Many Black Americans Had Their Land Stolen—Now They’re Fighting To Get It Back

Bruce's beach california

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In the early part of the 20th century, Willa and Charles Bruce created an oceanfront oasis for Black families barred from nearby “whites only” beaches. In 1912, they built Bruce’s Beach Lodge, in Manhattan Beach, CA. Just outside of Los Angeles, it had a restaurant and a dance hall.

That didn’t make the Bruces popular with the Ku Klux Klan. After the group and some like-minded townspeople failed to drive them out through a process of systematic harassment—including slashed tires and even arson—the city itself took charge. Manhattan Beach seized the Bruces’ property in 1924 through eminent domain to use as parkland.

The Bruces’ business was razed, and then the land stood vacant for decades. It wasn’t until the 1950s that a park was constructed. City officials feared the Bruce family would sue if the land wasn’t used for what it had ostensibly been seized to create, according to the Los Angles Times.

A photo of Charles and Willa Bruce is attached to a plaque marking Bruce’s Beach on April 19, 2021, in Manhattan Beach, CA.

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Finally, in September—nearly a century after the land was taken from the Bruce family—California Gov. Gavin Newsom signed a groundbreaking bill to allow the valuable property to be given back to the family’s descendants. It was one of the first times, scholars believe, seized land has been returned to a Black family.

It has sparked the beginnings of a movement in other parts of the U.S. to return to Black families property that was taken through intimidation, fraud, or even eminent domain—a process often used to break up or outright destroy communities of color.

“There’s a lack of general knowledge about the reality of efforts to deprive African Americans of becoming property owners in the first place and taking the property away from African Americans who did achieve that status,” says Thomas W. Mitchell, a property law scholar at Texas A&M University. “It’s hard to remedy something if people don’t know what the problem is.”

Where Is My Land, a national initiative founded off the momentum of the Bruce family getting their property back, now has more than 400 requests from Black families around the country seeking the return of their property or compensation. Co-founder Kavon Ward estimates that about half of those are viable claims with significant evidence of land theft, often in the South or Midwest.

While no official figures exist, it wasn’t uncommon for people of color to be driven off of their land if it suited the purposes of white neighbors or local officials, say experts. Native Americans and other groups have also long suffered this fate, and the problem persists today.

“People should be made aware of this so they can join the fight to get the land back and get restitution,” says Ward, who helped the Bruce family in their fight. “Think about the generational wealth stolen, think about the money they could have made from that business, not just the land. When you lose business, you lose the opportunity to buy more businesses, to buy more land.”

Where Is My Land co-founder Kavon Ward joined California Gov. Gavin Newsom before he signed a bill authorizing the return of ocean-front land to the Bruce family during a press conference held at Bruce’s Beach in Manhattan Beach, CA, on Sept. 30, 2021.

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Will more Black families see justice?

While the return of Bruce’s Beach to its former owners has galvanized many others to seek justice, replicating this victory across the U.S. won’t be an easy feat.

Families must prove ownership, which can be difficult if they no longer possess the proper documentation. Prior generations may have been forced to flee the property by racist neighbors or groups and not had time to grab the deed. Or the necessary documentation may have been destroyed or lost over the years.

Some states have statutes of limitations for those who want to go through the courts. Even so, if families can prove that fraud, such as forged signatures on ownership documents, was involved, sometimes their cases can proceed. But even if they present a compelling case, the property may now be owned by another family or business—or it may be of little use to them if a highway runs through it.

“Bruce’s Beach has raised awareness of the injustice done to Black property owners in America,” says Mitchell. However, “Bruce’s Beach is not magically going to unlock similar settlements where scores of families get their properties back in a very short period of time.”

The Bruce family’s land is now worth an estimated $75 million

The push to return Bruce’s Beach was successful, in part, because the land was county-owned and not privately owned. There weren’t sprawling government buildings, businesses, or homes on it. (The county will rent the lifeguard station that now sits on a portion of the property from the Bruce family.) The property is also located in a more politically liberal part of the country where officials were more sympathetic to the cause.

The two parcels of property given back to the Bruce family were worth an estimated $75 million last year, according to the Los Angeles Times. Two blocks from the property, a 4,300-square-foot home is on the market for $10,995,000. Another home, a block away, was sold for $12.99 million in September, according to Realtor.com® data.

Willa and Charles Bruce, who were financially ruined by the seizure, asked for $120,000 for the property a century ago. They were paid just $14,500 and worked the remainder of their days as chefs in other people’s businesses, according to the Los Angeles Times.

And the injustice of what happened at Bruce’s Beach continues to reverberate through the community, particularly in its racial makeup. Just 0.5% of Manhattan Beach’s residents are Black, according to U.S. Census Bureau data.

The return of the land “will allow my family to do what countless other American families have done since our country’s founding: inherit property and build family wealth over generations,” wrote Anthony Bruce, whose great-great-grandparents were Willa and Charles Bruce, in an op-ed for the Los Angeles Times. “The transfer of the property will provide a significant financial benefit for us while also giving us a sense of closure on a troubling chapter in our family’s history.

“I’ll never know whether my family’s business would have grown to rival that of Hilton or Marriott, both of which were founded around the same time as Bruce’s Beach and grew from equally humble beginnings,” wrote Bruce.

How was land taken from Black Americans?

In 1865, former slaves were famously promised 40 acres and a mule—a promise that the federal government reneged on later that same year. However, despite their challenges, Black Americans acquired around18 million acres of agricultural land between the Civil War and around 1920, says Mitchell. Today, Black Americans own somewhere around 4 million agricultural acres.

After decades of land theft, government-sanctioned redlining, predatory lending practices, eminent domain policies used to obliterate Black communities and promote segregation, and other discriminatory policies, the Black homeownership rate was just 43.1% in the fourth quarter of 2021. That was compared with 74.4% for white households, according to U.S. Census Bureau data.

“There isn’t any particular land that was more likely to be taken—it was whatever was valuable in that particular situation,” says Alison Rose Jefferson, author of “Living the California Dream: African American Leisure Sites during the Jim Crow Era.”

“There have been many instances where African-American land has been taken through eminent domain or otherwise [simply] because white folks wanted it,” she adds.

There were many underhanded ways that Black Americans lost their property. Sometimes they were driven off their property by the KKK or other white supremacists at the threat of death. Their homes could be burned down or they could be harassed by local police. This sent a message to other Black homeowners.

“The notion was these landowners didn’t know their place,” says Mitchell. “In several extreme cases, it took the form of several African Americans being lynched.”

Once they were gone, those who wanted the property would forge ownership documents, claim the land was abandoned and move onto it, or even say the ownership documents were lost or ruined and have new ones issued. Since the owners were gone, property taxes typically went unpaid, making it easier for others to acquire the area. Often local officials were sympathetic to the new, white owners.

“Folks just squatted on the land and said ‘now it’s ours,’” says Mitchell.

In the 21st century, communities of color were often bulldozed to make way for highways or other public works projects. (White Americans have not been immune to land theft or eminent domain either, particularly lower-income individuals.)

“Black people, generally speaking, are less powerful,” says Jefferson. “They are less likely to be able to hire a lawyer to help them fight whatever is going on.”

More recently, the foreclosure crisis in the 2000s disproportionately hurt Black homeowners who had often been targeted with subprime mortgages. Gentrification also continues to displace communities of color as property values rise as the neighborhood becomes more desirable. That generally results in higher property taxes that longtime homeowners may not be able to afford.

“The taking of African-American property has continued up until the present time,” says Mitchell. “It’s been a pretty steady problem.”

That doesn’t mean it’s a hopeless battle for those seeking justice. Mitchell has seen positive changes and shifting attitudes in recent years.

“History is a struggle, so you’ve got to be in the fight,” he says.

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Electric Shocks: The U.S. Cities Where People Are Spending the Most—and the Least—on Energy Bills

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Climate change seems like an abstract concept—albeit an existentially scary one—to many Americans. What’s less abstract is skyrocketing energy costs. That all-too-tangible burden is something more homeowners are dealing with each month in the face of colder winters and hotter summers. Worse still: The energy price crunch—spurred on by a trifecta of geopolitical strife in Eastern Europe, continuing post-pandemic supply problems, and escalating inflation—is likely to continue to worsen, at least in the short term.

