpet is way past its 1980s prime, but the home still has potential for an ambitious buyer to unlock.

Hammonton, NJ
Hammonton, NJ

Realtor.com


8. 8971 Charington Ct, Pickerington, OH

Price: $359,900
Why it’s here: A brick beauty from every angle, this four-bedroom, 3,169-square foot home sits at the end of a cul-de-sac, with the 7-acre Chevington Woods nature reserve just beyond.

Built in 1976, the home has three fireplaces, an updated kitchen, updated hardwood floors throughout, and a large backyard with two private decks.

Pickerington, OH
Pickerington, OH

Realtor.com


7. 100 Stafford St, Stafford, CT 

Price: $324,900
Why it’s here: This crisp white Colonial packs whimsical touches, evident in the bright-red front door. It also has plenty of privacy, thanks to the surrounding forest.

It’s known as the Stafford Home and was built in 1805. Recent updates to the four-bedroom classic include a kitchen with sliding doors out to the porch.

Sitting and dining rooms still feature wide board floors, and the highlight of the family room is a brick fireplace with a custom mantel and built-in bookshelves. On the 3-acre property, there’s also a barn, stone walls, and mature trees.

Stafford, CT
Stafford, CT

Realtor.com


6. 7549 Tayside Dr, Blacklick, OH

Price: $243,500
Why it’s here: Pretty and priced to sell, this three-bedroom home built in 1992 sits on just under a half-acre.

Inside, there’s a fabulous fireplace in the great room, a partial basement, and a work-from-home space. There’s also a heated four-season room and a striking, dark-trimmed exterior paint scheme with tons of curb appeal.

Blacklick, OH
Blacklick, OH

Realtor.com


5. 11 Cliff St, Dennis, MA

Price: $475,000
Why it’s here: Close to beaches, shopping, and dining, this pretty two-bedroom home has an updated kitchen and a secondary living space with refinished pinewood floors.

It’s freshly painted inside and out, and in the primary suite, you’ll find a sunroom with new tile, an updated kitchen, and cathedral ceilings. There’s also a barn on the property, and the listing notes that the barn’s second floor would make a great home office or studio.

Dennis, MA
Dennis, MA

Realtor.com


4. 203 Dalebrook Cir, Greenville, NC

Price: $449,900
Why it’s here: The commitment to color throughout this house is quite distracting, but there’s nothing that can’t be fixed with a few new coats of paint. Built in 1965, this home filled with lively art is ready for a revival.

Beyond the color palette, the five-bedroom home offers a circular great room, a large open foyer, and views of the surrounding the half-acre property with mature landscaping.

Greenville, NC
Greenville, NC

Realtor.com


3. 327 York Ave, Staunton, VA

Price: $359,900
Why it’s here: With a steep storybook roof, this dreamy three-bedroom cottage with a bright teal front door was built in 1937. Although it’s 80 years old, it’s decked out with all sorts of modern, high-end details.

Custom millwork, built-in bookcases, dining room French doors, and a porch overlooking the garden are just a few of the charming touches this adorable home offers.

Staunton, VA
Staunton, VA

Realtor.com


2. 76 Skillin Rd, Cumberland, ME

Price: Listed for $269,000 – sale pending
Why it’s here: A former schoolhouse sells quickly. Built in 1875, this place for education was moved to its current location in the early 1900s and converted into a lovely residence.

This cozy red clapboard cottage in the woods went on the market a little over a week ago and is already pending sale. Giving off major cottagecore vibes, the three-bedroom home has been totally updated, with new floors and fresh paint.

Cumberland, ME
Cumberland, ME

Realtor.com


1. 10066 Cielo Dr, Beverly Hills, CA

Price: $85,000,000
Why it’s here: Known as Cielo Estate, this massive mansion is being sold by Jeff Franklin, the creator of the TV show “Full House.”

The gated property includes a main house with a two-story foyer, a custom staircase, and dome ceiling, as well as nine bedrooms and 18 bathrooms. There’s also a detached guesthouse, ocean views, a pool with waterfalls, a 35-foot water slide, swim-up bar, private grotto, and parking for up to 35 cars.

Beverly Hills, CA
Beverly Hills, CA

The post ‘Full House’ Creator’s $85M Estate Is the Week’s Most Popular Home appeared first on Real Estate News & Insights | realtor.com®.

Can’t Make an All-Cash Offer on a Home? These Companies Will Help You—at a Price

Companies help make cash offer on home

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When John Wai decided it was time to pack up his five-bedroom Bay Area home in favor of a less expensive lifestyle on the outskirts of Sacramento, he knew that one of the hardest parts of making it all happen would be the challenge of having an offer accepted on a new home while at the same time attempting to sell his old one.

But in this highly competitive real estate market, he couldn’t make an enticing, all-cash offer on a home until he could first sell his $2 million home in Orinda, CA.

The idea of finding a buyer for the home, packing up his belongings, and then moving into a temporary rental while making offer after offer on a new house was daunting. It felt like way too much hassle—and expense—for the 51-year-old accountant and his wife.

Instead, he turned to Flyhomes, a brokerage and lending company that fronted him the money to make an all-cash offer on a four-bedroom contemporary house in the Sacramento suburb of Woodland, using Flyhomes’ Buy Before You Sell program.

Wai credits the cash and the quick closing time it provided as among the reasons why he won his new home. The sale closed in October.

Flyhomes Inc., which was launched in 2016, is one of several startups offering programs to help buyers win bidding wars in today’s hyperactive housing market. The key ingredient: giving them the ability to make all-cash offers, without having the money handy in their bank accounts.

Though the mechanics of the arrangements they use differ, this new crop of lending companies all aim to provide an alternative to traditional mortgages, to make it easier for first-time homebuyers and homeowners aiming to trade up or downsize in a highly competitive real estate landscape.

Buyers who plan to enter into one of these deals, though, need to do so with their eyes wide open. Having all of that money at their disposal may not come cheap, and as a result, they may wind up paying more over the long term.

“Anytime you enter an intermediary in a consumer-to-consumer transaction, the challenge is: How is that better for a consumer?” says Barry Zigas, a senior fellow at the Consumer Federation of America. “The third party expects to make money from this.”

The idea for many buyers who tap into these loans is to pay them back quickly.

