The Property Brothers Reveal Furniture Trends and Fails, and What Makes a Home Feel Complete

Property Brothers

Living Spaces

Since “Property Brothers” stars Drew and Jonathan Scott are famous for designing and renovating houses, it makes sense that they’d also be interested in having a hand in what goes into those houses: the furniture.

The brothers recently collaborated with furniture retailer Living Spaces on a new collection of 90 pieces—including sectionals, dining sets, rugs, and accessories—designed to be reflections of the brothers’ own homes in California. (Drew’s style is “old Hollywood,” while Jonathan’s is “laid-back California.”)

Curious to learn more, we joined a panel of journalists to interview the Scott brothers on their top furniture tips, what they’ve been up to lately with their own home renovations, and much more you’ll be surprised to know.

What was your favorite piece of furniture as a child?

Drew: When we were growing up, we had a plaid sofa that we would all squeeze onto: our parents, three kids, plus our puppy. I remember thinking it was comfy and cozy, but let’s give people a few more options where they can flex a bit, and have more options on the way it lays out, depending on your space.

You have designed over 500 homes. How have your renovations inspired this line of furniture?

Jonathan: The important thing to remember is that trends change, styles change, but there are some elements that are just timeless. They just extend, and they live on, and they look beautiful.

We want to bring families something that’s going to be a good investment. We have a crazy rule that we design products that we think will make your life easier. We look at those trends that have gone on for a really long time.

Drew, we know that you and Linda are expecting. How do you find furniture that’s kid-friendly but also stylish?

Drew: One of the big struggles that people have is to figure out what comes first, style or safety. That’s why a lot of our pieces have rounded corners, where you have that safety for children.

In my living room, I actually have some chairs I love. They’re a beautiful midcentury modern look. But they have supersharp corners. I actually broke a toe on one of those chairs. And so we have those and our coffee table that we’re swapping out for some of our pieces that have rounded corners.

Jonathan, we know that you recently purchased a house with Zooey Deschanel. How are those renovations going?

Jonathan: Like everyone else in the world, there are so many logistical delays. But we’re getting there. This is the first time I’ve ever designed a dream home for myself with my partner, who fortunately has amazing taste. So we’ve designed the house to solve all of our issues, whether it’s hosting the kids’ birthday parties or having friends over. We’re trying to make sure that we incorporate all that into every space.

One of our most important decisions we make is about furniture. We’re trying to make sure that we have furniture that pays homage to the era of the home—it’s almost a 100-year-old home—but something that is also going to stand up to kids. Kids are rough on stuff.

Drew: When Linda and I were designing our house, we were kind of butting heads a little bit on some of the elements, like who gets more of the closet space. I won; I got more of it. So I was wondering [to Jonathan] if there was anything that you and Zoey were butting heads on?

Jonathan: This is Drew’s argument when we were building the main suite closet in their room. I was on the other floor, and I could hear Drew trying to negotiate Linda down: “Well, you’re only about half my size, so how about if you only have 30% of the closet? Your clothes are smaller.” And then she’s like, “No, but I have more of them.” So they went back and forth and landed on 60-40.

Zooey and I, we were pretty good. There were a few funny things, like Zooey is anti-recessed lighting, so she doesn’t want any recessed lighting. Not that I think recessed lights are amazing, but I like to also see. And so, you know having that kind of a blend is important.

Complete this sentence: No home is complete without a really great ———

Drew: No home is complete without a really great set of twins! No, no home is complete without a really great sectional that you can adapt to your space to make it perfect. Picture get-togethers with family and friends, movie nights with the family, whatever you’re doing, it makes it feel like home.

Jonathan: I would finish that by saying no home is complete without the perfect vibe.

Drew: It’s really nice when you walk into a space and the moment you walk in, you see the personality of the people who live there—that’s what I love. I mean, if you have that little bit of glam or that little classic style, and that’s what you see when you walk into that space, it’s perfect.

Jonathan: Fortunately Drew’s wife, Linda, has lots of style, so it makes up for Drew.

Property Brothers Drew and Jonathan Scott designing
“Property Brothers” stars Drew and Jonathan Scott

Living Spaces

Jonathan: One of the things that I think is so important is finding pieces that can be multipurpose. That’s what I like about a modular system for a sectional, is how can we change it up. Having the ability to mix and match is super important.

Drew: People went very structured for a long time, trying to have a more structured contemporary look. But we love the idea of even if you do want something that’s a little more structured, you can bring in comfort, or a relaxation element.

Are neutrals in or out?

Jonathan: It’s important to realize that with design, neutral can be a great thing. So when you look at a lot of these tones, they’re neutral but they’re not in any way boring. They’re beautiful, and there’s another story to be told from the textures of the fabrics.

Is there one hard and fast design rule you think all homeowners should follow?

Jonathan: We do say that every room in your design should have a focal point, a statement piece. Whether it’s a chandelier, a rug, art, sofa. Whatever it is, you get to choose what that is, and seamlessly blend in the rest.

Property Brothers Drew and Jonathan Scott
Drew and Jonathan with a bed from their collection

Living Spaces

What are the most common furniture buying mistakes that you see people making?