Natural gas cost 60% more last month compared with the same time a year ago, according to the U.S. Department of Energy. And with nearly 90% of homes primarily heated by natural gas or electricity (which uses natural gas in its production), according to the Energy Department, it seems few were spared the financial pain.

But not everyone feels the pain equally. So the Realtor.com® data team set out to find the cities where people are spending the most on energy bills—and where they’re paying the least. To account for different costs of living across the country, we looked at energy burdens, which measure the percentage of income people spend on energy bills.

“This is the time when Americans are really spending on natural gas,” says Thomas Nichols, an economist at Moody’s Analytics. “It’s a period where we’re seeing a historic runup in prices.”

People who are facing the most severe energy burdens tend to live in less affluent areas of the South or Midwest. Cities with low energy burdens tend to be tech hubs and expensive metros where people have higher salaries and local officials are actively working to invest in green energy initiatives. However, while people in these cities may be spending less overall, it varies widely by neighborhood, with low-income neighborhoods and communities of color facing more of the burden.

People with high energy burdens “tend to live in less efficient homes, or they tend to have older, less efficient appliances in those homes,” says Matthew Cox, CEO of the Greenlink Group, a clean-energy technology and consulting firm based in Atlanta.

The age and condition of a home can largely affect how much people living there pay each month, as it costs more to heat or cool drafty, older homes.

The typical U.S. household spends more than $2,000 a year on energy bills, according to information from the federal government’s Energy Star program. Of course, costs largely vary by season and are usually higher in the winter months when people need to heat their homes.

To come up with our list, we looked at the energy burdens of 50 of the largest cities across the country using data from the Greenlink Group. It examined incomes and energy costs from 2018, the latest data available, so current energy burdens could be significantly higher due to rising gas prices and inflation. For geographic diversity, we limited the list to one city per state.

Typically, Americans spend about 3% to 4% of their income on energy, which includes gas and electricity, according to the U.S. Labor Department. Anything above 6% is considered a high-energy burden, while anything above 10% is considered a severe energy burden.

Cities with the lowest energy burdens

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1. San Francisco, CA

Median home price in January: $1.2 million
Mean energy burden: 1.7%

It may seem counterintuitive that one of the nation’s most expensive cities has one of the lowest energy burdens, but the math is simple: Many San Franciscans have high-income jobs, so they naturally spend a smaller percentage of their paychecks on utilities. Meanwhile, the progressive city has been actively working since at least 2011 to retrofit homes to reduce carbon emissions with its Zero Net Energy Homes Project.

The program includes things like air sealing, roof insulation, and replacing the HVAC and furnace, which can reduce energy use and costs overall. This can help renters, landlords, and homeowners as many homes in the city are older and can be drafty or use outdated heating and cooling systems.

“Updating older homes with energy efficiency upgrades directly reduces utility costs, which preserves [housing] affordability,” says Lowell Chu, manager of the energy program at San Francisco’s Department of the Environment.

Still, low-income households in San Francisco have an energy burden that is five times higher than that of wealthier households, according to the American Council for an Energy-Efficient Economy, or ACEEE, a nonprofit organization. The city is working with the area’s local utility provider to promote resources such as payment assistance and energy efficiency programs.

“Reducing energy burdens also reduces their monthly utility obligation,” says Chu. This allows “households to redirect funds to other needs.”

2. New York City, NY

Lower Manhattan

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Median home price in January: $1.5 million
Mean energy burden: 1.9%

With an energy burden of about 1.9%, New York is another city that has placed an emphasis on reducing its carbon footprint. The city has pledged to reach carbon neutrality by 2050, while the state set a policy goal in 2016 to make sure low-income New Yorkers pay no more than 6% of their income toward energy bills.

Despite this goal, the city estimates that more than 460,000 low-income families in New York City are still spending more than 6% of their salaries on energy bills. Low-income households and older adults have the highest median energy burdens in New York City, according to ACEEE. Broken down by borough, Queens and Brooklyn have the highest energy burdens while Staten Island and Manhattan have the lowest, according to a city analysis.

3. Seattle, WA

Median home price in January: $729,950
Mean energy burden: 2.3%

Seattle has led the way in climate initiatives, becoming the first city to adopt a green building goal in 2000. In 2005, the utility company Seattle City Light was the first in the country to become carbon neutral. Most of the city is now powered through hydroelectricity—generated using falling or fast-running water—which is considered a clean energy source.

Seattle is home to high-paying tech jobs at places like Amazon and Microsoft, and residents here tend to spend a smaller portion of their paychecks on utility bills. But while the energy burden has decreased in the past few years, that’s largely due to increasing incomes, not necessarily cheaper energy.

4. Denver, CO

Denver, CO

Median home price in January: $539,900
Mean energy burden: 2.4%

This hippie haven is all about going green, and the city has had a long-term goal of reducing greenhouse gas emissions by 80% in 2050 compared with 2005 levels. In addition, the city’s 80×50 Climate Action Plan, implemented in 2018, aims to rely 100% on renewable energy sources by 2030.

However, while the city’s energy burden fell by 1% in 2019 compared with six years earlier, according to Greenlink Group, that was primarily due to this boom town’s fatter paychecks. Energy costs did fall but at a slower rate than incomes increased. The story also varies by neighborhood.

The city has tried to lower energy costs with solar gardens, or solar panels placed in empty lots and on city building roofs.

5. Portland, OR

Median home price in January: $500,000
Mean energy burden: 2.7%

Portland is big on energy conservation. It was the first city in the country to implement a carbon reduction strategy, all the way back in 1993. Its updated Climate Action Plan aims to reduce the total energy use in all buildings built before 2010 by 25% by 2025 as well as reduce carbon emissions. And in 2017, the city council passed a resolution to supply the community with 100% renewable energy resources by 2035.

“Portland’s electricity rates are lower than those in many cities, in part because the Pacific Northwest has access to a lot of hydropower,” says Amelia Schlusser, staff attorney at the Green Energy Initiative at Lewis & Clark Law School in Portland. “It’s relatively cheap to produce and therefore helps keep electricity rates down.”

The other cities with the lowest energy burdens are Salt Lake City (2.8%); Raleigh, NC (2.9%); Washington, DC (3%); Virginia Beach, VA (3.1%); and Minneapolis (3.2%).

Cities with the highest energy burdens

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1. Detroit, MI

Median home price in January: $75,000
Mean energy burden: 7.2%

The Motor City has one of the highest energy burdens in the country, with residents spending more than 7% of their paychecks on utilities. And about a quarter of residents pay up to 30% of their paycheck on utilities, according to research from the University of Michigan.

Much of the burden coincides with the economic boom and bust of Detroit, once one of the nation’s primary manufacturing hubs, says Dominic Bednar, a post-doctoral fellow at Arizona State University, who studied Detroit energy burdens at the University of Michigan.

As people moved away and the city became even more underinvested, poverty rates have climbed, making it harder for folks to pay more for energy. And because 80% percent of Detroit’s housing supply was built before 1960, homes here are less likely to be energy-efficient.

Energy burdens disproportionately affect Black and brown communities here,

2. New Orleans, LA

New Orleans, LA

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Median home price in January: $359,000
Mean energy burden: 7.1%

New Orleans is one of the most at-risk cities facing climate change, largely because of its low elevation, rising sea levels, and storm-prone location on the Gulf Coast. Residents were reminded yet again of the inherent problems with the state’s electricity grid last year when Hurricane Ida hit; the city lost power for days, and two people died.

The city has struggled since 2005 when Hurricane Katrina destroyed swaths of housing stock and led to a mass exodus. The city has also grown significantly poorer since then. In the New Orleans area, the number of low-income households increased by more than 17% from 2010 to 2019, according to research from Louisiana State University, and the number of very low-income households rose by nearly 30%.

3. Philadelphia, PA

Median home price in January: $259,999
Mean energy burden: 7%

People who live in Philadelphia spend more on their energy bills than those in other parts of the country, but energy burdens mainly affect those who live in the inner portions of the city. In these lower-income neighborhoods, some people pay up to a third of their paycheck on utilities.

To combat this, the city’s Office of Sustainability has implemented focus groups in highly burdened communities, with discussions focusing on heat resiliency, gas usage, and weatherization. Its Clean Energy Vision program aims to reduce greenhouse gas emissions by 28% by 2025 and to achieve carbon neutrality by 2050.