Flyhomes offered Wai a bridge loan, a short-term loan used to bridge the gap between buying his new home and selling his old home, at a rate of 6%. (That’s a standard rate for a bridge loan, although getting a traditional mortgage would have been significantly cheaper. Rates were 3.45% on 30-year fixed-rate loans in the week ending Jan. 13, according to Freddie Mac.)

Wai doesn’t have to make any payments until the Orinda home closes. Then he will pay the whole loan back at once from the proceeds of the sale—which shouldn’t be a financial burden in this case, given that he paid far less than half the price for the new house than he is expecting to earn from the old one.

How companies that help homebuyers make all-cash offers work

Some of these startups, like Flyhomes and Better.com Mortgage, earn their share of the deal by acting as both Realtors® and lenders, earning a commission as the buyer’s agent and on the mortgage. (The cash offer comes with a short-term bridge loan to acquire the property. If buyers want to stick with the company, it will also earn money on their long-term mortgage.)

These companies take their half share of the standard 5% to 6% real estate commission of the sale price, which is negotiated by a flesh-and-blood agent who walks buyers through the process. They say the loan rates they offer are competitive with the larger mortgage market—although they do not specify the exact rates. This type of product tends to completely forgo or limit other fees.

However, if for some reason the loan falls through because of an unforeseen credit issue or job loss, or if the buyer ultimately can’t or doesn’t want to make the purchase, in most cases the company will keep the deposit. With Better.com, that’s 5% of the purchase price, or $15,000 on a $300,000 home.

Other companies that help buyers make cash offers, including Ribbon Home and HomeLight, charge a 1% to 3% convenience fee of the purchase price of the home, if the offer is accepted. In expensive markets like California, that could add up to a substantial amount.

Both first-time and existing homebuyers need to meet traditional underwriting standards for creditworthiness with a good credit score (in most cases, a minimum of 620) and healthy debt-to-income ratio (43% is usually the highest a lender will accept.) But these deals start with a pre-underwriting process that usually happens at the end of a contract—during the mortgage contingency period—which is why they’re able to close so much faster.

As with any transaction, it’s extremely important to read the fine print of an all-cash deal, says Ed Magedson, founder of Rip-Off Report, a consumer reporting website.

“I’ve had consumers contact me because some companies quote them interest rates that change when they actually receive the paperwork with these cash offers,” he says. “Most of these companies are legitimate. But it’s best to deal with a business that’s been around for at least a few years, so a consumer can do a search to see if they are a good company without complaints, assuring them they are less likely to get ripped off.”

All-cash offers are becoming more important in today’s housing market

For Wai, the advantages of Flyhome’s cash-offer program outweighed any potential cons. The first offer he submitted was under contract within a matter of days.

“By the time we submitted the offer to the agent, the sellers had already received another,” says Wai. “But they accepted our offer because it was more compelling, due to the short closing time. Because I hadn’t sold my other house yet, we were able to give the seller[s] a free leaseback period. So they didn’t have to rush to get out of the home.”

All-cash purchases accounted for 23% of sales of existing homes in December, according to data from the National Association of Realtors®—a mind-boggling trend, given the spike in home prices. The figure did not include new home sales in that percentage, however.

Sellers like these offers because buyers appear more financially stable than those who offer a low down payment. Cash offers often close more quickly, and they may have fewer strings attached than when using a mortgage, depending on the type of loan.

In some states, like Florida, about half of the homes sold were paid for in cash, according to the National Association of Realtors. Nevada, Arizona and West Virginia also experienced staggeringly high levels of all-cash sales.

This influx of all-cash real estate transactions dates back to the mid-2000s housing bust, when a tsunami of foreclosures flooded the market.

A slew of corporations bought up single-family homes with the intention of converting them into rentals, amassing huge property portfolios bankrolled by and benefiting Wall Street investors. But home prices have since risen substantially—especially during the pandemic.

Zigas, of the Consumer Federation of America, worries about the impact on the housing market of empowering more buyers to make all-cash offers.

First-time buyers who’d prefer to use a more conventional loan may find it even harder to land a deal when sellers are being presented with all-cash offers and quick closes. The availability of such funds could also incentivize buyers to pay more to secure a home by using a service of this kind in certain instances.

Perks of using firms that help homebuyers make all-cash offers

Flyhomes, for example, which boasts cash offer programs for both existing and first-time homebuyers, claims that its Cash Offer program has enabled clients to purchase their home 4.5 times faster than buyers using traditional mortgages—saving them the agony of losing out on offers again and again.

According to the company’s data, their clients save money on the purchase price, too. It says more than half of the time, Flyhomes customers win bids even though their offer is not the highest presented, saving an average of nearly 3% on the home price compared to the highest competing offer.

“The power of cash has always existed with investors,” says Tushar Garg, Flyhomes’ CEO and co-founder. “We democratized it by making all of our buyers cash buyers.”

Sellers these days, of course, regularly receive multiple offers, giving them the ability to pick and choose from the most attractive terms. In 2021, homes have been receiving an average of at least four offers each, according to NAR. It was just 2.9 offers the previous year.

Startups offering cash-offer programs are growing fast. Ribbon, Orchard and HomeLight Inc. announced new funding rounds in recent months.

HomeLight, which is often used by agents as a listing management tool and source of referrals, launched its Cash Offer and Trade-In programs in select markets this summer. Buyers pay a fee of between 1% and 3% of the sale price of the home, depending on whether they opt to take out a long-term mortgage through the company or another lender.

According to HomeLight founder and CEO Drew Uher, the company also offers a free, 21-day closing option, where it does not take possession of the home, acting instead as both the mortgage lender and title and escrow company.

Bay Area-based Realtor Stephanie Nash suggests her clients shop around for the best mortgage products to suit their needs. After doing a bit of research, she says she would think about mentioning HomeLight Cash Offer as a potential option in certain scenarios.

“It would depend on the client. If they were losing [out on] a lot of properties, it might be something I would consider talking to them about,” she says. “But they would have to understand what they were getting into and if it was worth it to them. In California, especially the Bay Area, it’s a really expensive service, considering our home prices.”

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Is the Housing Market Safe From the Wild Turbulence in the Financial Markets?

Stock Cryptocurrency and Inflation Real Estate

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The volatility over the past few days in the stock and cryptocurrency markets has left many on edge—especially as it comes on the heels of a nation grappling with yet another COVID-19 variant, high inflation, and worker shortages. Add historically high home and rent prices, and many are worried another housing bubble may not be far behind.