Jonathan: Size is so important. You will get someone who sees something beautiful and says, “Oh my gosh, I want it,” and they get it home and they realize, “Well, now you have to turn sideways to shimmy past it to get into the next room.”

Make sure you measure everything out. Every iPhone has a measuring app built into it. Make sure size is being thoughtfully considered.

Drew: Another thing is that a lot of people will say, “I love this.” They’ll buy it. Then another thing, “I love that!” Then they’ll buy that. And they’re jumping around buying all these different elements. And I’m all for an eclectic design—you don’t want everything to be all matchy-matchy-matchy. However, sometimes people get all these different items, and then they realize it all just doesn’t work together.

The post The Property Brothers Reveal Furniture Trends and Fails, and What Makes a Home Feel Complete appeared first on Real Estate News & Insights | realtor.com®.

Here Are the Cities With the Cheapest Rents in America Right Now—Take a Look

Cheapest Places to Rent Right Now

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It’s no longer a renter’s market these days, to say the least.

The days of getting one month (or two, or three) free with a new lease are a thing of the past. COVID-19 pandemic deals have all but disappeared. There are now bidding wars for some New York City apartments. And renters who need to renew their lease in the next few months are likely to be in shock at how much more their landlord wants them to pay per month.

This, of course, comes at the worst possible moment.

Companies are bringing employees back to the office at least a few days a week, meaning commute times matter again. Inflation has made just about everything more expensive, and the war in Ukraine is sending gas prices even higher. And as home prices continue to reach record heights across the country, many potential buyers are being forced to rent longer to save up for a downpayment. But with national rental prices hitting historic highs, how much savings are left each month?

That’s why the data team at Realtor.com® wanted to take a look at where renters could get a break. While rental prices are soaring in many of the big cities on the coasts (they rose more than 50% in Miami in the past year), there are some affordable havens offering more budget-friendly rental options. That’s especially helpful for those fortunate enough to be able to work remotely and bring their big-city salaries to smaller real estate markets.

“Last year’s [rent] increase was the biggest we’ve seen at any time in recent history,” says Chris Salviati, senior economist with Apartment List, an online marketplace for apartment listings. “It’s a nuanced picture of supply and demand: simply a lot of households looking for a fairly scarce number of vacant units right now.”

Rents for studios to two-bedroom units were up 17.1% in February, according to the latest data from Realtor.com. It was the seventh straight month of double-digit rent growth, and rent reached a new high of $1,792 per month nationally. Every one of the 50 largest metropolitan areas recorded rent increases, with Sun Belt markets in Florida and Arizona seeing some of the fastest growth. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

So where did we find bargains? The places with the cheapest rents were generally located in the Midwest and South, where the cost of living (and economic growth) is lower. There are also quite a few college towns on the list, since landlords need to cater to students with limited income.

“A lot of these places tend to be midsize rather than bigger cities,” Salviati says. “They were more affordable markets pre-pandemic and have continued to be.”

To come up with this list of the most affordable metros for renters, our team of data whizzes analyzed March rent estimates from Apartment List in cities with at least 50,000 residents. We looked at the overall average rents of all sizes and types of apartments, from studios to four-bedroom units. The list was limited to one city per state to ensure geographic diversity.

Ready to save more of those precious paychecks? Dig in.

cities with the cheapest rents
The places with the cheapest rents were generally located in the Midwest and South, where the cost of living (and economic growth) is lower.

Realtor.com

1. Odessa, TX

Odessa, TX

Photo courtesy of weather-us.com

Average rent in March: $676

Major metros in Texas have seen record growth over the past couple of years. Austin has become a major center for tech; Dallas, the financial center of the Lone Star State, drew 64,000 new residents since the pandemic, according to the Dallas Federal Reserve; and Houston, which used to be the center of oil and gas, has diversified its economy and become a cultural beacon for food, music, and the arts.

Odessa’s economy, on the other hand, is still driven by oil and gas, and it’s been in a bust cycle since 2020, when oil prices began wild fluctuations. People losing jobs and leaving town means there are more apartments than people to fill them.

Oil and gas companies “had a lot of big layoffs, and vacancy got really high,” says Harold Hunt, a research economist at the Texas Real Estate Research Center at Texas A&M University. “It’s coming back, but is still extremely slow.”

Many folks who got hit hard in the oil downturn during the pandemic have moved on to more stable careers and cities, so it’s been hard for companies to find talent. Plus, supply chain issues have made it difficult for producers to increase oil production.

So Odessa is offering some serious deals on rent right now. A one-bedroom apartment with walk-in closets and a community pool is listed for $660 a month. Those looking to splurge can get an entire three-bedroom house with a raised deck and covered patio for $1,500 a month—about half the price of a one-bedroom in New York City.

2. Lake Charles, LA

Lake Charles, LA

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Average rent in March: $749

Lake Charles had a rough couple of years. In summer 2020, it was hit by not one but two hurricanes, Laura and Delta. Then, a deadly ice storm came that winter, followed by a catastrophic flood last spring. The storms damaged about half of the homes in the surrounding parish with even more falling prey to the ensuing disasters in 2021.

Renters who lost their homes found themselves competing against their neighbors for the few units left standing, which led prices to skyrocket. So, many just left town.