4. Memphis, TN

Median home price in January: $135,000
Mean energy burden: 6.6%

Despite having some of the lowest gas and electricity rates in the country, Memphis residents have one of the highest energy burdens. That’s largely due to aging housing stock. About a third of homes in Memphis were constructed before 1980, before building energy codes were developed. But since then, the state of Tennessee has done little to bolster regulations for new homes and buildings.

“States and utility companies in the Southeast have a history of underinvestment in energy efficiency compared to other regions,” says Heather Pohnan, energy policy manager at the Southern Alliance for Clean Energy, a nonprofit advocacy group that promotes the use of clean energy in the Southeastern U.S.

“The end result is that if you’re a homeowner in the region and want to do home energy efficiency improvements, or install rooftop solar, you are largely on your own,” says Pohnan.

As many homes in the Southeast were not constructed to withstand winter weather, a large number of residents heat their homes with inefficient equipment like space heaters or even ovens. And in the summer months, Memphis becomes an “urban heat island,” experiencing higher temperatures than surrounding areas.

5. Birmingham, AL

Birmingham, AL

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Median home price in January: $149,900
Mean energy burden: 6.4%

Alabama Power, the state’s utility company, ranked dead last in energy efficiency in the ACEEE’s review of the 52 largest utility companies in the country. And a report from Brown University found the state’s energy commission “repeatedly adopted regulations that were directly drafted by utility officials” and were influenced by dark money campaigns.

“Our [energy] rates are pretty middle of the pack most of the time, but our bills are the highest in the country,” says Keith Johnston, director of the Birmingham office of the Southern Environmental Law Center, a nonpartisan environmental legal advocacy organization. “The utility has very little pushback on increasing rates.”

As in Memphis, there has not been significant investment in green energy initiatives. Although the mayor did sign a pledge to achieve 100% renewable energy in 2018, there was no target date for the goal.

Continued segregation continues to prevent communities of color from buying energy-efficient homes. In fact, nearly half of Black households and 40% of Hispanic households in the Birmingham metro area have an energy burden above 6%, according to ACEEE.

Finishing the bottom 10 are Richmond, VA (7.3%); Kansas City, MO (5.8%); Louisville, KY (5.8%); Indianapolis (5.5%); and Milwaukee (5.4%).

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An Affordable Stone Castle in Maine Is the Week’s Most Popular Home

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Your love for clicking on castles is well-documented. Whenever a fortress lands on the market with a resounding trumpet blast, interest inevitably follows.

And if a castle offers the additional appeal of affordability, watch out. We weren’t shocked, then, when a stone castle in Turner, ME, became this week’s most popular home on Realtor.com®.

Priced at $325,000, this 1,920-square-foot residence in Androscoggin County drew a barrage of clicks. Affectionately—and appropriately—known as “The Castle,” the stone and wood home built in 1990 is set high on a hill overlooking Maine’s celebrated blueberry fields.

Inside, the two-bedroom castle features hand-crafted spiral staircases built on-site by Maine Spiral Staircase.

Other homes you clicked on this week include a cozy house in a co-operative community in Pennsylvania, a lakefront home located at the end of a peninsula in Florida, an A-frame cabin with a hanging bed in Ohio, and a 550-acre Virginia estate complete with a private golf course and equestrian center.

For a full look at all 10 of this week’s most popular homes, just scroll on down!

10. 33 Meredith Ln, Barnstead, NH

Price: $395,000
Why it’s here: A pure lakefront delight. You can take in the waterfront views from the spacious deck, or go fishing in the pond right off your own private dock.

Built in 1987, this three-bedroom home is located in Locke Lake Colony and was recently modernized to include an updated kitchen with a breakfast bar. Vaulted ceilings with skylights and a lofted second floor let in plenty of natural light.

Barnstead, NH

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9. 5166 Hilltop Rd, Syracuse, NY

Price: $199,900
Why it’s here: This affordable and well-maintained home offers lakefront views, two outdoor patios, and a gazebo to take in the scenery.

The comfortable three-bedroom residence features newer windows and custom mechanical blinds that provide lots of natural light. Overlooking Onondaga Lake, it has beautiful views from every room.

Syracuse, NY

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8. 3584 River Rd, New Hope, PA

Price: $750,000
Why it’s here: Built in 1845, this historic three-bedroom home sits high above the Delaware River and offers waterfront views.

It has kept its historic charm, with exposed stone walls and hardwood flooring. Modern updates include a whole-house generator. There are two wood-burning fireplaces, dual entry access from the front courtyard to the kitchen and living room, and a screened-in porch to take in the riverfront.

New Hope, PA

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7. 710 Wilson Cir, West Chester, PA

Price: $625,000
Why it’s here: Built in 1777, this farmhouse is one of Chester County’s oldest recorded properties.

Nearly 250 years later, the six-bedroom home has been thoughtfully refreshed. It now boasts a multiple-zone central heating and cooling system, as well as custom millwork. Fresh paint can be found on the exterior, and the interior features Anthropologie and Restoration Hardware finishes, for a modern touch.

West Chester, PA

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6. 717 Gravel Hill Rd, Southampton, PA

Price: $170,000
Why it’s here: As reflected in the price, this four-bedroom home needs extensive repairs. However, it offers the rare opportunity to live in a 75-home cooperative community.

The majority of the 1,728-square-foot structure has already been stripped down to the studs. The new buyers will simply need to bring their imagination—and an application to join the co-op. Prospective owners must complete a six- to eight-month membership process before being approved to purchase.

Southampton, PA

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5. 1005 W. Second Ave, Windermere, FL

Price: $3,350,000
Why it’s here: Located at the end of a private peninsula, this recently remodeled four-bedroom home overlooks Lake Butler’s Wauseon Bay.

The resort-style home offers 4,439 square feet of space and includes a gourmet chef’s kitchen with luxury appliances, a first-floor primary suite, and three additional bedrooms upstairs. A spacious balcony spans the length of the second floor, offering breathtaking views of the lake and private dock.

Windermere, FL

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4. 211 Berrill Ave, Waterville, NY

Price: $179,500
Why it’s here: This 11-bedroom home built in 1832 needs some updates, but sits on 5 spacious acres of land.

This 5,592-square-foot home h

as four levels of living space and you can see hints of its historic past in the listing photos. Highlights include elegant stairways, fireplaces, doorways, and custom moldings. The affordable price tag will allow the next owners to tap into their creativity to bring this historic property back to life.

Waterville, NY

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3. 1303 N. State Route 123, Turtle Creek Township, OH

Price: $269,900
Why it’s here: This A-frame cabin sits on a 3-acre wooded lot and offers an open floor plan.

Built in 1969, the three-bedroom home features vaulted ceilings and a hanging bed in the primary suite. A buyer will want to make cosmetic updates, but the home’s HVAC, water heater, and roof have all been upgraded recently.

Turtle Creek Township, OH

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2. 1584 Rokeby Rd, Upperville, VA

Price: $23,500,000
Why it’s here: Located on 550 acres, the sprawling Heronwood Estate comes complete with its own private golf course and equestrian center.

The 7,000-square-foot estate features numerous outbuildings, including a 12-car garage, greenhouses, and a 15-bay service center, all of which could mean that you never have to leave the property.

The home is being sold as is and has six tax parcels that could be subdivided, but it is protected by an easement with the Virginia Outdoors Foundation.

Upperville, VA

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1. 7 Strawberry Ave, Turner, ME

Price: $325,000
Why it’s here: For the love of castles! This two-bedroom stone edifice is priced below the national median price. It also offers views of Streaked Mountain, from its setting on a hill high above blueberry fields.

The serene, 2-acre lot isn’t too remote and sits relatively close to restaurants, shopping, and health care facilities. You can snowshoe, cross-country ski, and hike right from the front door—or hit the slopes of the Sunday River ski resort an hour away.

There’s also an outside deck on each floor, where you can soak in the beautiful mountain views from your very own fortress.

Turner, ME

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The post An Affordable Stone Castle in Maine Is the Week’s Most Popular Home appeared first on Real Estate News & Insights | realtor.com®.

How Russia’s Invasion of Ukraine Is Already Rippling Through the U.S. Housing Market

Russia Invasion Ukraine U.S. Housing Market

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Russia’s deadly invasion of Ukraine has set much of the world on edge, with many fearing this could become the largest conflict since World War II. Russian airstrikes battering Ukrainian cities and bases have already roiled financial markets around the globe, rippling through the U.S. housing market.