However, despite the turmoil adding to the general malaise, real estate experts don’t believe the housing market is headed for another crash. There are far more people looking for places to live than there are homes available—a dilemma that keeps home prices high as renters and buyers compete over a limited supply.

Until that equation reverses—the way it did during the housing bust of the 2000s—home prices are expected to keep rising unless a major, unforeseen disaster strikes.

“If we see a significant sell-off in the [stock] market, that could spill over into housing,” says Bill McBride, who created the Calculated Risk blog and predicted the last housing bubble. “But so far, this is just a little volatility.”

The financial and crypto markets have been rising since they fell on Monday.

McBride isn’t worried about another crash in the housing market—at least not anytime soon. However, he and other real estate and economic experts predict the rate of annual home price growth, which averaged nearly 11.3% last year, will continue to slow down as mortgage rates keep climbing.

When those rates fell to record lows, bottoming out at 2.65% about a year ago, buyers could put what they were saving on their loans toward higher-priced residences. But the higher rates go, the less money buyers have to spend on homes, essentially taking a bite into their budgets. And that decreases the number of folks who can afford higher-priced homes, essentially putting a check on how much prices can increase.

Rates hit 3.56% in the week ending Jan. 20, according to Freddie Mac. While that less than a full point rise might not seem like much, it adds about $150 a month—nearly $1,800 a year—to the mortgage payment on a median-priced home at $375,000. (This assumes buyers put 20% down.)

Even with these speed bumps ahead, the housing market isn’t likely to see prices fall dramatically like in the stock and crypto spaces.

“People are using the quickly rising, record home prices as a sign of a market in danger of crashing. But it’s the wrong yardstick,” says national real estate appraiser Jonathan Miller. He doesn’t see anything in the economy at the moment that could result in home prices falling 30%—or more in some parts of the country—especially during a housing shortage.

Mortgage rates are still low enough to help balance out high prices. So most buyers aren’t taking on more than they can afford, Miller says. They’re not likely to stop being able to make their mortgage payments en masse, which is what happened when the housing bubble popped.

“You have more conservative lending, some of the highest credit scores” from today’s borrowers compared with the run-up to the financial crisis, when “you didn’t have to even have a pulse to get a mortgage,” says Miller.

“It is easy to worry,” says Danielle Hale, Realtor.com® chief economist. “Even before the pandemic, when unemployment was low, people were worried about a recession. Did anyone realize it was going to be caused by a global pandemic? No, I don’t think many people did.”

Years down the road, though, the market could readjust.

“We’ll always see another housing slump. It’s just a matter of when. That’s a given,” says McBride. “Housing doesn’t go in one direction forever.”

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Rental Prices Heat Up in the Sun Belt, Spiking Across the Nation

Sunbelt Rental Prices Rising

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The Sun Belt is hotter than ever.

December marked the sixth month in a row where rental prices rose by double digits annually, spiking the most in Southern and Southwestern cities as well as California. Median rents rose 19.3% year over year in December, to hit $1,781 in the nation’s 50 largest markets, according to the most recent Realtor.com® data.

A handful of warm weather metro areas and cities with booming economies saw rents grow more than 25% year over year in December. And developers can’t build enough rental housing fast enough to offset some of the steep increases, industry insiders say.

“A lot of people, including young professionals and retirees, are attracted to good weather,” says George Ratiu, manager of economic research at Realtor.com. “Most Americans have really evaluated their priorities. Quality of life has become a big component. Weather, access to the outdoors, amenities that make an outdoor lifestyle possible [are] reflected in these top markets.”

In the Miami market, rents were up an astonishing 49.8% compared with a year earlier, with median rents reaching $2,850. The metro was followed Tampa, FL, at 35%; Orlando, FL, at 34.1%; Las Vegas, at 29.8%; and Memphis, TN, at 29.4%. Rounding out the top 10 were San Diego, at 29.3%; Jacksonville, FL, at 29%; Austin, TX, at 28.7%; Riverside, CA, at 27.2%; and Phoenix, at 26.7%.

(Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

“We’ve seen very large rent spikes here in Florida for its warm weather, beaches, and low taxes. People just want to live down here,” says Brad O’Connor, chief economist at Orlando-based Florida Realtors. Some bought primary homes, others purchased vacation properties. “We had a bunch of people from New York and elsewhere buying properties near the coast.”

Single-family home rentals are in high demand right now. But given the shortage of rental and for-sale housing and rising prices, folks may have to compromise on smaller spaces or units without all of their desired amenities.

“People are going to take what they can find,” says O’Connor. “You have to settle in this market.”

Rental price growth is the slowest in California’s pricey Bay Area. Prices in San Francisco’s rental market declined by 2.5% on average, and dipped just under 1% in San Jose, CA. Chicago, Boston, and the New York City markets also had sluggish growth rates at 0.4%, 0.7%, and 1.4% respectively.

Much of that is due to the rise of remote work. Some workers who didn’t have to commute to their offices five days a week moved farther outside of expensive cities or to cheaper parts of the country. That dip in demand led to lower prices.

The good news for renters: With hiring sprees among many employers following on the heels of the “Great Resignation” (people leaving the workforce during the COVID-19 pandemic), Ratiu says employees have more leverage negotiating higher salaries. That can help tenants to afford rising home prices.

“For renters, the real silver lining is in the wage growth,” says Ratiu. “Most companies are expecting to pay more because there’s a real shortage of labor.”

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With Housing Prices Spiking Everywhere, Where Is It Cheaper To Rent vs. Buy?

Rent vs Buy

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To buy or not to buy? That is indeed the age-old question for renters who are flirting with the idea of homeownership amid fast-rising rental prices. But in today’s wild and scary housing market—where prices seem to have no ceiling, mortgage rates are once again climbing, and the number of homes going up for sale is paltry—the answer is a bit more complicated than usual. Check that: a lot more complicated.

Those renewing their leases are often slack-jawed as they’re confronted with steep, double-digit rental hikes—a huge change from just a year ago, when landlords were eagerly giving away concessions such as free months of rent to fill up their buildings. Rents surged more than 19% in the 50 largest markets over the past year, according to the latest data from December from Realtor.com®. That’s even more than the increase in for-sale home prices.

So does it make more sense to buy a home and lock in fixed housing costs before prices and mortgage rates rise even further? Or should folks continue renting while they wait for the seller’s market to (potentially) come back down to Earth? Conventional wisdom has suggested that it almost always makes more financial sense, at least in the long term, to buy rather than rent. But is that still true today?