While there is still plenty of demand for the few rental units that remain, it’s not quite what it was a year ago. Rents in Lake Charles are up 11.8% since before the pandemic, according to Apartment List. Still, these days, renters can find plenty of solid deals, including this one-bedroom unit for $760 a month. For those looking for more space, this newly renovated three-bedroom apartment is on the market for $839.

3. Davenport, IA

Davenport, IA

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Average rent in March: $773

Like the rest of the Midwest, rents in Davenport remain low compared with the rest of the country. That’s mostly because the typical Davenport household pulls in about $53,000 per year, according to the latest census data. (It’s $67,500 nationally.)

Cheap rents aren’t the only draw to the area. The extremely affordable city offers small-town vibes with craft breweries, local shops, and music venues. Its beautiful parks and green spaces regularly host community events such as Downtown Davenport Street Fest and one of the largest St. Patrick’s Day parades in the U.S.

In this growing city, folks can find comfortable rentals for a steal, including this remodeled two-bedroom apartment asking for $695 or this three-bedroom duplex on the market for $950.

4. Cleveland, OH

Cleveland, OH

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Average rent in March: $815

Cleveland has been attracting hordes of out-of-state investors seeking properties that cost way less than a down payment in New York City or California. It’s a great place to buy, but, because of those outside investors turning their purchases into rentals, there are also tons of great options for lease. And most are still incredibly affordable.

Even in the trendy suburbs where young professionals choose to reside within walking distance of craft coffee shops and cool restaurants, renters can find great deals that would cost three times the price in bigger metros.

A one-bedroom apartment inside a multifamily home is listed for just $500 per month. For those looking to splurge, a studio in an amenity-laden building with a 24/7 fitness center, rooftop patio, community lounge area with kitchenette, Wi-Fi, and a pet-washing station is priced at $969 per month.

5. St. Cloud, MN

St. Cloud, MN

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Average rent in March: $844

While other cities have seen rental rates skyrocketing, St Cloud’s market has remained relatively steady throughout the pandemic. The college town, home to St. Cloud State University, has seen normal rent increases in the $25 to $75 a month range, says Amy Snegosky, property manager with Premier Prop Management.

Declining enrollment at local colleges and universities means less demand for rentals. Meanwhile, the city has seen a spike in crime, which might make the area less attractive to some.

While renters can find incredibly cheap units right near campus, including this studio for $275, it’s even possible to find deals in more desirable suburbs like Sauk Rapids. There, renters can find new apartments with amenities for less than the cost of a room in coastal cities like L.A. This one-bedroom with a heated underground garage, rooftop terrace, and granite countertops is going for $1,095 a month. It’s also within walking distance to restaurants, shops, trails, and more.

6. South Bend, IN

South Bend, IN

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Average rent in March: $845

Home to the University of Notre Dame, this Midwestern city offers more than world-class football games. South Bend locals say it’s an underrated small town, with quaint neighborhoods, great farmers markets, food co-ops, and even jazz clubs.

Luxury apartments with high-end finishes and desirable amenities can be leased starting at $1,000 for a studio. Those reasonable prices and the ability to work remotely have lured young professionals from bigger metros like Chicago (1.5 hours away by car) looking for a lower cost of living.

Other available rentals include this $800 one-bedroom apartment or a studio with a gym, private workspaces, and a rooftop terrace across the street from the university for $1,042 a month.

7. Grand Forks, ND

Grand Forks, ND

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Average rent in March: $865

Like just about everywhere else in the U.S., rents have gone up in Grand Forks—they just haven’t gone up all that much. Rents here have increased just 1.7% since March 2020, before the pandemic.

The University of North Dakota and Grand Forks Air Force Base are both based here, so there are plenty of renters on a budget. While most of the military folks stationed in town opt to buy since their monthly living allowance can cover a good portion of a mortgage, there are still plenty of folks looking to take advantage of the relatively affordable rents.

For $890 a month, it’s possible to get into a two-bedroom apartment with access to indoor pools, a hot tub, a sauna, and other amenities. Those on a serious budget can find studio apartments for less than $500 a month.

Most of the folks in town, however, still prefer single-family homes, says Jodi Danzl, a Realtor® with Berkshire Hathaway HomeServices Family Realty.

“You can get a very decent house for $1,500 compared to renting here,” Danzl says.

8. Wichita, KS

Wichita, KS

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Average rent in March: $928

This family-friendly metro is an aviation hub, the centerpiece of a region producing more than a third of all the planes built in the U.S. It’s also home to McConnell Air Force Base, and big employers include Spirit AeroSystems, which makes parts for Boeing planes.

Because it has such a large population of military folks who often move from place to place, there are a lot of rentals to be found. Options include this three-bedroom house asking $995 a month or this brand-new three-bedroom apartment listed for the same price.

9. Little Rock, AR

Little Rock, AR

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Average rent in March: $943

Set on the banks of the Arkansas River, downtown Little Rock has been completely revitalized as a walkable destination over the past few years.

The hometown of former President Bill Clinton is the location of his presidential library, the William Jefferson Clinton Presidential Center. It also boasts the renovated Robinson Center Performance Hall and lots of restaurants and nightlife. Because rents are so darn affordable here, residents can actually spend their money doing things rather than just paying for a roof over their heads.