Mortgage interest rates, which had been expected to keep inching up, instead retreated slightly, according to the latest Freddie Mac data. The stock and cryptocurrency markets, where many buyers pull money from to purchase property, tumbled. And ultimately, the already accelerated rate of inflation is expected to rise even further—hurting renters, buyers, and even builders who will continue to grapple with fast-rising construction costs.

“It’s all bad for the economy and housing. … It’s just a matter of how bad,” says Mark Zandi, chief economist at Moody’s Analytics. “There’s a number of different ways in which Russia’s actions will hurt housing.”

By just after 1:30 p.m. ET on Thursday, the S&P 500 was down more than 12.5% year to date, recovering a bit from the morning. Nearly half of that loss came in just the past five days as tensions escalated along the Ukrainian border. Stocks began rebounding Thursday afternoon after President Joe Biden announced more sanctions against Russia.

While that’s a substantial loss, it’s not a meltdown like what happened in the 2000s, when the markets lost more than 50% of their value.

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Watch: 2022 Predictions: Here’s What Buyers and Sellers Can Expect

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“Investors tend to overreact to bad news and then settle down,” says Robert Dietz, chief economist of the National Association of Home Builders.

This may have a larger impact on the luxury real estate market, where wealthier buyers often cash out stocks or cryptocurrency to purchase multimillion-dollar homes or second or third abodes. However, the uncertainty may also make buyers in all price ranges hesitant to pull the trigger on large purchases such as real estate.

For now, the uncertainty in the stock market amid fears of a full-blown war in Europe is helping to keep mortgage rates in check.

Many investors moved into the bond market, which includes mortgage bonds, as they are generally considered safer, less volatile investments. Bond prices rose as a result. And when prices go up, mortgage rates typically fall.

Rates averaged 3.89% in the week ending Feb. 24, according to Freddie Mac. Instead of cracking 4%, rates dipped slightly from 3.92% in the previous week.

“We’d expected rising rates,” says Realtor.com Chief Economist Danielle Hale. Now “they’re more likely to steady, slip even.”

And if buyers aren’t worried that they have to purchase a home now before mortgage rates go up any further, it could relieve some of the urgency in the market. This could lessen demand in the short term, resulting in reduced competition among buyers.

“That would affect the market at all price points,” says Hale.

However, the jury is out on whether rates will stay lower. Moody’s Zandi believes they may rise as a result of the turmoil and ensuing inflation.

Another potential fallout for Americans is rising oil and gas prices, as Russia is the second-largest oil producer on Earth. While that is expected to affect prices at the pump and home heating costs, it’s also likely to make goods more expensive. That’s because food, products, and building supplies often require oil in their production. Then they need to be transported around the nation, or even the world, to wind up on store shelves.

“If oil prices go up, that raises costs throughout the economy,” says Hale. “It means more inflation.”

This could potentially lead to job losses, warns Zandi, if Americans pull back on their spending. He’s not expecting another recession, but he’s not ruling one out either.

There are also likely to be more global supply chain disruptions.

“That’s a real problem for homebuilders,” says Zandi. “They can’t build to meet demand because they can’t get the building materials and appliances and the things they need to complete homes.”

Inflation and supply chain problems are expected to lead to higher construction costs. Prices for building materials are already up 22% year over year, says Dietz. Lumber is up 40% in the past 13 months, while a popular kind of particle board used in construction rose about 60% over the same period. Those costs will be passed along to new homebuyers.

“We will continue to see that low double-digit growth in new homes prices as we move through 2022,” says Dietz. “It’s going to be a tough year for housing affordability.”

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Why Disney’s New Storyliving Community May Not Have a Fairy-Tale Ending

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Disney

Disney superfans could soon own their very own house of mouse.

The entertainment juggernaut plans to build new communities of homes and businesses in Southern California’s Coachella Valley region of Rancho Mirage infused with Disney’s “special brand of magic,” the company recently announced.

The residential communities, branded as Storyliving by Disney, are a planned mix of single-family homes, condominiums, and villa estates about two hours from Disneyland in Anaheim. These neighborhoods will be geared toward fans looking for their real-life Magic Kingdom with activities and social opportunities galore. It is expected to be the first of several new residential communities.

However, some real estate and urban planning insiders aren’t quite enchanted at the prospect. They point to Disney’s previous, troubled attempt at creating a magical community in Florida, as well as the ever-changing demands of the housing market. Will Storyliving, about a half-hour southeast of Palm Springs, have a happier ending?

“The minute you say ‘Disney,’ I just think of a bunch of little kids running around,” Alan Long, a managing director at Avenue 8, a Los Angeles–based real estate brokerage, tells Realtor.com®. “I don’t know if Palm Springs, the desert, is the right place for Disney. We’re in a drought right now; Disney is going to have some real challenges on its hands.”

Disney’s first Storyliving community, called Cotino, will feature 1,900 homes in Rancho Mirage, nearby where Walt Disney himself once owned a vacation home, according to Disney. And in addition to residential, Disney says Cotino has zoning approval to build a hotel and “a range of shopping, dining and entertainment offerings.”

Concept art for Cotina, Disney’s first planned Storyliving community in Southern California

Disney

The draw for residents is the club membership they can snag with access to a waterfront clubhouse, private beach area, Disney entertainment, and group activities such as cooking classes and seminars. Cotino will also feature public markets and “vibrant businesses,” according to a video promo for the proposed development slated to be built by Arizona-based DMB Development.

Prices for the homes and memberships—as well as when construction is slated to begin—have not been announced. Nonetheless, Disney said it is already exploring other potential locations across the country for more developments to come. The communities, open to homeowners of all ages, “are intended to inspire residents to foster new friendships, pursue their interests and write the next exciting chapter in their lives,” according to a statement from Disney.

Locations will also include senior-living residences for individuals aged 55 and up, a competitive advantage marketing experts say might resonate with lifelong Disney lovers who grew up with the brand.

“The senior market is a great one because older generations tend to be more loyal long term to brands than the younger generations,” Karen Post, a Tampa-based marketing and branding specialist, tells Realtor.com.  

Disney will enlist its own employees, called “cast members,” to head its community association, likely mimicking the guest and hospitality services of its parks and cruise ships. In addition, the community is expected to feature a 24-acre water oasis said to “be built sustainably with low water consumption and using a minimum amount of additives and energy,” Disney said in the release.

Two years into the COVID-19 pandemic, the company’s Florida-based attractions have not yet rebounded from the virus-fueled losses. International locations of Disney theme parks continue to be affected by mandatory capacity and travel restrictions. And with the red-hot real estate market continuing to heat up as rents and homebuying prices continue to skyrocket across the country, a pivot back to real estate could be a viable option—if enough of these homes sell.

“It will be successful, especially if it’s attractively priced. The Coachella Valley market has blown up, and many are still wanting to take advantage of low interest rates to acquire a primary or secondary investment property for their portfolio,” says Roger Perry, executive estates director for Rodeo Realty in Beverly Hills.

Still, with the uncertainty of a groundbreaking date in sight, Avenue 8’s Long believes the development faces significant challenges ahead in this turbulent real estate market. Rising mortgage rates and a higher cost of living due to inflation could hinder prospective homebuyers from making purchases when the project is fully completed.

“The reality is it’s going to be three to four years until they’re ready to sell that property, and who knows where the market is going to be,” Long says.

Celebration’s storybook facade turned into a real estate nightmare

Of course, this isn’t the first time Disney got into the real estate market with an aspirational agenda. Celebration, FL, a small hamlet designed by Disney architects nearby Walt Disney World’s Magic Kingdom theme park just south of Orlando, was built in 1995.

It was designed to look like a utopian time capsule of the American suburbs and was marketed as “a place that takes you back to that time of innocence,” the New York Times reported. There were pastel-hued homes surrounded by sprawling palm trees in the town. The first 1,200 residents were chosen to live there from a lottery paying a $1,000 deposit for the opportunity to own a home in the community, according to the Celebration Foundation timeline. Celebration developed a church, hospital, schools, restaurants, and commerce.

However, less than a decade in, Disney sold the town to a private equity firm for $6.5 million, the New York Times reported at the time. The town’s intended sunny disposition quickly grew dark.

Over the years, the fabric of Celebration’s wholesome and inviting ethos began to unravel with its school district emptying out. A series of unrelated murders rocked the town. There were also reports of segregation issues and economic hardships bankrupting businesses amid the recession, forcing families to foreclose on their homes.

