The No. 1 Reason Rental Prices Are Soaring Right Now

Rental Prices Soaring Competition for Housing

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In the early days of the COVID-19 pandemic, the big housing story was how prices were soaring due to the historic shortage of properties for sale. Now this shortfall is spilling over into the rental market.

The reason that rents are rising so quickly is more people are competing for places to live. The rental vacancy rate fell to 5.8%—the lowest it’s been since the mid-1980s, according to a recent report from the Joint Center for Housing Studies of Harvard University. And rents spiked in response, rising 19.3% annually in December in the 50 largest housing markets, according to the most recent Realtor.com® data.

This is hurting lower-income renters the worst as the housing shortage coupled with high prices is making it difficult to find places to live that fit their budgets.

“Rental conditions are unprecedented, perhaps insane, across the country,” says Alexander Hermann, a senior research analyst at Harvard’s Joint Center. “What’s happening in the rental market raises concerns about affordability, particularly for people of color and lower-income households.”

Why is there a rental shortage?

There were 44 million renter households in the third quarter of 2021, an increase of about 870,000 since the first quarter of 2020 before the pandemic took off in America.

There isn’t just one simple explanation for the steep rise of renters.

At the start of the pandemic, lots of folks lost their jobs and incomes and moved in with their families. Now that the economy is stronger and the job market rebounded, many are venturing back out on their own—which means they need new places to live. There are also couples who split up, who now need two residences, as well as a larger population in need of housing following years of underbuilding new rental housing.

Many renters, including those with the lowest incomes, stayed put during the pandemic thanks to eviction moratoriums. Even as many of those protections expired, there was no eviction wave as some real estate experts predicted. This kept the market tight.

Even those who can afford to buy a home may prefer to remain renters in the current market. Over the past decade, the percentage of renters earning at least $75,000 shot up 48%, according to the Harvard report. These households now make up just over a quarter of all renters.

Some prefer the higher-end amenities in some of the new rental buildings, such as co-working spaces, rooftop gardens, and pools. Others simply prefer to live in urban downtowns or other desirable areas where there are few homes for sale under $1 million—such as New York City and San Francisco.

These renters are “also occupying units that are more affordable to moderate-income and lower-income households,” says Hermann. “Over time, it’s going to drive up rents even at the low end.”

There are also those who are enticed by the single-family rental market. This allows them to live in a more spacious home with a backyard, often in more suburban areas, without having to worry about coming up with a down payment and closing costs.

Many renters would be homeowners if they could win a bidding war

Another reason for the surge in demand for rentals is that many would-be homeowners were thwarted by fast-rising prices and a lack of homes for sale. As rents have risen, it’s become harder for renters to save up for a down payment and closing costs. So instead they remained tenants.

They’re also competing with big investors, some of which can make attractive all-cash offers.

More businesses became landlords in 2021 instead of mom and pop investors who own a property or two. The percentage of larger investors, such as hedge and pension funds and large financial companies, purchasing rental properties reached its highest level in two decades, according to the report. About three-quarters of those sales were for single-family homes.

More big landlords have been getting into the rental game since the turn of the century. From 2001 to 2018, the percentage of large landlords rose 8 percentage points, to make up 26% of all rental owners, according to the report.

“People who were able to purchase homes even a few years ago are priced out of homebuying and are staying in the rental market longer,” says Hermann.

Most renters kept up their payments during the pandemic—despite the eviction moratorium

Despite the eviction moratorium, put in place in the early days of the pandemic when unemployment was soaring, most tenants kept paying their landlords. Only 15% were behind in the third quarter of 2021, according to the Harvard report. (The federal moratorium was instituted in March 2020 and ended in August 2021, although many cities and states have their own eviction bans with varying expiration dates.)

Lower-income tenants, who were hit disproportionately hard by the job losses, were more likely to still owe their landlords. About 23% of households earning less than $25,000 a year owed missed payments. Meanwhile, only 5% of households making more than $75,000 were behind in rent.

Black, Hispanic, and Asian renters were more likely to struggle to make rent. Almost a quarter of Black tenants, 19% of Hispanic tenants, and 18% of Asian tenants owed their landlords money in the third quarter of last year. That’s compared with just 9% of white renters who were in the same predicament.

Some tenants received federal rental assistance, despite state and local governments running into problems distributing the money to those who needed it. Stimulus checks and other federal assistance helped tenants hang on. The lack of workers resulting in hiring bonuses and big pay increases has also helped folks to remain in their homes.

Despite the pain wrought by the pandemic, eviction filings were 40% lower than they were historically, according to the Eviction Lab at Princeton University. However, the nation is still 6.8 million affordable rental units short of what’s needed.

“It’s a combination of the federal government doing its job … and some landlord flexibility that has allowed people to stay in their homes,” says Hermann.

The post The No. 1 Reason Rental Prices Are Soaring Right Now appeared first on Real Estate News & Insights | realtor.com®.

Duplex Devoted to Kansas City Chiefs Is the Week’s Most Popular Home

Most popular homes

Realtor.com

Just in time for the NFL playoffs, a wild duplex decked out in honor of the Kansas City Chiefs captured the title of this week’s most popular home on Realtor.com®.

Outfitted in red and gold and complete with Chiefs-themed flooring, this dwelling, made for a devoted fan, blitzed our leaderboard. It’s on the market for $275,000, and members of Chiefs Nation couldn’t help but click on the listing and share it with fellow pigskin aficionados.

You also clicked on several other homes notable for their sheer wackiness, including a cabin in the middle of the Ozarks painted inside and out in varying shades of purple, and a full-on Old West replica ranch in Colorado listed for $4.7 million. Even the grim reaper makes an appearance—sans his trademark scythe—thanks to a former funeral home for sale in New York.

But if you’d rather shoot for the stars, there’s always the most expensive home in the country.

Curious folks clicked like crazy on the Bel-Air, CA, megamansion dubbed “The One,” priced at a gasp-inducing $295 million.

To see all 10 of the week’s most popular homes, simply scroll on down.