But low-paying jobs (about 1 in 5 residents lives in poverty) are part of the reason rents remain so affordable.

Right downtown in the historic Quapaw Quarter, it’s possible to find a studio apartment for just $500 or even a remodeled two-bedroom with pool access for a mere $825.

10. Greenville, NC

Greenville, NC

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Average rent in March: $949

Rents (and home prices) have spiked by more than 30% in some parts of North Carolina, as people from more expensive cities are coming for the lower cost of living and mild weather.

Greenville, in the rural eastern part of the state, is growing substantially, with more buyers and renters seeking housing than there are units available. But unlike other major metros in the state, such as Raleigh and Charlotte, it has been a bit slower to invest in economic development. While the unemployment rate is about the same as the national average, 27% of the population city lives in poverty, according to the latest census data, so they can’t afford high rents.

“We’re seeing a lot of people moving to the area,” says Michael Overton, owner and principal broker of The Overton Group. “Rent is still below [other North Carolina cities], but it’s high compared to what it was two years ago.”

Renters there can find a two-bedroom house for just $725 a month and, for folks who want all the luxuries of a modern building, a two-bedroom apartment with social events, a clubhouse, two swimming pools, a sauna, and a 24/7 fitness center is listed for just $1,584.

The post Here Are the Cities With the Cheapest Rents in America Right Now—Take a Look appeared first on Real Estate News & Insights | realtor.com®.

Bargain Alert! This Spring’s Hottest Real Estate Markets Include Some Surprisingly Affordable Places

Bargain Alert! This Spring's Hottest Real Estate Markets Include Some Surprisingly Affordable Places

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With home prices spiraling upward along with mortgage interest rates, homebuyers across the U.S. are wondering where, if anywhere, they can afford a home—and the latest analysis from Realtor.com® points in some surprising new directions.

A ranking of March’s hottest markets shows that the traditionally in-demand East and West coasts have some new competition from the heart of the country: the Midwest.

Manchester, NH, continues its reign as the hottest market in March, topping the list for the 11th time in 12 months. Both Manchester and No. 2 on the list, neighboring Concord, NH, are within commuting distance and a cheaper alternative to nearby Boston, where median home prices reached a whopping $755,000 in March.

Yet below these no-brainers lurk some more surprising (and shockingly affordable) underdogs: La Crosse, WI, and Topeka, KS, came in third and fourth on the list respectively, closing in on New Hampshire’s heat streak. (Hotness rankings combine demand—measured by the number of unique views per home listing—and how quickly homes are selling in each area.)

“The March 2022 Hottest Housing list highlights the search for affordability, and places the spotlight on markets with solid local job markets and lower comparable prices,” says George Ratiu, manager of economic research for Realtor.com.

Where America’s affordable homes are hiding today

Situated on the western edge of the state, La Crosse is located along an important trade route, I-90, about halfway between Minneapolis and Milwaukee.

Getty Images / Moen & Teich

So why are homebuyers flocking to these unassuming Midwest markets? Because unlike expensive coastal areas, these markets offer home prices that are still a relative bargain. Although median home prices nationwide have risen 13.5% over the past year to $405,000, property prices in La Crosse remain modest at $300,000. Topeka’s cheaper still, at $195,000.

“Situated on the western edge of the state, La Crosse is located along an important trade route, I-90, about halfway between Minneapolis and Milwaukee,” says Ratiu. “With a median price for a home in the metro area at $300,000, it is not surprising that many buyers are looking at the market, including 37% who are seeking homes from out of state.”

That number rises to 40% of buyers viewing Topeka homes.

Indeed, half of March’s hottest markets have median listing prices below the current $405,000 benchmark. Plus, in-demand areas seem to be diversifying, with buyers showing renewed interest in smaller metropolitan areas within striking distance of larger cities.

“Buyers are looking at homes located a bit farther out to help combat today’s affordability challenges,” says Ali Wolf, chief economist at Zonda, a housing data and consultancy firm.

Why California real estate is losing ground

In Santa Cruz, California, median home prices hover at $1,263,000.

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Spring’s rising temperatures might also mean homebuyers are feeling less eager to pay through the roof for homes in warm, coastal areas. One perfect example of this is Santa Cruz, CA, where median home prices hover at $1,263,000. Despite high prices, this city reigned as No. 2 in January and February, but slipped to No. 18 by March.

“While people continue to be attracted to the state for jobs, lifestyle, and the wealth of outdoor attractions, the rising costs of living are driving many current residents to look at other states,” says Ratiu

It’s no wonder then that, in addition to the Midwest, Northeastern markets returned with a vengeance to the hotness list, claiming eight spots in the top 20.

The impact of rising mortgage rates on real estate markets

As mortgage rates go up, buying power goes down.

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One thing that’s possibly propelling the growth of more affordable Midwestern markets is rising mortgage rates.

In the past month, as rates have begun to shoot upward, many homebuyers, especially those in more affordable markets, have been feeling pressure to close the deal fast, and for a low price that they can still afford.

In March, average interest rates climbed to 4.72% for the week ending April 8, according to Freddie Mac. This is the highest level mortgage rates have seen since the onset of the COVID-19 pandemic.