Residents of Town Center, Celebration’s business district, in 2016 sued the private firm Lexin that took over in 2004 for up to $20 million in damages. They claimed the firm refinanced the district twice and failed to monitor the monthly maintenance dues, neglecting work orders as the building deteriorated and suffered a reported structural collapse, according to Daily Beast.

Can Storyliving by Disney carve out a new model in community living?

The question remains: Will Storyliving be as idyllic as Disney would like future residents to believe?

Concept art for Cotino

Disney

“There is a very strong utopian element, but you can’t really make these communities affordable,” says Sonia Hirt, dean and professor at the University of Georgia’s College of Environment and Design. “Little by little, these communities end up being exclusionary and upper class, not by intent, but they just attract a certain type of resident.”

The community’s location in the middle of the desert could also be exclusionary. If there aren’t good jobs located nearby, future residents will likely be somewhat limited to those who can work from home.

“Is it really utopian to think that if you just create a community that is aesthetically pleasing, other things go away?” asks Hirt. “There’s always this desire to make a utopian tomorrow today, but so many times, tomorrow doesn’t quite come.”

The post Why Disney’s New Storyliving Community May Not Have a Fairy-Tale Ending appeared first on Real Estate News & Insights | realtor.com®.

How Bad Will It Be? Why the Spring Housing Market Will Be ‘Miserable’ for Homebuyers

Spring housing market

Realtor.com / Getty Images

Homebuyers had better be ready to suit up for battle.

Any buyers—or wannabe buyers—who thought last year’s meteoric jump in home prices was rough should be prepared for this spring to be even worse. A hellish trifecta of fast-rising housing prices, increasing mortgage rates, and record-low inventory of homes for sale is likely to present a brutal spring real estate market for those looking to purchase a new home.

“For the buyers, it’s going to be miserable,” predicts Mark Zandi, chief economist at Moody’s Analytics. “We’re going to see a lot fewer home sales this spring. … In many communities, they [just] don’t have something to sell.”

The nation has been mired in a housing shortage for years, but it’s now grappling with the fewest homes for sale ever. The lack of inventory is happening at the worst possible time as more Americans are hitting their prime home-buying years—and not finding anything on the market. The COVID-19 pandemic has only accelerated the problem as buyers sought out more spacious homes.

“It’s going to be a tough market for buyers,” says Gay Cororaton, a senior economist at the National Association of Realtors®. “There are more bidders than houses out there.”

Buyers should expect to pay more for housing as prices continue accelerating by double digits. Last year, all-time-low mortgage rates helped to offset the higher prices. But buyers won’t find that relief this spring now that rates are at the brink of cracking 4%—adding potentially hundreds of dollars each month to a borrower’s mortgage payment.

That doesn’t mean it will be impossible to successfully purchase a home—it just won’t be easy.

The competition from other buyers could thin out a bit as more folks are priced out of homeownership. If there’s less demand, it could mean fewer (or at least less heated) bidding wars that don’t result in mind-boggling offers over the asking price.

“We’re going to see a bit more inventory and somewhat fewer home shoppers,” says Realtor.com® Chief Economist Danielle Hale. She anticipates more homes will go up for sale as the weather warms up. “But that might not be until the later part of the spring.”

Will home prices slow down or continue increasing this spring?

It would make sense that, as mortgage rates rise, home prices would fall or at least stabilize. Logic would suggest that there has to be some limit on how much buyers can afford to spend on housing. Right? Nonetheless, in the short term, instead of prices chilling out, they’ve been shooting up at a faster clip as home shoppers rushed into the market hoping to lock in a home at a low mortgage rate before rates rise even further.

As a result, already high prices leaped 12.9% from a year earlier in the week ending Feb. 19, according to the latest Realtor.com data.

“What’s unclear: Is this the last gasp?” says Len Kiefer, deputy chief economist at Freddie Mac. Price growth was cooling, but then rates began climbing. “Six months down the line … the market may soften a little bit.”

That doesn’t mean prices will fall. It would require a tsunami of newly built homes going up for sale for prices to stop their seemingly inexorable rise. And that doesn’t seem likely as builders have struggled to ramp up construction and the demand for housing just keeps growing.

Kiefer expects it will take between four and five years for it to ramp up enough to meet demand. Builders are still contending with a major shortage of workers, supply chain problems making it harder—and more expensive—to secure building materials and appliances, and inflation further boosting costs.

Normally, more homes begin to trickle onto the market after the holidays. But very little of the past two years has been “normal.” In 2021, more homes didn’t come onto the market until April, says Hale.

“We will eventually see an increase in listings, but it may be a bit later this year,” says Hale. The number of homes for sale was down 28% in January compared with the same time last year, according to Realtor.com data.

Mortgage rates are poised to keep going up

Home prices tend to hog the spotlight as buyers and sellers are generally more concerned with the sticker price than the mortgage interest rate. But not focusing on the mortgage interest rate comes with some peril, as even a fraction of a percentage point can translate into some pretty big bucks over the life of the loan.

Buyers who were pre-approved for mortgages may find that they now qualify for less. Others will be priced out of the market or forced to choose smaller homes, fixer-uppers, or properties in less desirable locations.

For example, surging rates will tack on approximately $220 a month, or $2,640 a year, onto buyers’ monthly payments as rates leaped from a low of around 2.67% in December 2020 to about 4% in February. Some experts predict they’ll continue inching up. While that may not sound drastic, it can add nearly $80,000 over the life of a 30-year fixed-rate loan. Those with larger mortgages will pay considerably more.

(This assumes buyers purchased a $375,000 home, the national median home list price, with 20% down.)

Mortgage interest rates shot up to 3.92% for 30-year fixed-rate loans in the week ending Feb. 17, according to the most recent Freddie Mac data. That’s a little higher than it was in the runup to the start of the pandemic in March 2020.

“People who are just at the margins of being able to afford a home will think twice about buying,” says NAR’s Cororaton. “The upper-income brackets will be the ones jumping into the market. It just makes it all the harder for the lower-income folks.”

The higher rates are likely to make the inventory crunch even worse. Homeowners who locked in ultralow rates may be reluctant to sell their homes and buy new ones if their monthly housing payments will be higher thanks to those rising rates.

“If they have an interest rate under 3% … that can be a significant increase in their payment—even if they’re downsizing,” says Kiefer. “When inventory is so tight, every prospective home seller has an outsize impact on the market.”

Despite the increases, rates are still historically low. Three years ago, rates were in the mid-4% range. Twenty years ago, they were hovering in the high 6% and low 7% arena. Forty years ago, they were in the mid-17% range.

The one bright spot for buyers will be if sellers begin to cut prices as mortgage rates cut into the budgets of buyers. This could happen in some of the hottest housing markets that saw the largest price increases. But the jury’s still out on if and when this type of correction might happen.

“Mortgage rates will be both friend and foe to buyers this year,” says Hale of Realtor.com. “Monthly mortgage payments will be higher. However, those higher monthly mortgage payments are likely to knock some homebuyers out of the market. You may see somewhat less competition.”

Higher mortgage rates isn’t good news for home sellers

While it’s a great time to list a home, rising mortgage rates are expected to curtail what could have been an even bigger payday for home sellers.

Home sellers expecting “10 buyers lined up at the door” may be disappointed as fewer folks can afford the “stratospheric” home prices, says Moody’s Zandi. That means there may not be as many feverish bidding wars and buyers may not have the funds to go quite so high over the asking price.

Sellers will “get a good price, no doubt about it,” says Zandi. “They’re just not going to get the fortunes they thought they were going to get, because the buyers can’t afford it.”

Most sellers are also homebuyers, looking to move, buy larger abodes, or downsize. So while they may make a tidy sum selling their homes, they still need to find a home and compete in the bidding wars over it just like every other buyer.

“It’s a grind and it’s going to remain a grind,” Keifer says of this year’s real estate market. “The relief will come, but it will be slow.”

The post How Bad Will It Be? Why the Spring Housing Market Will Be ‘Miserable’ for Homebuyers appeared first on Real Estate News & Insights | realtor.com®.

Living the Dream: Here Are the Hottest Luxury Real Estate Markets in America Right Now

luxury real estate

Realtor.com

Wouldn’t it be incredible to wake up each morning and sink your toes into sandy, white beaches, look out your window at picture-perfect sunsets, and fall asleep to the sound of waves lapping the shore? For more and more Americans with unlimited (or at least jumbo) bank accounts, this is their life. The overall real estate business may be going through challenges lately, but make no mistake: The high-end luxury market is booming.