As is so often the case these days, it all depends on where you live.

So the Realtor.com data team took a deep dive to find the places where it could make more financial sense to become a homeowner—and where it could be cheaper to remain (or become) tenants.

Spoiler: It still makes sense to buy in about three-quarters of the 100 largest metropolitan areas, according to our analysis. The median list price for homes for sale across the country was $375,000 in December, with the median mortgage payment averaging about $1,407 a month in the 100 largest metros. (This assumes buyers put down 10% and does not include property taxes or home insurance.)

While that’s not anything to sneeze at, it’s considerably less than the $1,651 monthly median rental payment. And, of course, homeownership has the big added bonus of building equity.

It’s often easier to purchase in the Midwest and South, which tend to have lower-priced homes, if folks can muster up a down payment. That can mean a monthly mortgage payment is less than a rent bill. Meanwhile, it can be better to rent in pricier, emerging tech hubs and established ones in coastal California—unless money is no object.

“Places where it’s better to rent tend to have much higher-paying jobs, and as a result of that, both home prices and rents are going to be elevated—but home prices much more so,” says George Ratiu, manager of economic research for Realtor.com. That means these places have a high barrier to entry for buying homes.

Home prices have risen significantly since the start of the COVID-19 pandemic, as buyers flush with savings were able to make the move to become homeowners.

Meanwhile, in part because of a national eviction moratorium and partly due to underbuilding, vacancy rates in rentals have reached the lowest level since at least the 1980s, according to the St. Louis Federal Reserve. That means more people are vying for fewer units, making them more costly.

“Last year we saw really pretty staggering rent growth,” says Chris Salviati, senior housing economist at Apartment List.

According to the rental listing website’s rent index, rents jumped 18% in 2021.

“That level of rent growth is not something we had experienced at any time in recent pre-pandemic history,” says Salviati.

To come up with our rent versus buy list, we looked at the median rents of homes in the 100 largest metropolitan areas. (We evaluated all rentals, whether or not they were one-bedroom apartments or four-bedroom houses.) We then looked at the median home prices in those 100 places and calculated the monthly cost of buying with a 30-year fixed-rate mortgage. We did not include other costs that come with homeownership, such as taxes and insurance. Here’s what the data shows:

Where it’s better to buy

Realtor.com

1. Fort Myers, FL

Median home price in December: $444,450
Monthly payment (with 10% down and a 3.5% mortgage rate): $1,796 
Median rent: $4,005

Located on Florida’s southwest coast, the Fort Myers metro, which includes Cape Coral, has long been a popular destination for vacation-home buyers and seniors. They’ve been attracted by the warm weather and reasonably priced housing stock. (The median home price here was $50,000 less than in Miami last month.)

With 400 miles of canals here, potential homeowners can find plenty of places with water access for boating and fishing. But a massive hurricane a few years ago turned the water toxic with foul-smelling algae blooms, a big turnoff for buyers. That’s kept home prices comparatively low here, while inventory isn’t as sparse as other places in the country.

Since then, the Army Corps of Engineers has implemented a water filtration system and prices have started to rise again.

Meanwhile, people who bought homes here before the Great Recession and rented them out have decided to sell, leaving a dearth of affordable rentals, says Mike Lombardo, a broker with Old Glory Realty.

“Even if you wanted to rent something, the probability of getting a rental is pretty low,” Lombardo says.

Buyers looking for a slice of the Florida lifestyle can get a remodeled three-bedroom home with a pool for $375,000.

2. San Antonio, TX

Median home price: $347,250
Monthly payment: $1,414
Median rent: $3,178

With miles of sprawling, flat land and few regulations for builders, this south-central Texas city has seen new homes popping up at a rapid pace. Even older homes that may need updates are being torn down to make room for new abodes.

With lots of places to choose from, competition isn’t nearly as fierce here as in Austin, an hour and a half away. And home prices here are reasonable compared with much of the rest of the country. But of course, affordability is relative to how much people make, and the city’s median household income was about $52,000, according to U.S. Census data.

A newly built, three-bedroom home close to Lackland Air Force Base, a big employer in the area, was recently listed for just $255,000.

3. Scranton, PA

Median home price: $175,000
Monthly payment: $715
Median rent: $2,156

Like a lot of Rust Belt cities, this former coal and industry town has seen its share of struggles over the years, including nearly going bankrupt in 2012. But lately, Scranton has been attracting buyers looking to escape pricey cities in the Northeast, including remote workers looking to settle somewhere more affordable.

Just two and a half hours from New York City, Scranton surprises many transplants with its low home prices and property taxes. While prices have increased since the start of the pandemic, homes in this city made famous as the home to (fictional) paper company Dunder-Mifflin on “The Office” remain a good opportunity for first-time buyers.

A cute, yellow three-bedroom house in need of some cosmetic updates is on the market for just $100,000.

4. Riverside, CA

Median home price: $549,500
Monthly payment: $2,220
Median rent: $3,010

About halfway between Los Angeles and Palm Springs, Riverside offers a far cheaper alternative to both. Buyers here can get more space than they would get in downtown L.A., but it’s close enough that they don’t have to give up all the amenities. (Riverside is within driving distance of Disneyland, mountain skiing, and Orange County beaches.) Homes can sell for less than half of the median price of a home in the L.A. metro area, which has made this a popular spot for first-time and younger buyers.

On top of that, rents are getting more expensive. Riverside recorded one of the biggest rent spikes in the country, according to the latest rental data from Realtor.com—growing by about 30% since last year. That makes the area more appealing to those who want to lock in how much they’re paying on housing each month with a mortgage payment.

5. New Haven, CT

Median home price: $329,900
Monthly payment: $1,311
Median rent: $2,050

After decades of economic decline, New Haven has been on the up and up for the past couple of years.

Home to Yale University, this college town has plenty to offer newcomers, whether they’re taking in a show at the internationally regarded Yale Repertory Theatre or snacking on the city’s famed clam pizza (four words: Frank Pepe Pizza Napoletana). It’s also about a two-hour train ride from New York City, if you’re craving a more traditional slice.

With lots of homes at affordable prices to choose from, buying is a strong option here. A recently listed three-bedroom, Cape Cod-style home is on the market for $275,000.

Rounding out the top10 metros where it’s better to buy are Rust Belt cities St. Louis; Cleveland; Buffalo, NYDetroit; and Chicago.