“Economists expected mortgage rates to rise in 2022, but almost none expected them to rise as quickly and as high as we’ve [already] seen this year,” says Wolf. “As mortgage rates go up, buying power goes down.”

While homes nationally spend an average of 38 days on the market before selling, properties in the 20 hottest markets are getting snapped up in 25 days—eight days faster than last spring. Homes in Manchester, the hottest market of all, sold in a mere eight days on average.

In the Midwest, homebuyers will enjoy a more leisurely pace, albeit only slightly. Properties in La Crosse and Topeka remained on the market for a mere 14 and 17 days respectively.

All in all, spring might contain a few glimmers of hope but is slated to remain a tough market for homebuyers who will need to act fast and bid high.

“There’s a lot of demand and little inventory for the lowest-priced homes across the country,” says Wolf. “And the increased competition may only drive prices a bit higher in the short run.”

March’s hottest real estate markets

Hotness Rank Hottest Metros Hotness Rank YoY Median List Price
1 Manchester, NH 0 $462,000
2 Concord, NH 0 $427,000
3 La Crosse, WI 11 $300,000
4 Topeka, KN 5 $195,000
5 Burlington, NC -2 $350,000
6 Raleigh, NC 39 $449,000
7 Burlington, VT 108 $451,000
8 Worcester, CN 0 $440,000
9 Santa Maria, CA 20 $1,498,000
10 Rochester, NY -3 $220,000
11 Portland, MN 0 $520,000
12 Columbus, OH 5 $329,000
13 Johnson City, TN 0 $350,000
14 Springfield, MA 45 $325,000
15 Columbia, MO 7 $317,000
16 New Haven, CN 95 $355,000
17 Billings, MT 25 $483,000
18 Santa Cruz, CA 6 $1,263,000
19 Hickory, NC 41 $312,000
20 Boulder, CO 41 $798,000

The post Bargain Alert! This Spring’s Hottest Real Estate Markets Include Some Surprisingly Affordable Places appeared first on Real Estate News & Insights | realtor.com®.

A Big Ol’ Barndominium in Kentucky Is the Week’s Most Popular Home

A Big Ol' Barndominium in Kentucky Is the Week's Most Popular Home

Realtor.com

One of the hottest trends in the housing market caught everyone’s eye this week when it hit the market in Kentucky. The huge barndominium drew clicks from across the country, making it this week’s most popular home on Realtor.com®.

Sitting on 72 acres near the borders of Ohio and West Virginia, the four-bedroom residence likely charmed folks with its unusual locale. (Barndominiums are rarely found outside of Texas.)

In addition to that rustic residence, you also clicked on a wide range of intriguing properties for sale this week. They include an elegant Colonial in New Hampshire; a fully furnished, waterfront home up for auction; and an entire town in Colorado.

For a full look at the week’s 10 most popular homes, simply scroll on down.

10. 31 Summer Ln, Texarkana, TX

Price: $324,900
Why it’s here: 
This fabulous midcentury home on 1.5 acres has been fully renovated to offer the modern amenities today’s buyers want.

The three-bedroom house features exposed brick and beams inside. You’ll also find a large living space with a fireplace, vaulted ceiling, and a few built-ins.

Texarkana, TX

Realtor.com


9. 117 Station St, Coventry, RI

Price: $339,900
Why it’s here: 
Beyond its gorgeous exterior, you’d never know this beautifully remodeled home was built in 1900.

The three-bedroom Cape has been modernized over the years and now features a kitchen with new appliances and new flooring throughout. The living room with the pellet stove is ideal for relaxing, and the front porch and back patio allow you to soak in the views.

Coventry, RI

Realtor.com


8. 37 Baldwin Rd, Milford, NH

Price: $614,900
Why it’s here:
This four-bedroom Colonial offers luxury details, including elegant wainscoting and crown molding throughout.

Built in 1999, the home features a great room with a wood fireplace and vaulted ceiling. The spacious kitchen has a stone backsplash and an island with seating for four.  The sunroom features a vaulted pine ceiling and a sliding door that opens out to the 1-acre lot.

Milford, NH

Realtor.com


7. 854 Cunningham Ln, Cadiz, KY

Price: $700,000
Why it’s here:
This waterfront home comes with a private dock with a boatlift and horse facility. The 65-acre property, which also includes several barns, is set to go on the auction block in late April.

The home will be offered fully furnished. Luxury amenities include high-end appliances, an automatic entry gate, numerous fireplaces, an outdoor kitchen, a heated pool, an elevator, and a screened-in gazebo.

Cadiz, KY
Cadiz, KY

Realtor.com


6. 7111 Applewood Dr, Madison, WI

Price: $650,000
Why it’s here: 
This midcentury home in the woods is picture-perfect.

The four-bedroom, multilevel residence features a wall of windows in the living room and a sunroom with access to the exterior deck. The lower level has a wood-burning fireplace and access to the outdoor patio.

Madison, WI

Realtor.com


5. 2227 Enka Rd, White Pine, TN

Price: $650,000
Why it’s here: 
This four-bedroom home will soon hit the market. It offers Southern living at its best.

The country farmhouse features design and decor that have been featured on HGTV, Country Living magazine, Pottery Barn, and Crate and Barrel. Built in 1918, the residence has since been renovated and now features 2,026 square feet of living space.