10. Mc 5029, Yellville, AR

Price: $175,000
Why it’s here: It’s easy—this is a weird purple house on 20 acres in the middle of nowhere. A buyer must love lilac—or bring plenty of paint.

The listing highlights all the privacy and seclusion the place offers and suggests that the two-bedroom residence would make a good hunting camp, family vacation spot, or writer’s retreat. Surrounding the purple paradise are a private well, seasonal stream, and views of the Ozarks.

Yellville, AR
Yellville, AR

Realtor.com


9. 19741 Mahon St, Southfield, MI

Price: $139,900
Why it’s here: That faint social media squeal you heard was the collective reaction of midcentury modern fans upon seeing this bargain in need of a rescue.

It’s an incredible custom four-bedroom ranch from 1957, just waiting for a restoration-minded buyer to turn it into a showstopper. The home needs a ton of work, but it still has its glorious windows, woodwork, high ceilings, and finishes.

Southfield, MI
Southfield, MI

Realtor.com


8. 65 Ocean House Rd, Cape Elizabeth, ME

Price: $395,000
Why it’s here: Curb appeal in abundance. Built in 1942, this home also comes with modern updates like a plug for an electric vehicle and an updated kitchen.

With three bedrooms and 1,104 square feet, the two-story home with a basement doesn’t take up much of the three-quarter acre lot.

That leaves plenty of room for a garden and a deck, with dry storage underneath for bikes, kayaks, and lawn gear.

Cape Elizabeth, ME
Cape Elizabeth, ME

Realtor.com


7. 145 Carbondale Rd, Waverly, PA

Price: $799,000
Why it’s here: Bargain mansions always entice buyers. Known as Waverly, this formal, 3-acre estate features an ornate mansion, built in 1927.

With its 15,000 square feet of living space, the current price means that this place is only going for a paltry $53 per square foot. Originally built by the DuPont family, the eight-bedroom home is said to have been visited over the decades by world-famous names. Outside, the grounds are filled with lawns, a fountain, and a pool.

Waverly, PA
Waverly, PA

Realtor.com


6. 36710 County Road Cc 36, Saguache, CO

Price: $4,700,000
Why it’s here: This 320-acre property features a full replica of an old-timey Western frontier town, complete with saloon, restaurant, general store, and chapel.

More modern attractions on the property include minigolf, a shooting range, and an outdoor performance stage for live acts.

Bordered by protected land, the ranch has two ponds, two wells, two creeks, and a three-bedroom lodge. There are also equestrian facilities and an opportunity to disappear into the past.

Saguache, CO
Saguache, CO

Realtor.com


5. 555 E. Stanford St, Bartow, FL

Price: $499,400
Why it’s here: Featured in the 1991 film “My Girl,” this eight-bedroom Victorian, built in 1906, has returned to the market with a reduced asking price. It was offered last summer for $675,000, but the price to acquire this slice of cinema history has been slashed by 26%.

Listing details suggest the large residence would make a good short-term rental. Outside, the three-quarter-acre lot includes a pool, gazebo, and mature landscaping.

Bartow, FL
Bartow, FL

Realtor.com


4. 2009 Victoria HI, Rochester, MI

Price: $2,299,000
Why it’s here: It’s medieval times all the time in this castle built in 1990.

It’s outfitted for knights, damsels, and dragons, and it’ll take a buyer with a big budget to snag this five-bedroom stone fortress. It sits on 6 acres secured with an iron fence and two gate towers.

Taller than a four-story building, the castle took six years to build and is surrounded by a moat with a drawbridge. Inside, the home has a Tudor-style pub, secret rooms, hidden doors, and an elevator.

Rochester, MI
Rochester, MI

Realtor.com


3. 356 Portage Rd, Niagara Falls, NY

Price: $274,900
Why it’s here: Based on the listing photos, this three-bedroom home appears to have been used most recently as a funeral home—although the listing details make no mention of any morbid backstory.

The brick Victorian also offers a fully finished basement, as well as a rec room with a fireplace. There’s also a sizable blacktop parking lot, but no sign of a hearse in the deal.

Niagara Falls, NY
Niagara Falls, NY

Realtor.com


2. 944 Airole Way, Los Angeles, CA

Price: $295,000,000
Why it’s here: It’s the most expensive listing in the country. Known as “The One,” this Bel-Air mansion is supposed to head to the auction block next month to determine its true value.

The 105,000-square-foot mansion took a decade to build and is still not quite yet done. Amenities include indoor and outdoor pools, a tennis court, bowling alley and a nightclub.

The price tag also comes with 3.83 acres with spectacular views, garage parking for 50 cars, and all the furnishings.

Los Angeles, CA
Los Angeles, CA

Realtor.com


1. 2802/2804 N. Highview, Joplin, MO

Price: $275,000
Why it’s here: NFL fandom extends to the realm of real estate. This Missouri duplex is fully decked out in honor of the Kansas City Chiefs.

There’s the logo in the driveway, a custom, tiled deck, and Chiefs flooring throughout. It all adds up to a fantasy dwelling for a die-hard football fan.

It’s also a solid real estate investment. According to the listing details, the two-unit property is already fully rented.

Joplin, MO
Joplin, MO

Realtor.com

The post Duplex Devoted to Kansas City Chiefs Is the Week’s Most Popular Home appeared first on Real Estate News & Insights | realtor.com®.

Biden’s First Year: Has the President Succeeded—or Failed—in Fixing the Housing Market?

Housing Market President Biden First Year

Realtor.com / Getty Images

When Joe Biden took office, the housing market was top of mind as home prices hit mind-boggling highs due to the dearth of properties for sale. During the campaign, he ran on numerous initiatives that he said would help out homebuyers and increase the amount of available affordable housing.

One year later, with the COVID-19 pandemic continuing to rage and inflation soaring, has the president made good on his heady promises?

So far, it’s a mixed bag.

Most of Biden’s sweeping housing policies and campaign promises are tied up in his Build Back Better bill, which is struggling to make it through Congress. Home prices and mortgage rates have risen, rental prices are soaring, and the number of homes for sale continues to drop precipitously. However, he has made progress in fighting housing discrimination against people of color and the LGBTQ community and expanding credit to prospective, lower-income buyers.