During the COVID-19 pandemic, demand for luxury homes in popular vacation areas, particularly along the coasts, has surged. The newfound ability of many of these wealthiest buyers to work remotely, more baby boomers retiring earlier into their forever homes, and cheap mortgages fueled the rush into some of the most naturally beautiful communities across the nation. A fear of the cities coupled with the desire to spend more time outside as COVID-19 raged on also gave these markets a push.

So what are the hottest luxury real estate markets in the country with some of the most extravagant homes? The Realtor.com data team set out to find them. The most expensive 1% of homes for sale nationally had a median $5.5 million price tag in January—and that was up 16.6% year over year.

“We’ve seen a lot of demand in vacation and second-home spots—particularly on the coastlines, on the beach, lakes, and in the mountains,” says Frank Nothaft, chief economist at CoreLogic, a real estate data firm. He’s seen many affluent Gen Xers and baby boomers buy up real estate in these areas.

“Those who have been very successful, who kept their jobs, and [who] saw the stock market go through the roof cashed out their gains to use that as their down payments to buy a second home,” adds Nothaft.

Over the past two years, many buyers have sought out larger homes with offices and areas for their children to attend school remotely. These homes often cost more than smaller residences, and buyers found they were more willing to move once they weren’t tethered to a physical office.

“People explored these new areas and found they liked them,” says Jenny Lenz, managing director of Dolly Lenz Real Estate, a luxury real estate firm that does business across the country. “Houses are always preferable to condos, especially after COVID. You don’t have to share an elevator or a gym or anything. … [And] water views are always much more desirable than landlocked homes.”

Rock-bottom mortgage interest rates also helped to make luxury home purchases more appealing.

Worth noting: The concept of luxury real estate is somewhat in the eye of the beholder—and the marketplace. A high-end home in parts of the Southeast or Midwest might barely make it as a starter home in the priciest areas of the coasts.

To come up with its rankings, the Realtor.com data team took a look at the nation’s luxury real estate market in January—as well as some of the most mind-blowing properties for sale. Markets were ranked by the number of unique viewers looking at home listings as well as how long properties were on the market. (The faster homes move, the hotter the market.) Only the most expensive 1% of homes in these markets were considered in this ranking, and only prices for this small fraction of homes were provided in the story. Markets typically include the main city and surrounding towns and cities.

So where are the hottest luxury real estate markets with the most jaw-dropping views this year?

The 10 hottest luxury real estate markets

Realtor.com

1. Kahului, HI

7505 Makena Rd, Kihei, HI

Realtor.com

Median list price for top 1% of homes for sale: $23.9 million*

Luxury starts around $1.6 million for low-rise condos and single-family homes with the price tag going well up from there, says real estate agent Michael Fish, of eXp Realty.

There is oceanfront real estate—and then there is beachfront real estate on the tropical Hawaiian island of Maui. Kahului is considered the industrial hub of the island, home to the main airport as well as some commercial shopping areas. But just south of the small city lies some of the most exquisite real estate anywhere.

The pandemic gave the market a boost with more folks who could suddenly work remotely moving in as well as vacation buyers and retirees. Locals also got in on the action, fearing they would be locked out of the market if they didn’t move fast. Investors also scouted properties to use as vacation and full-time rentals.

The seaside town of Kihei is popular with luxury buyers on a budget, with newly constructed, two-bedroom condos near the beach going for just over $1 million.

Nearby, Wailea is considered a step up—where celebs such as Clint Eastwood and Aerosmith‘s Steven Tyler have purchased homes—and then there is Makena, just south of Wailea, where homes can easily set buyers back $20 million. Amazon’s Jeff Bezos recently purchased a 14-acre estate not far away on Maui’s South Shore for about $78 million last year.

But Fish warns the market is competitive with a lack of homes for sale leading to bidding wars and offers over the asking price.

“If you can work anywhere in the world, why not Maui?” he asks. “The prices are rising, and who knows when it’s going to stop?”

2. San Luis Obispo, CA

7292 Exotic Garden Dr, Cambria, CA

Realtor.com

Median list price for top 1% of homes for sale: $40 million 

If money is no object, there is a $40 million gated estate on 78.5 acres in Cambria, CA, on the market that’s fit for royalty. The 12,000-square-foot mansion comes with a guesthouse, apartments for staff, and two event halls. There’s a helipad for easy access, equestrian facilities for horseback riders, and miles of trails for nature lovers. Bonus: The home comes with a 6-acre, pinot noir vineyard.

It’s not hard to figure out why the outdoorsy oasis of San Luis Obispo made the list. San Luis Obispo County, nestled between San Francisco and Los Angeles, boasts roughly 80 miles of beaches, multiple wine regions, plenty of golf courses, and a lively downtown in its eponymously named county seat. Luxury homes in this community founded by the Spanish in the 18th century often have ocean or foothill views.

Buyers with a little less cash to burn can check out this 3,300-square-foot Craftsman with views of the Piedras Blancas Lighthouse on nearly 1.4 acres in Cambria. The five-bedroom, five-bathroom home has two primary suites, double decks, and a guest cottage. It’s listed at $2.9 million.

3. Sebastian, FL

181 Ocean Beach Trl, Vero Beach, FL

Realtor.com

Median list price for top 1% of homes for sale: $6.2 million 

In Sebastian, buyers can choose from condos with all of the latest amenities that don’t require them to worry about maintenance. Sebastian may not be a household name, but the area is home to some stunning waterfront real estate. The city, on the eastern coast of Central Florida and across the state from Tampa, is near Vero Beach and Palm Bay.

This soon-to-be constructed five-bedroom, 4.5-bathroom unit in Vero Beach will feature a wraparound terrace, ocean views, private beach access, and a zero-edge pool. In addition, the new owners will be able to access their apartment through an elevator that opens directly into the unit. It’s listed at just under $4.5 million.

Despite a tight housing market, there are also multimillion-dollar, single-family homes with views of the Atlantic Ocean that buyers can compete over. This 8,000-square-foot mansion, listed for about $10 million, has both a pool and ocean access.

4. Hilton Head Island, SC

47 Brams Point Cir, Hilton Head Island, SC

Realtor.com

Median list price for top 1% of homes for sale: $5.5 million 

The lack of homes for sale isn’t dissuading wealthy buyers in Hilton Head, an island off the South Carolina coast. If their dream home isn’t available, they’re snapping up older homes in desirable locations and either completely remodeling them or tearing them down to put up new residences, says local real estate broker Wendy Corbitt, of Sea Pines Real Estate at the Beach Club.

Many of the buyers have vacationed in the area and hope to retire there. So they’re buying properties and renting them out when they’re not in town, says Corbitt. However, she’s also seeing many families moving to the area full time as well. Her buyers are primarily from the Northeast, particularly New York, as well as Atlanta and Ohio.

“We had quite an influx of people from cities who wanted to work from home because of the pandemic. They made the decision, ‘Why not go to my vacation home?’” she says. “You can be outside so many months of the year, and there’s lots of stuff to do.”

In-demand communities for those who can afford them include Sea Pines Resort, which skews more toward single-family homes, and Palmetto Dunes, which has single-family homes as well as high-rise condos.

“Other than living on or near the water, neighborhoods that offer high-end amenities like golf, tennis, bike trails, marinas/access to water, clubhouses, fitness centers, garden plots, and security gates are very high in demand,” says local real estate agent Becky Herman, of Charter One Realty.

5. Wilmington, NC

8204 Bald Eagle Ln, Wilmington, NC

Realtor.com

Median list price for top 1% of homes for sale: $3.8 million

Last year was the best year on record for the luxury housing market in the port city of Wilmington, about 90 minutes north of Myrtle Beach. Buyers have been drawn to the area’s beaches, boardwalk, and surplus of family fun.

The Riverwalk, a nearly 2-mile stretch along the Cape Fear River downtown, is popular with locals and visitors who can pop in for dinner at one of the restaurants or check out the art galleries and get in some shopping.

Those heading to the area will find a mix of newly constructed apartment and condo buildings as well as sprawling, single-family homes of all ages.