White Pine, TN

Realtor.com


4. Colona Lot Land, Colona, CO

Price: $6,638,000
Why it’s here:
Less than an hour from Telluride, this 42-acre town has hit the market.

The historic offering includes nine rental homes, 12 residential lots, a 38-acre contiguous parcel, and other assorted buildings. But hungry buyer, beware: The tiny town’s restaurant and coffee shop are not included in the listing.

Colona, CO

Realtor.com


3. 2826 S. County Highway 395, Santa Rosa Beach, FL

Price: $1,095,000
Why it’s here: 
This tiny house with a huge price sits just steps from Seagrove Beach. Does the location justify the price tag? Time will tell.

The minuscule 196-square-foot studio comes with a bathroom with a refinished antique claw-foot bathtub. For more daring bathers, there’s an outdoor shower as well as a stock tank splash pool.

Santa Rosa Beach, FL

Realtor.com


2. 321 E. Bartlett St, Malakoff, TX

Price: $75,000
Why it’s here:
The listing photos show what happens to a home when it’s left unattended for decades. This 4,561-square-foot estate is now overrun with vines, climbing flora, and assorted greenery.

Built in 1930 from brick, concrete and steel, the Bartlett House was famous for hosting rooftop dances. Extensive renovations will be required before anyone can cut a rug in the house again.

Malakoff, TX

Realtor.com


1. 532 N. Happy Ridge Rd, Flatwoods, KY

Price: $1,300,00
Why it’s here:
This 4,000-square-foot barndominium on 72 acres features a beautiful country setting and a wide-open floor plan.

There’s a 28-foot vaulted ceiling in the great room and walnut cabinets in the custom kitchen. A first-floor primary suite features both a walk-in shower and a soaking tub.

The property includes a separate barn that’s equipped with water, electric, and propane gas. An enormous attached garage has six drive-through doors, a dog-washing station, and built-in storage.

Flatwoods, KY

Realtor.com

The post A Big Ol’ Barndominium in Kentucky Is the Week’s Most Popular Home appeared first on Real Estate News & Insights | realtor.com®.

This Is the Most Profitable Home Improvement—Can You Guess What It Is?

The Surprising, Most Profitable Improvement Homeowners Can Make

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The most profitable improvement homeowners can make to boost their resale value isn’t as sexy as a kitchen with marble counters and stainless-steel appliances, as practical as a dedicated home office, or as fun as a backyard pool or hot tub.

Instead, the work that pays off the most is refinishing or replacing the home’s hardwood floors, according to a recent remodeling impact report from the National Association of Realtors®. Homeowners recouped about 147% of their investment for refinished floors and 118% of what they spent on new flooring when they sold their homes.

“It looks beautiful in photos and more people are relying on technology to search for homes these days,” says Jessica Lautz, NAR’s vice president of research. “Wood flooring really feels more hygienic than having a carpet in your home. … And pet lovers and owners want hardwood floors for the ease to clean.”

The remodeling report was based on several surveys conducted by NAR, the National Association of Remodeling Industry, and HouseLogic.com between August and February. The surveys combined received about 6,200 responses. (To estimate costs, NARI members envisioned an average-sized home of 2,495 square feet built after 1981. The materials used were considered midrange.)

As the COVID-19 pandemic set in, Americans spent roughly $420 billion remodeling their homes in 2020, according to the report. While most of those projects would have happened regardless of the pandemic confining people to their homes, many homeowners got more ambitious and did larger projects. Or once they got started on renovations, those home improvement plans grew to encompass other parts of the home.

Folks remodeled to upgrade surfaces, finishes, and materials in their homes and to add features that could improve livability. The majority were happy with how the work came out, and more than half wouldn’t change a thing.

“People did get bored of their living spaces during the pandemic,” says Lautz. “If you’re spending nearly 24/7 at home, enjoying that revamped home brings a lot of happiness.”

Homeowners spent an estimated $3,400 on refinishing their hardwood floors—which earned them about $5,000 in resale value if they put their homes on the market. (The work estimates are from NARI, while the resale value estimates are from NAR.) They blew through about $5,500 on new hardwood flooring for a roughly $6,500 return.

Homeowners typically broke even on unflashy projects like insulation upgrades, replacing the roof, and garage doors.

As many were spending more time indoors with their families during the pandemic, adding more square footage to homes was also popular. But homeowners typically spent more on this extra space than they recouped when they sold their residences.

The next most profitable projects were converting basements into additional living spaces, putting in new closets, and turning attics into more living space. While folks did lose a bit of money on them, they had some of the highest cost recovery.

Bathroom and kitchen upgrades and adding new bathrooms and primary bedroom suites were also high on the list of projects that recouped the most value.

However, adding the extra space didn’t always result in boosting the home’s value by as much as the work cost. Adding a new primary bedroom suite cost about $172,500, but resulted in homeowners receiving only an additional $100,000 in the resale value of their homes. A new kitchen cost about $80,000 but tacked on only about $60,000 in value.

“What’s important to remember is a lot of people did this just for their own enjoyment,” says Lautz. “It’s very personal in how you would remodel a kitchen in all of the finishes you choose.”