“Housing has been more toward the top of his policy agenda than previous presidents,” says Mark Zandi, chief economist of Moody’s Analytics. “But at this time, his accomplishments are more administrative than legislative. The administration clearly wants to provide more funds to increase the supply of housing but has not been able to get that across the legislative finish line.”

The Build Back Better plan, which included money to build, rehabilitate, and improve more than 1 million affordable homes, provide financial assistance for struggling renters, and offer down payment assistance to homebuyers, stalled in December when Sen. Joe Manchin, a Democrat who represents West Virginia, refused to support it. The $1.75 trillion plan made it through the House but needs every Democrats’ vote to pass the Senate.

The president is hopeful that chunks of the Build Back Better plan can still become law, he told reporters on Wednesday.

Even if the plan passes and more money is allocated for affordable home construction, some real estate experts aren’t optimistic about its chances of real-world success.

“The federal government’s history of trying to add [housing] supply is peppered with failure,” says Ed Pinto, director of the housing center at the American Enterprise Institute, a right-leaning think tank. “The attempts the government has made in the past to add supply have been unsuccessful and created new problems.”

Without that additional housing, prices continue to rise. Median list prices were up nearly 10% annually, to reach $375,000 in December, according to the most recent Realtor.com® data. Rental prices rose even higher, shooting up 19.3%, in the nation’s 50 largest metropolitan areas in December compared with a year earlier. (Metros include the main city as well as surrounding towns, suburbs, and smaller urban areas.)

The number of properties for sale dropped almost 27% in December compared with a year ago, according to Realtor.com data.

Mortgage interest rates jumped nearly 80 basis points over the past year, to reach 3.56% for a 30-year fixed-rate loan in the week ending Jan. 20, 2022, according to Freddie Mac. Rates are typically affected more by U.S. Federal Reserve policy than the president’s administration.

Many of Biden’s biggest promises haven’t been fulfilled, yet

On the campaign trail, Biden promised first-time homebuyers a tax credit of up to $15,000 to help offset high prices in the housing market. This became the First-Time Homebuyer Act introduced in Congress in April, which would provide lower- and middle-income homebuyers a credit of up to 10% of the purchase price of the home, capped at $15,000. If they don’t stay in their home for five years, they would have to repay some of that money.

Lawmakers also introduced the Downpayment Toward Equity Act of 2021, which would provide lower-income buyers $25,000 to use toward the purchase of their first home. Buyers would have to prove they were first-generation homebuyers, their families had lost a home to foreclosure, or they had been in foster care, among other requirements to qualify for the program.

Neither bill has made it through Congress yet.

However, the credits designed to help homebuyers may actually wind up hurting them. It could entice even more folks into the market at a time when the supply of housing is around historic lows and there isn’t much coming up for sale.

“If you do this, you will increase demand, which will increase prices,” says Pinto.

Another idea touted by the president during his campaign was creating a public credit agency that could help more buyers qualify for mortgages. Instead of relying on traditional ways of evaluating credit, the agency would also look at on-time rental, utility, and cellphone bill payments in addition to monthly car and credit card payments.

While the agency was discussed during a congressional hearing in June, it has yet to come to fruition. However, Fannie Mae now includes rental payments in its underwriting so that lenders can look at that when deciding whether to give mortgages to applicants.

“That is an effort to promote homeownership for groups that have very low homeownership rates, such as families of color and lower-income households,” says Moody’s Zandi. “Homeownership is the principal pathway of building wealth.”

What Biden has accomplished in housing in his first year

The president isn’t without some important housing wins.

“From a fair housing civil rights standpoint, he has left the block like a sprinter, reinstituting important civil rights protections,” says Morgan Williams, general counsel at the National Fair Housing Alliance. “We’re really pleased with the aggressive steps that this administration has taken to reinstitute the fair housing protections that are critical in the housing market.”

At the start of his presidency, Biden banned most housing discrimination against members of the lesbian, gay, bisexual, transgender, and queer community at the federal level. This made it illegal for landlords, real estate agents, mortgage lenders, and even home sellers to refuse housing or services to the LGBTQ community.

This was significant as previously only 23 states, Washington, DC, and a smattering of cities had fair housing protections based on sexual orientation.

Only 21 states had banned discrimination against those who identified as transgender. However, Biden effectively ensured sexual orientation and gender identity are now covered under fair housing protections.

It “sends a clear message to the housing markets that this discrimination won’t be tolerated,” says Williams.

Biden also put the teeth back into a fair housing initiative rule aimed at encouraging communities to allow more affordable housing, such as smaller single-family homes as well as apartment and condo construction, to go up.

The Affirmatively Furthering Fair Housing regulation required places receiving federal housing money to assess and then address local housing discrimination. Many wealthier towns and suburbs had fought putting up new housing that would alleviate some of this discrimination as they believed it could lead to lower property values. The previous administration under Donald Trump had gutted the regulation.

Biden also created a task force to look at discrimination in the home appraisal process, which many homeowners and real estate experts claim is biased.

In addition, the president’s extension of mortgage forbearance followed by having lenders provide struggling homeowners with options to help them hold on to their homes when they began making payments again also likely helped to prevent more foreclosures, says Alex Thomas, a senior research analyst at John Burns Real Estate Consulting. However, as those homes never went up for sale, it kept the housing supply lower and helped keep prices high.

So has Biden built the housing market back better?

“It’s still very much in progress,” says Moody’s Zandi. “The big game-changing housing policy moves are still tied up in the legislative process.”

The post Biden’s First Year: Has the President Succeeded—or Failed—in Fixing the Housing Market? appeared first on Real Estate News & Insights | realtor.com®.

California Is Back! Pricier Cities Were Among the Hottest Markets in December 2021

Hottest Markets

Getty Images / Realtor.com

Pricier real estate markets are hot again with homebuyers—with one big caveat.

Three California housing markets cracked the top 10 hottest housing markets of December, according to a recent Realtor.com® report. Half of the nation’s 20 hottest markets had prices higher than the national median of $375,000.