Where it’s better to rent

Realtor.com

1. San Jose, CA

Median home price: $1.25 million
Monthly payment: $5,009 
Median rent: $1,350

The beating heart of Silicon Valley has long been one of the most expensive housing markets in the country due to high-paying tech jobs and a lack of space to build new, affordable housing. And as big tech companies get bigger—and richer—demand for housing has sent prices to astronomical heights, a trend that local agents don’t think will slow down anytime soon.

“Silicon Valley is flooded with money, No. 1, and No. 2, there is very low inventory,” says Avi Urban, a real estate agent with Compass Palo Alto. “If anything, we might become victims of our own success.”

Plus, as more people are priced out—and with the rise of remote work—there’s been an exodus of workers here. Many have left for other, more affordable tech hubs such as Seattle or Austin, TX. That’s caused rents to buck the national trend and actually fall, though by less than 1%. A 725-square-foot unit with access to a gym and a pool is currently going for about $2,200 a month. It isn’t quite cheap, but just try to find a home here with lower monthly payments.

2. Seattle, WA

Median home price: $675,000
Monthly payment: $2,708 
Median rent: $1,525

The home of Microsoft and Amazon has long been a tech hub and has, in recent years, experienced rapid growth from San Francisco Bay Area transplants looking to spread out. Besides a strong local economy, access to the water and the mountains has made Seattle a haven for outdoor enthusiasts.

But its idyllic location on the Puget Sound means it’s difficult to build homes to meet this new crush of demand. That’s part of the reason home prices have grown so much so quickly, making renting an appealing alternative. A one-bedroom apartment with outdoor space is going for about $1,400 a month.

3. Salt Lake City, UT

Median home price: $572,000
Monthly payment: $2,255 
Median rent: $1,460

Nicknamed the “Silicon Slopes,” the Salt Lake City metro has had a steady stream of software engineers moving from higher-priced tech meccas over the years. This comparatively smaller but more affordable city means those salaries go further, so tech workers are able to splurge on larger, upscale homes and send home prices higher.

But renting here is a cheaper option with more choices, especially since there’s been a flurry of new construction of upscale apartments to fill that need.

For people who don’t mind sharing a bathroom, this two-bedroom unit is going for $1,580 a month.

4. Denver, CO

Median home price: $600,000
Monthly payment: $2,546 
Median rent: $1,954

This gateway to the Rocky Mountains has been rapidly expanding for a while, but things have turbocharged since the pandemic. The outdoorsy paradise truly offers the best of both worlds, with easy access to hiking and skiing as well as world-class dining and entertainment. A big craft beer scene and a well-established legal marijuana market have also helped attract hipsters looking to embrace a chiller lifestyle.

Homes here are expensive compared with the rest of Colorado, pushing some buyers out to suburbs like Boulder, Colorado Springs, and Fort Collins. And plenty are choosing to lease a home instead. Builders have been rapidly erecting rentals to fill the demand.

5. Stamford, CT

Median home price: $907,000
Monthly payment: $3,617
Median rent: $3,000

An hour train ride from midtown Manhattan, Stamford is more than a classic bedroom community. For decades it’s also been home to many blue-chip companies (such as Deloitte and General Electric Co.) and their employees. Buyers here are also attracted to the good schools, low crime, and access to beaches, as well as lower taxes than in New York City.

But this Fairfield County metro is also made up of some of the most expensive ZIP codes in the country, including tony Greenwich and Darien, so buyers have a larger barrier of entry here. Meanwhile, a flood of people coming from Manhattan looking for space during lockdowns sent already high prices higher.

“People left New York and they bought everything, and that drove up prices,” says Elizabeth Casey, a Realtor® with William Raveis.

A construction boom in downtown Stamford means there are plenty of high-end rentals available as a more affordable option, so people can enjoy all the amenities without the eye-popping home prices.

Finishing out the list of the 10 markets where it’s better to rent are hot real estate markets Portland, OR; Boise, ID; Austin, TX; Durham, NC; and Charleston, SC.

The post With Housing Prices Spiking Everywhere, Where Is It Cheaper To Rent vs. Buy? appeared first on Real Estate News & Insights | realtor.com®.

Here Are America’s Next Emerging Real Estate Markets: What Buyers and Sellers Need To Know

America’s Next Emerging Real Estate Markets

Realtor.com / Getty Images

Will big cities become the next hot housing markets for pandemic-weary buyers?

As the COVID-19 pandemic dragged on, more remote communities—mainly suburbs and smaller cities—emerged as real estate victors during a time when buyers sought out affordability and more space in places with fewer people to worry about. However, that trend could now be moving in reverse as more populated, pricier housing markets popped up on the quarterly Wall Street Journal/Realtor.com® Emerging Housing Markets Index. The index is a look at the real estate markets that economists believe will be strong in the months ahead.

While none of the nation’s biggest cities, like New York City or Los Angeles, made this list, the average populations of the top 20 emerging markets topped 500,000 residents in this quarter. That’s more than a 100,000-person rise from the previous quarter.

The fourth iteration of the index is now a mix of coastal communities, particularly in Florida, and more less expensive Southern and Midwestern markets.

“It could signal a reorientation of the real estate market,” says Realtor.com Chief Economist Danielle Hale.

The index identified the top markets for both buyers and investors out of the 300 largest metropolitan areas. It looks at metropolitan areas with strong housing demand and rising prices combined with robust economies, lots of well-paying jobs, a good quality of life, and desirable amenities such as lots of small businesses and reasonable commutes to work. Other factors, such as median days homes sit on the market before a sale, property taxes, and the percentage of foreign-born residents, were also considered. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

Warmer weather markets dominated the top of this list, with Naples, FL, and North Port, FL, metros, which include Sarasota, snagging the top two spots. Both markets are more expensive than the national median price tag of $375,000, according to Realtor.com data for December.

They were followed by Kahului, HI. The median list price was $667,000 in Naples, $445,000 in North Port, and $937,000 in Kahului.

“Some of what we’re seeing is a bit of a seasonal shift,” says Hale. This happens when the weather turns colder and buyers in the North and Midwest may look for homes down South to escape the snow.

“These real estate markets tend to be more active this time of year,” adds Hale.

Florida has always been popular with buyers, but it picked up considerably during the pandemic, says Brad O’Connor, chief economist at Florida Realtors. The southwestern portion of the state—where Naples, North Port, and Cape Coral (No. 6 on the list) are located—is appealing to buyers as there are more single-family homes and it’s less populated than in the Miami region where there are more people and condos for sale, says O’Connor. There is also land still available for development, adding to the supply of new construction.