The money spent on home improvements made many homeowners report that they felt happier. Painting the outside of a home or an interior room as well as adding additional space to a home, fixing the floors, and renovating closets brought homeowners the most joy, according to the report. And some of those projects didn’t require professionals.

“In some areas of the country, there were even shortages of paint because so many people were refreshing their space,” says Lautz. “If you can DIY a project during the weekend, a lot of people found joy in that.”

The post This Is the Most Profitable Home Improvement—Can You Guess What It Is? appeared first on Real Estate News & Insights | realtor.com®.

Homebuyers, Take Heart: Prices Could Flatten—or Even Dip—This Year

Homebuyers, Take Heart: Prices Could Flatten, Or Even Dip, This Year

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Nothing has been able to slow down soaring home prices lately—not even the highest inflation in 40 years. Will rocketing mortgage rates achieve what many dejected buyers and giddy sellers believe is impossible? Or will scores of first-time buyers continue to be priced out of homeownership?

Many homebuyers are hitting their financial limits just as the prime homebuying season kicks off this spring. Rising costs of just about everything are eating into down payment funds. Mortgage rates, which rose nearly a point and a half in the past year and are expected to keep going up throughout the year, are adding hundreds of dollars to the monthly payments of today’s buyers. And yet home prices just keep ratcheting up while the number of properties for sale continues to dwindle.

Today’s buyers are paying about 30% more for a house than they would have just a year ago when factoring in those higher sale prices and mortgage rates. That’s forcing many wannabe buyers to drop out of the market and put their dream of homeownership on hold as budgets can stretch only so far. Mortgage applications to purchase a home dropped 10.1% annually in the week ending March 25, according to the Mortgage Bankers Association.

Most real estate experts believe that higher mortgage rates will force price growth to slow down. While that would mean the end of double-digit increases, prices would continue to rise—just a bit slower. Some even believe prices might fall a little in the parts of the country where they rose the highest, pricing out locals.

“We’ve hit the ceiling for the housing market for a while,” says Mark Zandi, chief economist at Moody’s Analytics.

“The first thing to fall is going to be home sales. People just can’t afford to buy,” he says. “Then we’ll see price growth start to slow. Ultimately, I expect some price declines in some markets.”

The Federal Reserve Bank of Dallas set off alarm bells when it warned of signs of a brewing housing bubble as “purchases arising from a ‘fear of missing out’ can drive up prices and heighten expectations of strong house-price gains,” according to a recent paper.

Americans are worried about rising costs in all aspects of their daily lives. About 26% were struggling to pay their bills in February of this year, according to the March installment of the Capital One Marketplace Index. (The index looks at how the COVID-19 pandemic has affected Americans of different incomes over time.) Nearly half, 47%, report they are concerned about paying at least one bill next month.

That’s led nearly two-thirds, 62%, to say inflation has affected their spending, according to the index. Some of that is likely to spill over into the housing market.

“Homebuyers have to be able to afford their mortgage payments and all of the other things in their budget, [which is] getting harder to do,” says Realtor.com® Chief Economist Danielle Hale.

What will happen to home prices?

High mortgage rates haven’t pushed down prices, yet.

Prices might even rise, at least initially, as buyers race to lock in properties before they’re stuck with even higher rates. That could cause them to make even larger offers to win bidding wars, which in turn, inspire sellers to raise prices.

Nationally, median list prices were up 15.3% in the week ending March 26 compared with last year

However, many real estate experts predict the party might be coming to an end.

“We have learned from history that prices can fall,” notes Hale. “The more important question is if it’s going to happen right now. And that’s hard to say.”

With much higher mortgage rates, “housing is going to have to adjust. It’s unclear if that will mean falling prices or just slowing price growth,” says Hale.

Zandi believes prices will slow and even dip between 5% and 10% in the most overheated real estate markets.

“The declines are going to be in the parts of the country that got the most juiced up, like Boise, ID, and Phoenix, the Southeast and Florida, and over into Texas,” says Zandi. These are the places that locals are struggling to buy in, particularly as they compete against deep-pocketed investors.

“Those are markets that have seen the most stratospheric price gains, and that’s where we’ll see the most comeuppance,” says Zandi.

“The midtier markets may be the most affected as middle-class buyers are hurting from inflation and rising housing costs,” he adds. “The lower end of the market is likely to fare better as there just aren’t many affordable homes for sale. So those sales are expected to remain brisk.”

What could keep prices high and growing?

Before aspiring buyers get too excited, they should realize that there are forces at play likely to keep home prices high.

The biggest is the historic housing shortage. There are still many more would-be homeowners than there are homes for sale. Builders can’t get new homes up fast enough, a problem that’s been exacerbated by labor shortages, global supply chain delays, and local zoning laws. And there is more demand for housing as millennials have reached their peak homebuying years.

But despite all those interested buyers, sellers might be more reluctant to list their homes—leading to even fewer properties going on the market. That’s because most sellers are also buyers. And with home prices and mortgage rates higher, many won’t be able to afford to move up into larger, newer homes. Others might find it will cost them more to downsize into a smaller home than staying put.

“They don’t want to give up their juicy … mortgage rates that a lot of them refinanced into,” says Brad Hunter, president of the real estate consulting firm Hunter Housing Economists based in West Palm Beach, FL.