However, most of these markets, with the exception of Santa Maria, CA, where the average was listed for roughly $1.4 million, were cheaper alternatives to larger, more expensive cities. With fewer white-collar professionals back in their offices full time, many are looking for reasonably priced homes that are farther out, but still within commuting distance of their offices.

“Americans, by and large, are focusing on affordability. When they’re considering buying a home, affordability is their No. 1 concern,” says George Ratiu, manager of economic research at Realtor.com. “A lot of the markets above the median list price tend to be located within commuting distance of larger, much more expensive metropolitan areas.”

The Realtor.com economic research team came up with its monthly ranking of the hottest U.S. markets for real estate by tracking the metropolitan areas where homes are selling the quickest and where the most potential buyers are clicking on property listings. The report looked at metropolitan areas, which include the main city and surrounding towns, suburbs, and smaller urban areas.

Homes that made the list typically receive 1.3 to 1.5 times the number of views per listing compared with the national rate. Properties in these markets also spent about 15 fewer days on the market.

The markets on the list also tended to have stronger job markets.

“People clearly don’t just want an inexpensive house,” says Ratiu. “They want a vibrant community with a vibrant economy along with affordable housing.

The hottest market was once again Manchester, NH, which snagged the top spot on the list eight times in 2021. Manchester, which is a city in its own right of more than 115,000 residents, is just an hour northwest of Boston. However, homes in the New Hampshire metro area were about $150,000 less than they were in the Boston metro, where the median list price was just under $700,000.

“Manchester has a trifecta of factors, which has kept it at the top,” says Ratiu. “It is very close to Boston, a major city with lots of jobs. It is located in a state with no income or sales tax at a time of high inflation. And Manchester offers what a lot of Americans are looking for in a pandemic, which is access to the outdoors and recreational activities.”

Just because homes are a bit cheaper in Manchester doesn’t mean that buyers will have an easier time winning bidding wars there: Competition is stiff. Listings racked up about 3.5 times as many unique views as they did in the rest of the country.

Homes in the metro also sold at lightning speed, selling 10 days faster than in the rest of the country at about 38 days. This was 12 days quicker than they did the same time last year. List prices also rose sharply, jumping 12.2% compared with December 2020.

“People are taking advantage of the current [remote] employment landscape and looking for their dream homes farther out,” says Ratiu.

The hot list

Metro Rank Rank Change YoY Median Listing Price
Manchester, NH 1 +11 $447,400
Burlington, NC 2 +2 $295,000
Rochester, NY  3 +20 $199,000
Fort Wayne, IN 4 -1 $232,450
Oxnard, CA 5 +10 $914,000
Vallejo, CA 6 -5 $585,000
Santa Maria, CA 7 +59 $1,397,000
Raleigh, NC 8 +67 $419,900
La Crosse, WI 9 +43 $282,500
North Port, FL 10 +193 $507,000
Topeka, KS 11 -1 $172,200
Worcester, MA 12 +21 $387,450
Colorado Springs, CO 13 -11 $492,531
Springfield, MA 14 +48 $312,500
Hickory, NC 15 +26 $275,000
Waco, TX 16 +45 $319,900
Yuma, AZ 17 +9 $283,500
Rapid City, SD 18 -13 $379,250
Durham, NC 19 +77 $465,991
Columbus, OH 20 +2 $292,200

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Where Billionaires Kick Back: An Exclusive Sneak Peek at ‘Selling the Hamptons’ With Bianca D’Alessio

selling the hamptons

Discovery+

Getting an eyeful inside luxurious homes with multimillion-dollar price tags is real estate reality TV at its best, so it’s no surprise to see the Hamptons, NY, get its slice of the spotlight on a new show, “Selling the Hamptons.”

The show (premiering Thursday on Discovery+) follows six real estate agents at Nest Seekers International as they buy and sell properties within this ultra-wealthy enclave at the end of Long Island.

Despite these homes’ high prices, Hamptons real estate saw a huge surge in interest at the onset of the coronavirus pandemic two years ago, as well-heeled New Yorkers fled the city, and the market is still going strong today.

Curious to hear more about what it’s like to wheel and deal with these posh properties and their A-list billionaire owners, we had a chat with one of the show’s stars, the broker Bianca D’Alessio.

Here’s a sneak peek inside the megamansions of the Hamptons’ rich and famous, plus some advice from D’Alessio that’ll benefit all homebuyers and sellers, no matter what the size of their budgets.

Selling the Hamptons Cast
The cast of “Selling the Hamptons”

Discovery+

We’re peeking into the most luxurious and exclusive real estate market in the world, during one of the most competitive seasons we’ve ever seen. So we’re going to see some of the most gorgeous properties, a little bit of drama, and a whole lot of fun.

How would you describe the Hamptons real estate market to someone who’s not familiar with the area?

The Hamptons is a billionaire’s playground. It’s where all of the richest of the rich go to party, from Memorial Day to Labor Day, and it has some of the most grand homes you’ll see in the entire world. So the properties, the amenities, the villages, and the hamlets—everything is beautiful and completely over the top, in the most fabulous way.

What wow-worthy amenities have you seen?

I think probably the coolest would be the million-dollar screen that appears from behind the pool at one of the homes that we feature on the show. It’s a $35 million listing with a million-dollar TV in the backyard. It’s unreal.

If that’s in their backyard, what’s it like inside the house?

There’s a TV that falls from the ceiling, and then we have an indoor pool and basketball courts, so the amenities are truly endless.

ISelling the Hamptons

Bianca D’Alessio on “Selling the Hamptons”

What about the clients? The Hamptons is a known celebrity hotspot, will any appear on the show?

There will be a few famous faces that you will see, but a lot of really impressive people—tech billionaires, the biggest New York City developers, and a few celebrity clients. The houses are big, the personalities are definitely much bigger! We will definitely have some drama with the cast and with some clients, because it’s a very demanding job, but it’s all about managing and communicating, and sometimes just laughing about it.

How is the Hamptons real estate market different from New York City?

New York City is a very different real estate market, because you’re selling buildings and you’re selling apartments, and the competition is crazy.