This grand house on the water is on the market for $4.8 million. The 6,100-square-foot beauty overlooking the Intracoastal Waterway comes with a guest wing with its own bedroom, kitchen, and garage. A bonus for buyers is the private pier and boatlift.

6. Barnstable Town (Cape Cod), MA

835 Sea View Ave, Barnstable, MA

Realtor.com

Median list price for top 1% of homes for sale: $15.9 million 

Barnstable, part of the Cape Cod metro area, has long been known as a primo summer playground and popular retirement destination for wealthy Bostonians and New Yorkers who want stately homes on the water. The combination of picturesque villages, scenic lighthouses, and lobster rolls—plus all those white-sand beaches—made the hook-shaped peninsula a particularly attractive destination during the pandemic.

While there are deals to be found in some of the less desirable communities, those who want a seaside oasis should be prepared to pay for it.

The biggest ballers can splurge on this seven-bedroom, 9.5-bathroom mansion spanning more than 15,000 square feet on just over 3.5 acres—with its own private beach on the Nantucket Sound—for $30 million. This listing boasts ocean views in nearly every room, a “resort-style” swimming pool, terrace, and summer kitchen along with a 5,000-bottle wine cellar, golf simulator, and massage room. There’s also a guesthouse and separate house for the staff.

7. Austin, TX

4511 Island Cv, Austin, TX

Realtor.com

Median list price for top 1% of homes for sale: $5 million 

Not every luxury market offers ocean views. Some have benefited from the overwhelming demand for housing overall.

Before the pandemic, local real estate broker Brad Pauly considered luxury anything above $1 million. Now it’s $2 million-plus as tech and other workers are continuing to move in, he says.

The state capital of Texas, known for its “Keep Austin Weird” slogan, emerged as the real estate darling of the pandemic, drawing big companies like Tesla and seemingly everyone else as well. This resulted in prices skyrocketing as buyers battled for a paltry supply of homes on the market. In January, the median price tag in the metro area was up 28% for homes of all price tiers.

“There’s a lot of new Austin residents who can afford luxury property. They’re coming from the coasts and, in a lot of cases, they still see Austin as a deal,” says Pauly, of Pauly Presley Real Estate. That’s partly because there is no income tax in the state.

The neighborhoods the wealthiest buyers are looking in are South Congress, Barton Hills, and the close-in suburb of West Lake Hills. The problem is the lack of homes for sale, which is preventing buyers from being too choosy.

“Have you ever driven around with a buyer who has an unlimited budget and can’t find anything? I have,” says Pauly. “They’re looking for whatever they can get their hands on, and if it’s not what they want, they’ll make it what they want.”

8. Portland, ME

74 Diamond Shore Rd, Portland, ME

Realtor.com

Median list price for top 1% of homes for sale: $4.9 million 

This coastal Maine city exploded in popularity during the pandemic as more folks who could work remotely relocated. Many were drawn to the city’s bustling, artsy downtown on the water filled with trendy restaurants, breweries, and boutiques. It gave the overall housing market a big boost, and the high-end luxury market went along for the ride.

Prices for the most expensive 1% of homes in the market were up 27% in January, according to Realtor.com data.

Buyers can choose from fancy condos, including this two-bedroom, two-bathroom unit on the market $2.7 million. The listing promises panoramic views of the water and private roof decks. Building amenities include a dog-washing station, shared Tesla and bikes, a clubroom, and courtyards.

Those seeking a bit more privacy can check out this two-cottage compound on three-quarters of an acre on Great Diamond Island off of Portland. The compound, which the listing notes is “prime for restoration,” is listed at $1.4 million.

9. Salt Lake City, UT

2388 E Oakhill Dr, Salt Lake City, UT

Realtor.com

Median list price for top 1% of homes for sale: $4.2 million

Over the past few years, tech workers have flocked to the Salt Lake City area, dubbed “Silicon Slopes,” helping the city snag a spot on the Realtor.com list of the hottest markets of 2022. Those highly paid workers plus the uptick in Californians and other remote workers heading to the region attracted to the outdoorsy lifestyle with fewer COVID-19 restrictions than some other states have given the local luxury market a lift.

And there’s more luxury housing on the way. The Astra Tower, which will have nearly 400 units of upscale housing, broke ground last month in downtown Salt Lake City. It will be Utah’s tallest building when it’s completed in 2024.

The communities in high demand from well-heeled buyers include downtown Salt Lake City, around the Mormon Temple, as well as the suburbs of Park City and Holladay.

10. Prescott, AZ

3350 Bar Circle A Rd, Prescott, AZ

Realtor.com

Median list price for top 1% of homes for sale: $5.7 million

Prescott, about two hours north of Phoenix, has a rep as an upscale haven for retirees. It’s particularly popular with Californians seeking forever homes. Multiple publications have named it one of the best places in the nation to retire thanks to its warm weather, a large population of seniors, and an abundance of golf courses.

Luxury buyers want homes where they can comfortably age in place with mountain views of the Thumb Butte and the Prescott National Forest, where outdoorsy individuals can hike or go mountain biking.

“Everybody wants the single-level home with great views and a three-car garage,” says local real estate broker Len McGee, of Coldwell Banker Realty. “They want to be able to drive in their garage and walk-in with their groceries and then go into their master suite.”

Popular, pricey communities include Hassayampa and Talking Rock, two private golf course communities in central and northern Prescott, along with American Ranch, a high-end community with an equestrian center.

* Prices are for the most expensive 1% of homes in each individual market.

The post Living the Dream: Here Are the Hottest Luxury Real Estate Markets in America Right Now appeared first on Real Estate News & Insights | realtor.com®.

What Is YIMBY? The ‘Yes In My Back Yard’ Movement, Explained

YIMBY Yes in my backyard

Photo courtesy of Leslie Dreyer for The Housing Rights Committee of San Francisco

You’ve probably heard of the NIMBY movement, which stands for “Not In My Back Yard” and describes an organized group of residents who oppose new construction in their neighborhood.

But are you familiar with the phenomenon’s younger, perhaps more progressive cousin, YIMBY, or “Yes In My Back Yard.” This community advocacy movement heartily supports new developments, especially ones that promote affordability or diversity.

Here’s a closer look at YIMBY and what to expect if there are supporters living near you.

A brief history of YIMBY

YIMBY is a relatively new term, coined in the 2010s. It rose from a movement in the San Francisco Bay Area among younger millennials and aspiring first-time homebuyers. Unable to afford the local housing market, they believed NIMBY baby boomers were to blame. It wasn’t just that these older homeowners had snapped up properties long ago. They had also, some believed, successfully stalled new developments that could have fed the area’s hunger for well-priced housing.

“Essentially, it was all these young people saying, ‘We can’t afford to live here’ and ‘We understand that you oppose [development], but we want housing options,’” explains David Reiss, professor of law and research director at the Center for Urban Business Entrepreneurship in New York City.

California YIMBY is a major force in the movement. It’s a housing advocacy organization with 80,000 members and 20 volunteer teams across the state. According to the group’s website, members are reacting to a “lose-lose situation,” where “cities enforce a severe shortage of affordable homes through laws that restrict home building.” This in turn, they say, “forces Californians to compete with each other for sparse, and increasingly expensive, housing.”

Similar groups such as Seattle for Everyone and the New York YIMBY blog tend to pop up in large urban areas around the country where the younger generation feels shut out of housing that won’t bankrupt them.

Unfortunately for YIMBYs, “NIMBY homeowners tend to have the upper hand,” Reiss notes. “They have more resources, and they are the local establishment.”

“There’s a lot of hatred of development out there,” Nikolai Fedak, the founder of New York YIMBY, told the New York Times. Yet in his mind, anti-development NIMBYs are widely reviled as well, often accused of acting out of pure self-interest rather than what’s good for the community.

His opinion of NIMBYs’ motivation? “Generally it comes from selfish people who don’t want to lose their views” of the city skyline if new buildings go up.

How YIMBYs can shape better cities

Sure, affordable housing is a driving force for YIMBYs, but they also champion sustainable development.

For example, the Colorado YIMBY group Better Boulder says it’s all about “well-designed infill [housing]” and revitalizing vacant buildings. It hopes to “reduce our impact on the climate, encourage less driving, and keep our community welcoming and economically thriving.” In particular, it has opposed Boulder’s outdated street parking regulations that make neighborhoods less walkable.