“The ability to work remotely really opened the door for a lot of people to come to Florida,” says O’Connor. “Beach towns [are] big enough to have the amenities people would like, and you can get a nice-sized home. And they’re more affordable than some of the places people are coming from, like New York. For the untethered worker, it’s a nice place to be.”

The recent surge in mortgage interest rates may also be playing a part in why more expensive cities like Naples and Silicon Valley’s San Jose, CA (one of the nation’s most expensive markets with a median price tag of $1,224,000), made the list. Buyers typically need larger mortgages in these kinds of places. And the more buyers borrow, the more rising rates can inflate their monthly payments.

“That could be accelerating these markets in pricier areas,” says Hale.

The top emerging markets generally have stronger economies, low unemployment, and higher wages. But residents are more likely to need that extra cash as the cost of living tends to be more expensive in these markets.

These places are also attractive to new residents and have seen more folks moving in. More than two-thirds of all home shoppers in these areas were from different metros. That could help to explain why the populations in these markets rose by an average 1% compared with just 0.4% for the rest of the 300 largest metros.

Home listings in the top emerging markets sold quickly in about 40 days—which is roughly 13 days faster on average than in the 300 largest metropolitan areas.

Emerging markets also tended to have larger foreign populations as well, attracting more international buyers from similar backgrounds. Foreign buyers made up 2.2% of all home listing views in the top markets. While that may sound small, it was significantly higher than the 1.2% of views on average that international buyers represented in the 300 largest markets.

These potential home purchasers are more likely to buy in areas with other foreign residents from similar backgrounds.

“It coincides with an increase in activity in travel,” says Hale.

Top 10 emerging real estate markets in the fourth quarter of 2021

  1. Naples, FL $667,000
  2. North Port, FL $445,000
  3. Kahului, HI $937,000
  4. San Luis Obispo, CA $899,000
  5. San Jose, CA $1,224,000
  6. Cape Coral, FL $380,000
  7. Fort Wayne, IN $215,000
  8. Huntsville, AL $362,000
  9. Raleigh, NC $387,000
  10. Burlington, NC $285,000

The post Here Are America’s Next Emerging Real Estate Markets: What Buyers and Sellers Need To Know appeared first on Real Estate News & Insights | realtor.com®.

Volatility of Lumber Prices Hits High Not Seen Since End of World War II—Why Home Buyers Should Be Concerned

Getty Images

The price of a key building material is more unpredictable today than it has been since the end of World War II. And that should worry home buyers and renters alike.

recent analysis from the National Association of Home Builders examined the recent uptick in the cost of building materials, which climbed 1.5% in December per the Bureau of Labor Statistics. The overall increase was driven largely by the rising cost of lumber.

The price of softwood lumber has increased nearly 45% since September, per the data from the federal government. Other data suggests that the price mills are charging for lumber used to frame homes has tripled since August.

Rising prices are one problem, but volatility is another. Over the course of the pandemic, lumber prices have fluctuated dramatically. Between 1947 and 2019, the monthly change in the price of softwood lumber averaged 0.3%. Since January 2020, though, it has averaged 12%.

Not only is that the highest average monthly change over a two-year span since this data first started being collected in 1947, but it is nearly three times the previous record, according to the report.

‘The cost volatility you see in the construction space is in part responsible for some of the price gains in the overall housing market.’

Robert Dietz, chief economist at the National Association of Home Builders

That volatility is producing ripple effects throughout the housing market—a market that is currently struggling due to the record-low inventory of homes for sale.

“When you introduce the cost volatility that you see in major products like lumber, it just makes it that much more difficult for builders to expand their level of home construction, which in turn, reduces the available inventory in the market,” said Robert Dietz, chief economist at the National Association of Home Builders. “So the cost volatility you see in the construction space is in part responsible for some of the price gains in the overall housing market.”

It’s difficult to undersell the importance of lumber to home builders. All told, 90% of the single-family homes built in this country are wood-framed, Dietz said. Comparatively, just 9% are concrete-framed, while the rest are steel-framed.

“As goes the lumber industry, so goes pacing and pricing of single-family home-building,” Dietz said.

In the most direct sense, the volatility in lumber prices has contributed to the higher cost of newly-built homes. The median price on these homes was up 19% year-over-year as of November, the most recent month for which data is available.

‘Higher costs for lumber and other building materials are often passed on to the buyer in the form of higher new-home prices.’

Odeta Kushi, deputy chief economist at First American Financial Corp.

“Higher costs for lumber and other building materials are often passed on to the buyer in the form of higher new-home prices,” said Odeta Kushi, deputy chief economist at First American Financial Corp. “The challenge for builders is how they deal with higher material costs, while keeping new house prices within reach for buyers, particularly in a rising-rate environment.”

The uncertainty in material pricing has the most adverse effect on entry-level housing, Dietz said, because these buyers are more price-sensitive.

And to a degree, the volatility could sway builders toward constructing higher-end homes, since the additional costs are more easily absorbed.

Of course, lumber isn’t just used to build single-family homes. It’s also used to remodel existing homes and to frame individual apartments in multifamily buildings. So to the extent that those activities are also slower or more expensive because of the availability and pricing of wood, it will have ripple effects into the rental market, too.

The defining feature of today’s housing market, whether you’re a home buyer or a renter, is it’s hard to come by affordable options. It’s a reflection of how undersupplied the housing market is—according to Realtor.com, the nation is short some 5.2 million housing units.

“This housing shortage results from the fact that we have seen more new households than new homes over the last decade, and even in the absence of supply-chain challenges and input-price volatility that shortage has stressed the housing market,” said Danielle Hale, chief economist at Realtor.com.

Given how important home-building is in that context, anything that gets in the way of construction will have an outsized impact on households across the country.

“Consumers in the market for a new home should be prepared to wait, and with price volatility and other challenges contributing to delays, the wait is likely to be longer than usual,” Hale said.

The post Volatility of Lumber Prices Hits High Not Seen Since End of World War II—Why Home Buyers Should Be Concerned appeared first on Real Estate News & Insights | realtor.com®.

‘We Moved Here for $10K’: How Cash Incentive Programs Are Changing the Rules on Where Americans Live

Ahmed Zuhairy

Washington, DC, was home to Anela Malik, a food writer, and her husband, Ahmed Zuhairy, a financial crimes analyst, for nearly 10 years before the COVID-19 pandemic hit. Suddenly, rather than spending their evenings out at restaurants and at co-worker happy hours, they were stuck in a cramped apartment, frantically Googling where they’d want to live next.