The New York City hustle is real, so bringing that out to the Hamptons during this time was very, very exciting, as well as bringing the buyers with us. And that’s why I entered the Hamptons market to begin with.

Selling the Hamptons
Selling luxury homes requires more work than you might think.

Discovery+

The Hamptons has traditionally been a place for second homes and luxury vacations. Did the pandemic change that trend?

Absolutely. Most of my clients end up almost splitting their time between the Hamptons and New York City, so [they’re] spending three to four days a week all year round in the Hamptons and then coming to the city for the weekends or to pop in for a day or two at the office. There’s definitely been a huge shift, which is why the market has continued to stay so incredibly strong, well past March 2020.

Reality shows have a reputation for highlighting how the cast is competitive, even cutthroat. Is that what it’s like on your show?

When you have that much money on the line, it’s bound to get very competitive. I try my hardest to be as collaborative as I can because I do truly look at everyone else that I work with as allies, and if we work together, [rising] tides raise all ships.

But at the end of the day, we all want to bring home that million-dollar commission—sometimes even $2 million- or $3 million-dollar commission—so sometimes it does get a little dirty. But there’s always a winner in the end.

What was your reaction when producers came to you about starring on this show?

Truthfully, in the beginning, I was a little taken back. To be honest, I was terrified.

I was scared of putting my entire life and business and reputation on the line, but at the same time, I knew my motto has always been to say yes to every opportunity that’s ever put in front of you and figure it out later.

I feel like that’s what I did here, and it was an incredible experience.

What’s your best real estate advice for those who don’t have a million-dollar budget?

Start small. I think that’s important with everything. Learn the market that you’re in, or learn a different market. If you live in New York City but you can’t afford to be in New York City, or you live in the Hamptons and can’t afford to trade up, learn a different market and take baby steps.

It’s all about surrounding yourself with the right people, having the right conversations, reading and studying. There’s a ton of incredible investment opportunities across the United States right now in markets that are continuing to grow and evolve, and it just sometimes takes you stepping a little bit outside of your comfort zone.

But there’s a big return that could be on the other side of it, because real estate is one of the most exciting industries in the world.

Got any rules you think all homebuyers and sellers should follow?

My No. 1 real estate rule is to always surround yourself with the right team. That’s more than just the broker.

It’s your attorney, it’s your lender, it’s everyone involved in the transaction. Because there will be so many hiccups across the transaction. Surrounding yourself with a team to help you get to the finish line is absolutely crucial to get to the end goal.

The post Where Billionaires Kick Back: An Exclusive Sneak Peek at ‘Selling the Hamptons’ With Bianca D’Alessio appeared first on Real Estate News & Insights | realtor.com®.

Donald Trump Plans To Build New Luxury Housing at His Miami Resort. Will It Revive His Real Estate Brand?

Trump National Doral Golf Resort Luxury Housing

Getty Images

Donald Trump plans to expand his real estate empire—a move that could fill the coffers of the Trump Organization just as millions of dollars in loans are about to come due.

The nation’s 45th president recently announced he will be applying to add 2,300 units of luxury housing to the Trump National Doral Miami, a golf resort boasting four golf courses and a luxury hotel. That will be in addition to a new retail and commercial space.

Despite the nation’s deeply polarized feelings surrounding the controversial former president, the plan to build luxury housing at the resort is expected to be an “overwhelming success,” says the luxury real estate broker Dolly Lenz. She is based in New York but does deals around the country.

“Most people have a very positive image of the [Trump] brand in Florida,” says Lenz. “We’re not talking about New York or Los Angeles.”

The project comes during a severe shortage of homes for sale, just as more people are looking for homes in Florida.

With the rise of remote work, many folks want to be in a warmer climate with a lower cost of living and no income and estate taxes, which the Sunshine State can offer. However, there aren’t enough homes to go around.

“Every developer is in a foot race to get new homes to market to meet the demand,” says Jonathan Miller, a national real estate appraiser. “Beginning in the pandemic era, Florida has experienced historically strong home sales, especially in the luxury market.”

Trump’s plans may come at a good time for his bottom line. The resort’s revenue fell sharply at the start of the pandemic, according to Bloomberg, which reports that millions in bank loans personally guaranteed by the former president will soon come due.

The real-estate-mogul-turned-politician purchased the club in 2012, when it was in bankruptcy. It had been a big revenue generator for the Trump Organization, bringing in more than $70 million a year, until the early days of the pandemic resulted in closures, furloughs, and a drop-off in travel. According to Bloomberg, in 2020, revenue fell to $50 million.

A Realtor.com analysis of sales of U.S. properties with the Trump brand dating from 2016 through 2020 showed that while the number of sales of his residential units had risen sharply, their prices had dropped, except in Florida.

Adding homes to the Doral, in an area where the former president enjoys stronger support than in solidly blue states, could offset some of those losses.

“They’re going to take off, because there’s nothing to buy,” says Lenz, the luxury real estate broker. “What everyone wants is a resort. It’s got golf, tennis, pools, restaurants. And [the Doral is] all contained in a great location.”

The proximity to celebrity golfers may also enhance the project’s appeal. Trump claims to have spent millions on the Blue Monster golf course at the resort.

However, one prominent real estate expert who prefers to remain anonymous points out that luxury real estate is now skewing toward younger buyers, many of whom are not as interested in golf as were previous generations. That would seem to reduce the appeal of the project for a large segment of the buyer pool.

The Trump Organization has several other residential properties in the Miami area.

About 25 miles north of the Doral lies the Trump Grande in North Miami Beach. The three-tower, oceanfront complex spans 11 acres and includes a condominium hotel, the Trump International Sonesta Beach Resort and two condo buildings, the Trump Palace and Trump Royale.

The nearby Trump Towers, Sunny Isles Beach, offers 813 luxury condo units spread across three 45-story towers on the Atlantic Ocean. Just a few miles north is the 41-story Trump Hollywood in Hollywood Beach, FL, a glass, beachfront tower with about 200 residences.