“Some would argue YIMBY groups are calling for too much development in urban cores, clogging streets with traffic, and overcrowding areas,” says Al Maiorino, president of Public Strategy Group, a public affairs firm in Boston. “They may also feel YIMBY groups are only in search of more affordable housing. The reality is, they care for economic development and bringing affordable and other housing to urban areas. They have successfully changed zoning laws in cities to allow for more residential development.”

What’s next for YIMBYs?

In 2016, YIMBYs celebrated a pivotal win against NIMBYs when the Obama administration released a “toolkit” to help local communities reform overly restrictive land-use regulations strangling the U.S. housing market. In it, YIMBY-friendly initiatives were plentiful, including changes in zoning laws to pave the way toward allowing the construction of more “high-density and multifamily” housing and accessory dwelling units.

The report marked the first time in several decades that the White House elevated local zoning and land-use regulations to a national level. Indeed, President Barack Obama announced at the time, “We can work together to break down rules that stand in the way of building new housing and that keep families from moving to growing, dynamic cities.”

Since then, the tide of public sentiment seems to have turned in favor of YIMBYs—and while concrete progress in the form of actual houses has been spotty and slow to build, the Biden administration seems poised to push a similar agenda ahead.

The Unlocking Possibilities Program within the American Jobs Plan is a $5 billion competitive grant program that helps reform exclusionary zoning, aimed to support more affordable housing along with new land-use and zoning policies that will contribute to this goal.

So while YIMBY as a movement may be younger and smaller than NIMBY, it seems to be turning into a fairer fight by the day.

The post What Is YIMBY? The ‘Yes In My Back Yard’ Movement, Explained appeared first on Real Estate News & Insights | realtor.com®.

Inside the Wild Race To Build the Best Vacation Rental in Florida

Wild Orlando Florida Vacation Homes

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Sleeping quarters for over 30 people. Elaborately themed rooms for kids. Enormous backyard pools.

These over-the-top amenities are all part of the latest trend in vacation rentals in the Orlando, FL, area. In this tourist-clogged part of the Sunshine State, there’s a race on among builders and investors to construct vacation homes that resemble boutique hotels. Boutique hotels, that is, designed to appeal to both adults and kids.

It used to be that theater rooms and arcades were features that set these homes apart. Now they’re standard in homes that are built strictly to entice out-of-town guests to stay for at least a few nights.

“It’s kind of the one-up effect,” says Ryan McNally, vice president of McNally Construction Group. Vacation homes, he says, “are becoming almost like mini theme parks within themselves. The next guy always wants to one-up the latest and the greatest that’s been done.”

McNally, a luxury builder, has three tricked-out vacation homes under construction and at least four more in the planning or permitting stages in the Orlando area.

“Most people are going to the theme parks anyway,” he says. “But you don’t have to—because you have everything you could want within the home.”

His company’s latest 10,630-square-foot creation was sold last year for $5.9 million. It features a two-story themed playroom with a ball pit and slides, a dress-up area, a “princess” bedroom, a race car bedroom, a chef’s kitchen, six en suite bedrooms for the adults, a 12-seat theater, and a huge pool.

“I consider myself a big kid. It’s a joy just thinking and brainstorming with artists, theming people, architects, and the client about what we can do,” he says. “I can make a lot more money building square boxes and doing high volume, but these [vacation homes] are taking it to another level.”

“Harry Potter”-themed bedroom in Orlando, FL, vacation rental

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“Star Wars”-themed bedroom

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Two-story playroom

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Bedroom

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Setting homes apart

With huge homes built expressly as short-term rentals, more amenities add up to more bookings.

“We find a lot of people want to book the latest new house. They want a property that’s new to the rental program,” says Leigh Bateman, president of Magical Vacation Homes, a rental company with more than 170 homes available for short-term rentals. “When you have thousands of rentals to choose from, you’re going to choose the one that has all of the upgrades.”

The revenue equation also depends heavily on heads in beds. The more people who can stay comfortably in a home, the more revenue a homeowner or rental company can book.

Bateman says four- and five-bedroom, single-family residences turned into rental homes used to be the norm. Then, roughly a decade ago, developers began building homes with eight, 10, or even more bedrooms on double lots.

According to one listing agent, Penny Stokes-Hilton with Top Villas Realty, buyers of these high-end homes can expect an 8% to 10% return on investment, and still have the property at their disposal for vacations of their own.

Keeping kids happy

In decades past, a kids’ themed bedroom used to mean fun wallpaper and a themed comforter on the bed. Suffice it to say, that doesn’t cut it anymore.

For the kids’ rooms in these Florida homes, it’s de rigueur to have life-sized characters, 3D images, hidden rooms, tunnels, and more.

“The bar is definitely set way higher in the last few years for themed bedrooms,” Stokes-Hilton says.

She recently had the listing for a massive eight-bedroom house with a secret. Behind a hidden door lurks a full-sized replica of the Hogwarts Express from “Harry Potter” with bunks inside.

The builders “had to crane it in and then put the roof on—it was a big deal,” she explains. “People come from all over the world to be photographed on this train. [The owner] has 40% repeat bookings, because people just love it.”

Listed for $5.6 million in October, this home was sold last week for $5,313,750.

Another area home on the market for $11.6 million comes with a “Star Wars“–themed room and a princess room.

“Harry Potter” bunks

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Secret door

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“Harry Potter” bedroom

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“Star Wars”–themed area

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Interior

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Interior

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Fun in the sun: Also essential

Even the standard Florida pool has morphed into a main attraction. Now luxe pools offer resort-style living, with grottos, slides, and waterfalls.

“We get a lot of Europeans. They love south-facing pools, because they want to take advantage of the sun while they’re here, because they don’t get much of it back home,” McNally explains. “People come to Florida, and they just want to be in the pool.”

The “Harry Potter” home that Stokes-Hilton listed also offered three sunning areas—including a rooftop deck.

Pool

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Rooftop deck

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Adult amenities are also important

Visitor satisfaction isn’t all about pleasing the kids.

“We also do kind of lounge and bar areas—a pool table or darts or something for the adults to do in a separate area,” McNally says. “Now we’re even doing some bars that overlook the gym area or the kids’ areas. We think about the layout, so Mom and Dad can have a cocktail by the pool, but still have a visual on the kids.”

Home theaters and gyms are standard. McNally says bowling alleys may be the next frontier.

What’s behind this race?

No single factor caused this explosion in vacation home expansion. It reflects a larger shift in the hospitality and tourism industry—one that has accelerated over the past couple of years.

“People were starting to see they could book a vacation home and have multiple friends and families together in one property,” Stokes-Hilton says.

McNally talks about a client who formerly booked five suites at a resort, one for each part of his family.

“They weren’t seeing each other, and they’d give the kids a bunch of money to go play at the arcade,” he says. “Then they would go out to eat every night and spend a fortune at every restaurant. They weren’t getting the satisfaction of being together as a family.”

As an antidote, a home with at least eight bedrooms means that extended families can remain under one roof and spend more time together.

The oversized vacation home trend, slowly percolating over the past decade, went into overdrive during the COVID-19 pandemic.

As Bateman explains, renters find these homes to be a safer alternative than the shared accommodations and amenities tourists would encounter at a large resort.

Interior

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Bedroom

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Lounge area

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All about Reunion

The homes mentioned above are all in the town of Reunion, which is both a resort and a master-planned community about 6 miles from Walt Disney World. While all types of vacation homes are scattered around the Orlando metro, Reunion is the only resort-style community specifically seeking short-term renters.

Reunion has a mix of condominiums and single-family homes. It also offers three golf courses, a water park, and plenty of restaurants.

One thing that sets the town apart is that it’s zoned for short-term rentals. Bateman, the rental company president, says that only a quarter of owners in Reunion are full-time residents. The rest of the housing inventory is devoted to rentals.

“My parents bought a house in Reunion 16 years ago, and they would rent it out for a few key dates, just to cover their mortgage and overhead,” Bateman says.

Soon, her parents began operating three homes in the town as a business.

A majority of the owners who market their homes with Bateman’s company buy them strictly as an investment.

Bateman says smaller homes in the area can bring in about $55,000 to $172,000 a year, with rents ranging from $200 to $900 per night.

Over-the-top huge homes can average about $4,800 a night. One home raked in $1.6 million in rent in a recent year.

The post Inside the Wild Race To Build the Best Vacation Rental in Florida appeared first on Real Estate News & Insights | realtor.com®.