That’s when they spotted a surprising opportunity online that they presumed at first must be a hoax: If they moved to Northwest Arkansas, they’d get paid cash and other incentives totaling $10,000.

This offer—part of the Life Works Here talent incentive by the Northwest Arkansas Council—had been launched in an effort to revitalize the local economy. But rather than attempt the more traditional route of courting large companies to build offices in the area, the council was taking a more piecemeal approach of investing $1 million to lure remote workers one by one, specifically individuals in STEAM fields (science, technology, engineering, arts, and math).

“We had never even considered this region or heard of these programs,” says Malik, who had stumbled upon the initiative through MakeMyMove—an aggregator site that serves as a matchmaker between cities looking to attract new residents and people looking to move.

While Malik had always worked from home, the pandemic had untethered Zuhairy from his office commute. And even though Northwest Arkansas had never been on this couple’s radar before, they saw that it fit all their criteria: easy access to nature, a vibrant restaurant scene, and tons of bike paths for Zuhairy, an avid cyclist.

The $10,000 cherry on top was the extra nudge they needed to make the leap.

“It offered us a chance to move and start fresh, without going in debt,” Malik explains.

The rising popularity of pay-to-move programs

Offer cash, and they will come: That’s the premise inspiring a growing number of towns and cities across the U.S. to attract people willing to pack their bags and settle down in a new area.

MakeMyMove, which was launched in December 2020 with approximately 25 offers nationwide, now has over 50 programs listed, with new packages being offered each week.

The majority of these initiatives—typically run by the local government and funded through a blend of taxpayer money, community development budgets, nonprofit organizations, and donations from companies and individuals—pay residents in the range of $2,000 to $16,000 in cash, with assorted gifts attached. One of the most generous deals is from Lewisburg, WV, which is offering a $20,000 relocation fee, which includes $12,000 in cash and $8,000 in gifts, including outdoor recreation gear and co-working space.

As these packages and perks have proliferated, towns have become creative in drumming up publicity.

Applicants who move to West Lafayette, IN, get not only $5,000 in cash, but also access to local university resources, including libraries, research labs, and discount tuition. Meanwhile, Manilla, IA, is offering up free land and Greensburg, IN, is attempting to attract young families by offering $5,000 along with child care through its “free grandparents” program, populated by elderly volunteers.

All of this sounds pretty sweet for people looking for a change of scenery—provided they meet certain criteria.

“Most of the programs have qualifications tied to their incentive packages, since the purpose of these programs is to enhance and expand the local economy,” says Evan Hock, co-founder of MakeMyMove.

Many have a minimum income requirement and seek applicants who already work remotely, so that they don’t take jobs from people already living there.

Even among those who qualify, the number of “winners” is limited. Established programs like the one in Tulsa, OK, employ more than a dozen staffers to recruit what are now thousands of residents, but fledgling programs may sponsor only a handful of transplants, making it highly competitive to make the cut. When Greensburg, IN, recently posted a $7,000 grant in the hope of attracting five new residents, it received 1,500 applications. The town is now scrambling to expand funding and accept 25 residents instead.

Aside from meeting certain conditions in terms of a job and income, human factors matter, too, something Malik found out when she applied.

“It’s almost like a college application, where you share information about your work, business, family, and write a short statement,” she recalls. “I applied online and sent it off in the middle of the night and just assumed they’d never get back to me. I was thinking tens of thousands of people must have applied.”

Much to her surprise, about six weeks later, she got a letter in the mail informing her she and Zuhairy had been accepted. Now what?

Can you ‘try before you buy’?

Since blindly moving to a new town for a few thousand bucks might seem like quite a gamble, most of these programs highly recommended that applicants visit first. The trip might even be subsidized, as is the case with the West Lafayette, IN, program—which, every month, offers select applicants a travel stipend and a few nights in a local hotel.

“For a lot of the programs, there is a formal ‘try before you buy’ program,” says Hock. “But for the most part, I think people book a couple of nights in an Airbnb, walk around, and see what it’s actually like.”

This is exactly what Malik and Zuhairy did in August 2021, spending two weeks checking out Northwest Arkansas.

Anela Malik and her husband, Ahmed Zuhairy, took advantage of a pay-to-move program to get them from Washington, DC, to Northwest Arkansas.

Anela Malik

After their trip, they decided to accept the offer and signed a contract (which is typical of most programs). By October, they’d secured a rental home in Lowell, AR, and moved in. Although they didn’t see the house until they arrived, except via FaceTime walk-throughs, they’re loving their new life.

“It’s such an upgrade. We’re in a beautiful three-bedroom home, with a yard and the kitchen of my dreams,” says Malik. “We couldn’t afford a house in DC.”

And as for the money they were promised?

Not surprisingly, none of these programs just hands you a suitcase of cash as soon as you step off your moving truck. Malik and Zuhairy were given half upfront, after showing proof that they’d moved; they’ll get the other half six months later. Some require you to stay put for a year before they show you the money.

“For us, the incentive just went toward moving costs, like hiring movers, getting set up. It’s not like we made money,” says Malik.

Hock concurs that moving through these programs is rarely a huge windfall.

“The cash offer that many communities provide may seem like a random figure,” he says, “but it’s actually meant to cover the cost of moving an average American family.”

Why more Americans are moving for money

Although picking up and moving for a little cash might seem drastic, the pandemic has put this possibility within easier reach of the growing number of remote workers. According to a July survey by MakeMyMove of over 1,000 applicants on its site who worked remotely, almost one-third (29%) said they were either “likely” or “somewhat likely” to move in the next 18 months.

As for why, 37% of survey respondents said they wanted to relocate for a lower cost of living. Other reasons included a desire for more affordable housing (31%), more room or a bigger yard (27%), better weather and climate (30%), and a chance to meet new people and make new friends (28%).

How pay-to-move programs help revitalize communities

Traditionally, local revitalization attempts have involved cities courting huge corporations with an array of tax breaks and other incentives to persuade them to open offices or factories in their area.

“This strategy for economic development has been utilized for decades by local economic boards,” says Hock.

Pay-to-move programs are overturning this model. Small towns and cities that never had a hope of attracting a new Google headquarters or an Amazon call center now stand a better chance to attract many of those same employees—and thus build their population and local economy one resident at a time.