The post Donald Trump Plans To Build New Luxury Housing at His Miami Resort. Will It Revive His Real Estate Brand? appeared first on Real Estate News & Insights | realtor.com®.

Household Repair Professionals Are Hot and In Demand. Here’s How To Win Their Heart (or at Least Get on Their Schedule).

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It’s virtually impossible at the moment to hire anyone to do any repair, maintenance or construction work on your home, no matter how badly you need it. Right now, repair people are like the hottest kids in high school. Remember them? They were attractive. They had godlike skills at pretty much everything. The whole school envied them. They were utterly unattainable. And you, the pimply-faced freshman, stood by and looked on with a heart full of yearning as they strutted confidently past you toward their lockers.

Back then, you knew better than to just call up one of these high school hotties and say “I need you now.” And you shouldn’t do it with your repair or maintenance person either because you’ll get the same result. The good news is that the techniques that actually worked to attract the attention of the Prom King or Queen also work when attempting to secure the services of your local professional repair person. Let’s break it down:

Enter the Friend Zone: Where does your required service provider like to toss back a couple of brews? Maybe, one afternoon, you just happen to be there when they show up. You start up a casual conversation. Buy them a beverage. Or join their pickleball team, volunteer fire department, or book club. DO NOT mention that you require their services. Just play it cool, for heaven sakes. Did you learn nothing in 10th grade? Only on the third or fourth seemingly casual encounter, when you both know each other’s first names and those of your spouses, pets and children, should you mention that your washing machine hasn’t worked in three weeks. Now that you’re pals, you’ll be top of mind when an opening comes up in, like, a month.

Commit bribery: Are you in a position to provide anything of value to the repair person in question that would get you on their radar? Does their child attend the same school as your child? Think playdates, but cool ones like a trip to Disneyland, the nearby zip-line course, an Ariana Grande concert, or a very expensive dinner and a movie. But not if the children hate each other, obvs. That would be counterproductive. Find out what the repair person’s spouse does for work and patronize the living heck out of the business. Do they have a favorite charity? Be a super-donor! Word will get back. You’ll come off as a thoughtful, generous, selfless person because you give and give and don’t ask for anything in return…yet.

Conscript an intermediary: Remember when you asked your high school crush’s best friend to deliver a note to them that simply said “Do you like me? Yes or No” and all the crush had to do was circle one and return the note. Then it was game on! (Or, sadly, off.) This strategy works with repair people as well. Ask a friend who is already using this person’s services to make an introduction, but not an introduction like “Hey, my friend Jim needs you to fix his toilet.” Make it less The Fonz and more Cyrano: “My dear, kind friend Jim has been having such terrible luck finding a good plumber and he’s been through all the usual suspects. He is just not satisfied. He’s very discerning. I’ve told him all about you and how fabulous you are and he said you sound like his dream come true. Are you interested?”

Shower them with cash: Once you’ve attracted their attention, promise to give your repair person what they really want: Cash On Delivery. You might need to take out a small home-equity loan to do this, but it will be worth it, as you will mark yourself as “that customer who pays cash.” Just like footing the bill for the first date, you will present yourself as a discerning, generous individual who understands what it means to take care of that important someone.

Make them feel special: After the successful completion of that first repair job, leave a glowing review on their Facebook page, website and their Angi listing. Offer to be a reference. Brag about how great they are to all your friends, who will be super jealous (bonus!). Call them two days after your appointment and tell them that you can’t stop thinking about them or the terrific job they did on your drain. Leave a long, warm, squishy trail of good will after that first job and you will be guaranteed a second repair appointment when the need arises.

Don’t be afraid to break up: Sometimes, that perfect Prom King or Queen ends up being more like a Joker. If, after all the hard wooing, you realize that your repair person is awful at their job, it’s better to end things quickly than to let it drag on until you’re both miserable. But one final tip: Don’t break up until you’ve found your next repair person. “Taking some time alone” is the exact opposite of what you need when it comes to home repair.

The post Household Repair Professionals Are Hot and In Demand. Here’s How To Win Their Heart (or at Least Get on Their Schedule). appeared first on Real Estate News & Insights | realtor.com®.

How Much Will Today’s Median Home Price—$375K—Really Get You Across the U.S.?

Median Home Price

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Homebuyers these days are one stressed-out group, and they have plenty of questions.

They want to know how high mortgage rates will rise. How to win insane bidding wars. Whether to join the suburban rush or the big-city retreat. Whether the open kitchen, modern farmhouse, and “cottagecore” designs are still a thing. But amid all the confusion and consternation, there’s one universal question that most consistently bubbles up from the murk:

Just how much home can I really get for my money?

And more than ever, the answer is this: It all depends on where in the country you’re looking.

Because here’s an eye-opener: The median list price of a home in the United States was $375,000 in December, according to the latest data from Realtor.com®. While that price might sound like an absolute fortune in some parts of the U.S., it won’t get buyers much more than a walk-in closet-sized home in pricey places like California’s Silicon Valley or New York’s Westchester County.

That’s why the Realtor.com data team researched just how much square footage $375,000 will net buyers across America.

“For the nationwide median list price, you can get a small condo in San Jose or a spacious home with four times the bedrooms and almost 10 times the square footage in places like Youngstown, OH,” says Realtor.com Chief Economist Danielle Hale.

The silver lining for cash-strapped buyers seeking larger homes for less money is that, as remote work becomes the norm for many white-collar professionals, folks can expand their search well outside of the most expensive areas and into cheaper parts of the country. Yes, buyers can get a relative mansion for less than $400,000—if they’re willing to relocate.

Perhaps not surprisingly, the places buyers will get the least space for their money were on the coasts with strong economies and high-paying jobs. Money goes much further in smaller cities in the South and Midwest that don’t have as strong economies, where home prices have risen but remain low compared with the rest of the nation.

“The big difference in ‘bang for your buck’ is a reflection of differences in supply and demand for real estate in these areas, as well as local factors like cost of construction and people’s incomes,” Hale says.

To come up with our findings, we looked at how many square feet the median home price would get buyers in the 100 largest metro areas last month. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.) Then, to show the disparity, we narrowed it down to eight places where buyers could get everything ranging from a mansion in the Rust Belt to a cozy studio in the San Francisco Bay Area.

Due to the housing shortage—which worsens in the winter months—finding homes in these price ranges was no easy task due. But we searched high and low for homes that fit the bill.

So where will buyers’ money stretch the most—and the least?

What kind of house homebuyers can get for $375,000 varies greatly depending on where they live.

Tony Frenzel for Realtor.com

1. San Jose, CA

San Jose, CA

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Square footage for $375,000: 458

Located in the heart of Silicon Valley, the San Jose metro area has long owned the title as one of the most expensive real estate markets in the country. And the COVID-19 pandemic hasn’t slowed it down.

High-paying tech jobs at places like Google, Apple, and Facebook (sorry, Meta) mean people who live and work here can afford to pay up. And with limited inventory and a premium on space, bidding wars and offers over asking price are common.

An egregious example: A modest 1,300-square-foot home near Yahoo’s headquarters in Sunnyvale was recently sold for almost $1 million(!) over what it was listed for.

“High-tech companies and workers have flourished since the pandemic, with the affluent becoming hugely more affluent than ever,” says Patrick Carlisle, chief market analyst for the San Francisco Bay Area for Compass.

Needless to say, $375,000 doesn’t get you very far in San Jose. First-time buyers can snag this modest 648-square-foot, one-bedroom condo for a mere $400,000 plus monthly homeowners association fees.

2. Miami, FL

Square footage for $375,000: 1,060

Out-of-staters, companies, and retirees flocking to warmer climates and lower taxes caused prices to skyrocket across the Sunshine State in the past year, including in the already expensive Miami metro area.

The eighth-largest metro area in the country also includes the ultraexpensive West Palm Beach, home to the Trump family and other celebrities. But that’s just part of the reason homes are so expensive. A slew of high-rise, oceanfront luxury condos built in recent years also means $375,000 won’t get buyers as much square footage as they might be seeking.

Have your heart set on a place of your own in the Magic City, but you don’t have a handy trust fund to cash in? You’ll need to spend some time searching and be prepared to give up some space. A 1,000-square-foot, one-bedroom condo with views of Biscayne Bay and boat slip access is currently listed for $375,000.

3. Phoenix, AZ

Phoenix, AZ

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Square footage for $375,000: 1,456

Phoenix’s strong economy and warm weather are just a few reasons why the desert metropolis, popular with retirees and young families, has seen a steady surge in new residents over the years.

Like the rest of the country, a shortage of housing has led to steadily rising prices in the nation’s fifth-largest city. But builders have been buying up land at a quick clip lately, while investors have been pouring in. The latter have been purchasing homes to turn into rentals or flipping them for profit, so there are plenty of move-in-ready abodes on the market.

A recently updated two-bedroom home in Glendale (about 9 miles from downtown Phoenix) is currently listed for $379,900.

4. Spokane, WA

Square footage for $375,000: 1,708

Located about four hours east of Seattle, Spokane offers the outdoorsy Pacific Northwest lifestyle without Seattle’s eye-popping price tags. Transplants and retirees have realized their money goes further in this former railway hub. That’s part of the reason Washington’s second-largest city was named one of the top housing markets to watch in 2022 by the Realtor.com economics team.

The vast majority of properties for sale in the city proper are single-family residences, although there are plenty of vacant lots that enterprising buyers can have their dream homes built on.

A cute, remodeled three-bedroom Craftsman with two main-floor bedrooms (perfect for those looking to age in place) dating to 1907 was recently listed for $375,000. It’s just a shade under 1,600 square feet.

5. Philadelphia, PA

Downtown skyline of Philadelphia, PA

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Square footage for $375,000: 1,942

Philadelphia has seen a steady stream of East Coasters making their way to the comparatively affordable City of Brotherly Love. While the city is filled with historic sites, it also has plenty of artsy neighborhoods for the trendy set. That includes Fishtown, which was highlighted in the fifth season of the hit Netflix series “Queer Eye.”

While buyers coming from expensive cities in the Northeast can get more space for their money, Philadelphia is still a city with limited land available. That means folks are a bit limited in what they can get for $375,000.

“You’re not going to get rolling hills and swimming pools and off-street parking, because most homes here don’t have that,” says Jeanne Whipple, a Realtor and team leader at Philly Home Girls and agent at Elfant Wissahickon. But the city’s amenities and plentiful public transit options more than make up for it.

A newly constructed three-bedroom townhome in South Philadelphia with outdoor space is currently listed for just over the national median.

6. Greenville, SC

Square footage for $375,000: 2,451

This hot market has been luring retirees and first-time homebuyers for the past few years thanks to its affordable housing and low taxes; a lively downtown filled with art studios, breweries, and local eateries; and steady economy with lots of companies moving in and hiring.

A recent construction boom and lots of flippers rehabbing older abodes mean there are many options for those on a budget.

While prices are rising and inventory is tight, the Greenville metro area is more affordable than other parts of the country, especially for those who don’t mind moving farther out from the city. The national median home price can actually snag you some decent space here, including this newly renovated four-bedroom home in nearby Easly.

7. Indianapolis, IN

Indianapolis, IN

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Square footage for $375,000: 2,847

The home of the Indy 500 and the NFL’s Colts is more than just a die-hard sports town. This growing tech hub has also been luring young professionals, who are attracted to high-paying jobs and homes that are significantly more affordable than what they would get on the coasts.

In fact, Indianapolis has the largest share of “affordable mansions” in the country, according to a recent analysis from Realtor.com.

All that’s to say $375,000 can get a pretty sizable home in the Indianapolis area. The inventory is mostly single-family homes, with some condos and townhomes sprinkled in. Buyers can find a newly renovated three-bedroom, 2.5-bath close to downtown for a hair under $380,000. At 2,560 square feet, it offers room to spread out.

8. Youngstown, OH

Square footage for $375,000: 4,540

Home prices in this manufacturing town have spiked since the pandemic as transplants seek more affordable real estate. But compared with other metros, prices remain low in this struggling city, which has a slightly higher unemployment rate than the rest of the country.