“Now, we see economic development happening on an individual employee level,” Hock says.

Cities that redirect their recruitment efforts from companies to individuals often find that this tactic brings many of the same financial benefits. For example, Indiana University analysts found that a remote worker who relocates to Indiana and earns $100,000 a year contributes as much as $83,808 to the local economy, based on direct consumer spending and on the business spending it generates downstream. Analysts also found the very presence of new remote workers created additional jobs in their communities—an all-around win.  

“To be honest, I think we’re going to start seeing communities really start competing, not just on the dollar amounts but also on the ease of use and the quality of the welcome wagon when they arrive,” says Hock. “I’m excited to see what’s happening two years from now, after that competition has time to incubate.”

The post ‘We Moved Here for $10K’: How Cash Incentive Programs Are Changing the Rules on Where Americans Live appeared first on Real Estate News & Insights | realtor.com®.

Second Homes Are Fueling a Rebirth in the Poconos

Emily Assiran for The Wall Street Journal

“My kids are fourth-generation going to Pocono Pines,” said Kristen Pfister, who closed on her Pocono Pines, Pa., home this past June. “So this has been on my mind and in my heart for probably at least five years.”

Mrs. Pfister, 48, a stay-at-home mom, and her husband John Pfister, 49, who is self-employed, purchased their four-bedroom, four-bathroom, 4,000-square-foot home on just over an acre for $925,000. The 2006-era home, located within the private community of Timber Trails, is about a 1 ½-hour drive from their primary home in Westfield, N.J.

Pocono Pines is one of two towns—the other is Pocono Lake, a few miles west—that is experiencing a market surge. Mrs. Pfister and her husband had looked at a few houses before buying and, she said, found themselves in the middle of a transforming market. “I keep teasing my husband,” she said. “If we had bought that house, we would have made X amount of profit.”

Kristen and John Pfister’s Pocono Pines home boasts a stone and shingle façade.

The Poconos, which include Pocono Pines, are a collection of towns in eastern Pennsylvania’s Pocono Mountains that gained midcentury travel notoriety for their kitschy, adults-only and all-inclusive resorts. According to the Pocono Mountains Visitors Bureau, the heart-shaped Jacuzzi was introduced at Caesar’s Cove Haven, a resort in Lakeville, Pa., in 1963, encouraging honeymooners to book romantic retreats.

Bordered at the north and east by the Delaware River, New York and New Jersey, the area had eight to 10 resorts at its peak. Despite an economic downturn in the 1990s and 2000s, due to competition from Caribbean destinations and cruise lines, the region is again peaking.

The Pocono Mountains Visitors Bureau says there are about 10 resorts scattered throughout the region, including Kalahari Resorts Poconos, Camelback Resort and Great Wolf Lodge.

The housing market is also seeing a renewal. A suburban surge in places such as the Hudson Valley, the Hamptons and Connecticut (and an attendant surge in prices) has pushed New Yorkers, Pennsylvanians and New Jerseyans searching for vacation properties toward this region. For a sliver of the price, homeowners can find rural beauty, rolling hills and lakes. But a real-estate frenzy in the area has diminished housing inventory.

“It’s almost like it’s being reborn,” said Mrs. Pfister, whose grandparents bought in Pocono Pines in 1955 and whose parents bought in Pocono Pines in 1976. “People loved going to the Poconos because it was a relative short drive, the homes were affordable,” she said.

Buyers are also drawn to these communities because of their amenities, said Jane Young, Century 21 Select Group real-estate agent in Pocono Pines. Homeowners associations within Pocono Pines, such as Timber Trails and Lake Naomi, provide private pools, dining facilities, fitness centers, member beaches, golf courses, children’s programs, tennis clinics and other amenities.

The Pfisters’ living room has a floor-to-ceiling fireplace.

Emily Assiran for The Wall Street Journal

According to Realtor.com data, 83 homes sold in Pocono Pines—population roughly 1,000—between May and September 2021, up 13.6% year-over-year. The average price per square foot is $240, an increase of 24% from November 2020, and the average list price, $615,000, increased by 48.6% from 2020.

Pocono Lake is slightly more competitive, though less tony. Between May and September 2021, 214 homes sold there, up 14% from the same period a year earlier. The average price per square foot is $174, an increase of 14.5% from November 2020. As of November, the average list price in Pocono Lake was $315,000, compared with $167,000 in 2019—up 57% from 2020. The most expensive sale during the May to September period was $920,000.

Compare these figures with Mount Pocono, 7 miles to the east of Pocono Lake and with nearly the same population, at just over 3,000. There, 44 homes—the most expensive of which was $404,000—sold during May to September 2021. The average list price in Mount Pocono, at $278,000, is slightly lower than Pocono Lake, though the increase, at 79% year-over-year, points to interest in the Poconos as a region.

The exterior of Terry and Rick Salcedo’s Pocono Pines lake house, which they purchased in May.

Emily Assiran for The Wall Street Journal

A view of Lake Naomi and the bonfire area from the backyard of the Salcedo home.

Emily Assiran for The Wall Street Journal

For some buyers, the interest has always been there, but availability has been a matter of timing. Limited inventory has forced buyers to wait out their dreams. There are currently 36 single-family homes on the market in Pocono Lake and 32 in Pocono Pines, a decrease of 80% and 76%, respectively, from November 2018, according to Realtor.com data.

In May, Terry Salcedo, 60, and her husband, Rick Salcedo, 63, closed on their 2008-era six-bed, six-bath, 4,500-square-foot Pocono Pines home, which sits on 0.81 acre, for $1.799 million. The couple, who own an office solutions company, reside full time in Media, Pa., a little over an hour drive from Pocono Pines.

The Salcedos purchased their first home in the Lake Naomi community in 1996. Twelve years later, they upgraded. “We loved the home,” Mrs. Salcedo said of her second Poconos property. “But it wasn’t on the lake.” Last March, the couple happened upon a rare lakefront property also in Lake Naomi just as they were heading back to Media. They waived inspection, offered the full asking price, and then sold their existing home for $925,000 in one hour.

The Salcedos estimate they have added about $10,000 in landscaping and minor upgrades. And now, amid a molten market, they have found paradise on the lake. “For many years, we were searching for our dream lake house,” Mrs. Salcedo said. She says that last March, they found it. “We looked at each other, smiled, and said, ‘This is it.’”

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