Like other Rust Belt cities, Youngstown was hit hard when steel factories began closing decades ago. But General Motors still has a big presence in nearby Lordstown, while area hospitals are also big employers.

Most homebuyers here are looking for homes at or below the $300,000 mark, says Al Cerritelli, a real estate agent with Howard Hanna Real Estate Services in the suburb of Poland.

“That [$375.000] would get you a premium house here for sure,” he says.

Buyers looking for bargains can find deals within Youngstown’s city limits, but for those focusing on space, a nearly 5,000-square-foot mansion with four bedrooms in the suburb of Girard is listed for $375,000 on the nose.

“This is one of the most affordable areas in the country, so the people that come from out of town are just amazed at how much house they can get,” Cerritelli says.

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America’s Housing Market Is In the Grip of an Inflation Storm

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Housing is the largest expense for many Americans. And it’s taking a bigger bite out of people’s wallets, as far as the Consumer Price Index is concerned.

The shelter component of the inflation barometer increased 0.4% between November and December, down slightly from a 0.5% uptick the prior month. Nevertheless, annual growth set records. In particular, the component that measures the equivalent rent that homeowners would pay for their houses rose 3.8% between December 2020 and December 2021, the highest rate since 2007.

The cost of shelter is the biggest component of the overall Consumer Price Index, reflecting the importance of rent and mortgage payments in a household’s budget. For starters, it’s a necessity. Most people can’t avoid having to pay for housing, whether you rent or own.

Renters and buyers face similar headwinds.

Renters and buyers face similar headwinds, for slightly different reasons. For buyers, supply constraints have pushed up prices for housing, exacerbated by rising costs for materials such as lumber. Renters are seeing rents increase as people gradually return to cities.

But even as housing inflation has risen to record levels in terms of the index, the increases seem small by comparison to other barometers of home prices. That’s because the COVID-19 pandemic has complicated our ability to gauge housing inflation even further, especially because the CPI is based on survey data.

“Since activity is just now returning to cities that experienced an exodus at the onset of the pandemic, and existing leases take time to reset every year, the shelter CPI index lags home price movements,” said Katherine Judge, director and senior economist at CIBC Capital Markets. “The shelter index is still playing catch up.”

‘The shelter CPI index lags home price movements.’

Katherine Judge, director and senior economist at CIBC Capital Markets

A leading measure of home prices, the S&P CoreLogic Case-Shiller Home Price Indices, notched a 19.1% annual gain in home prices nationally in October, the most recent month for which data is available. Meanwhile, the most recent national rent report from real-estate website Apartment List showed that the median rent nationwide increased 17.8% over the course of 2021.

This discrepancy between the housing inflation picked up by the CPI and the rising housing prices seen with other indicators is by design, economists say. The housing components of the CPI are “designed to measure the cost of living from month to month,” said Paul Ashworth, chief North America economist at Capital Economics. “So CPI housing shouldn’t fully reflect changes in capital values.”

And that makes sense. For the vast majority of homeowners, the cost of owning a home does not vary month to month or even year to year, because these days most people make use of fixed-rate mortgages. So while taxes may fluctuate some, the cost in terms of the mortgage won’t change after they buy the home unless they refinance.

It’s similar for renters. Most people who rent their homes will only encounter higher prices when it comes time to move or renew their leases — and even then, those who choose the latter option will typically see smaller increases in rent than those who relocate. As such, by nature, measures of consumer spending may downplay the increases in rents and home prices being seen more broadly.

Has housing inflation hit its peak?

Most economists agree that the CPI’s measure of housing costs still has room to rise — even though other housing-cost barometers have already displayed signs of slowing growth.

“The shelter costs gauge in the CPI tends to lag measures of home prices by at least a year, maybe two,” said Stephen Stanley, chief economist at Amherst Pierpont. “So the surge in home prices that began in mid-2020 only began to show up in the CPI just within the last few months.”

But how long the spate of housing inflation will take to reach a peak before normalizing is a matter of debate. In the past, the CPI’s measure of rents for homeowners has typically lagged other measures of market rents by between nine and 12 months, according to a report from CoreLogic released in September.

“My guess is that market rents growth probably hit the top in December, which means that the shelter component can accelerate until August,” said Christophe Barraud, chief economist strategist at Market Securities France SA.

Some analysts, however, believe the inflation peak could come far sooner. Jeffries chief economist Aneta Markowska and money market economist Thomas Simons wrote in a research note Wednesday that the CPI’s measure of rent could hit its peak as soon as February or March.

“The CPI housing components have been undershooting market rents, which have risen much more sharply, and it’s not entirely clear why,” they wrote, adding that because the CPI’s housing barometers “have not even begun to catch up, at this point we probably have to assume that they won’t.”

What does this mean for the Fed?

In light of runaway inflation, the Federal Reserve has signaled that it will take swift action to cool down the economy. Central bankers have indicated they will both increase interest rates and winnow down their bond-buying activities as a result.

Even if housing inflation does hit its peak in the coming months, Americans and the Fed alike can’t expect the situation to correct itself quickly. For starters, the pandemic-era home-buying craze has proven that millennials have entered the housing market — and they are legion.

“They are about 46.1 million strong,” Barraud said, “and make up the most significant demographic patch ever recorded.”

‘The only way to calm the housing market significantly is a supply shock.’

Christophe Barraud, chief economist strategist at Market Securities France SA

Many of these would-be homeowners were delayed in their decision to purchase property because of their large student loan burdens, he said. Meanwhile, the supply of homes for sale remains near record-low levels with little sign of budging.

These millennials buyers are not only pushing home prices higher, but so long as they remain delayed in achieving homeownership they also will continue to prop up rents.

The Fed’s arsenal of tools may not be able to address the resulting housing crunch that should ensure high housing inflation is here to stay.

“Rising long-term interest rates could push mortgage rates higher, and therefore slow housing prices growth, but it won’t be sufficient to reverse the positive trend,” Barraud said. “The only way to calm the housing market significantly is a supply shock given that I don’t see U.S. politicians implementing rent caps.”

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