Those who do sell, and watched their neighbors receive windfalls for their properties, might refuse to settle for lower prices. They could pull their homes off the market if the bidding wars they’d dreamed of don’t materialize.

“Sellers get attached to a certain price they think [their homes] are worth,” says Hale. “It can take a while for sellers to get the message that a buyer isn’t willing to pay the asking price.”

In addition, there will always be some who can still afford the high prices.

Millennials “are starting to advance in their careers, moving up and making more money,” says Hunter. “Because they waited longer than previous generations to look for their first homes, they’ve been working and saving for [longer].”

Investors are also expected to keep prices high and prop up sales. It’s profitable to buy up properties and rent them out as rents are high and unlikely likely to slow down until more housing is built.

Plus, a wave of foreclosures, which would deal a blow to high prices, isn’t anticipated. It’s much harder to get a mortgage today than in the runup to the housing bust. Only the most qualified buyers, who are likely to be able to repay their mortgages, are granted loans. And the current job market is so strong that many homeowners struggling to make their mortgage payments might be able to find higher-paying work.

“It’s only when you start to see a lot of foreclosure sales that you start to see big price declines,” says Zandi.

Could a looming recession cause home prices to fall?

A recession, which some fear is on the horizon, could upend the market further. The U.S. Federal Reserve hiking interest rates in a bid to tame inflation and the war in Ukraine is causing some global instability. However, the nation still has a good shot of avoiding one altogether.

And the housing market should be able to weather it over the long term, particularly for most Americans who plan to spend the next few years in their homes. There is still a housing shortage and more interested buyers than sellers, the opposite of what happened during the Great Recession.

“Recession risks are high and they’re rising. [But] odds are the economy will navigate through,” says Zandi. “At the end of the day, the [housing] market is still tight. I don’t expect to see big declines anywhere.”

The post Homebuyers, Take Heart: Prices Could Flatten—or Even Dip—This Year appeared first on Real Estate News & Insights | realtor.com®.

Ditch the Bidding Wars! We’ve Found 10 Towns Where the Number of Homes for Sale Is Going Up

Data: Ditch the Bidding Wars! We've Found 10 Towns Where the Number of Homes for Sale Is Going Up

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Which of the following is the most challenging, seemingly intractable pain point faced by homebuyers in 2022?

A. Surreal home prices
B. Rising mortgage rates
C. Historically high rents
D. Bone-dry home inventory levels

The answer, of course, is all of the above! But D stands above the rest.

The available homes for sale in most parts of the country are at near-historic lows, greatly exacerbating bidding wars and ensuring a perpetual cycle of rising prices.

It’s déjà vu all over again. Homebuyers who grew so frustrated with the housing market last year that they sat it out, or who weren’t able to successfully snag a home, are finding themselves in a similar, if not worse, situation this year.

Spring is usually the time more sellers put their homes on the market. Instead, the number of homes for sale fell 19% in March compared with a year ago. While that’s less of a drop than the 25% decrease recorded last month, it’s a sign the housing market isn’t getting back to normal as quickly as economists had projected.

But wait! Not all markets are created equal. As homebuyers navigate this massive shortage of homes, the Realtor.com® data team set out to find the places in the U.S. where the number of homes coming onto the market is actually ticking up relative to the local population.

Yes, there’s a caveat: In this era of endemic housing shortages, everything is relative. So while there might be more homes for sale, it doesn’t mean they’re exactly plentiful. Homes in these places are still selling quickly, and prices remain high. (Nationally, the median list price was $405,000 in March, a 13.5% year-over-year increase—and a massive 26.5% jump from just two years ago.)

We found that places that experienced massive growth over the past couple of years often had more homes to go around. This might sound counterintuitive, but as these places saw an influx of remote workers over the past few years, builders rose to the challenge. They put up new homes at a rapid pace to meet demand, so new homes coming to market are offsetting the inventory problems most cities are experiencing.

“It’s important to keep numbers in perspective,” says Ali Wolf, chief economist at Zonda, a housing research firm. Even with “a big jump in listings [in these areas] compared to last year … overall inventory is still tight compared to pre-pandemic levels.”

To come up with our list, we looked at the number of new listings per 1,000 owner-occupied households in the 300 largest metropolitan areas in March. We narrowed our findings to one metro per state for geographic diversity. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

So where could buyers get some relief this spring? Let’s take a look.

10 Towns Where the Number of Homes for Sale Is Going Up
The Realtor.com data team set out to find the places in the U.S. where the number of homes coming onto the market is ticking up relative to the local population.

Realtor.com

1. Panama City, FL

real estate listings in panama city florida
Panama City Beach, FL

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Median list price in March: $446,000
New listings per capita: 10.55

After experiencing massive damage from Hurricane Michael in 2018, homebuilders rebuilt devastated neighborhoods and added new developments in this Florida Panhandle city. Big builders like D.R. Horton have invested here, while a local builder recently announced a planned community of 1,600 homes in Panama City Beach.

At the same time, as home prices increase, buyers who scooped up beachfront properties in the past couple of years are starting to see dollar signs, says Sean Casilli, a Realtor® with Coldwell Banker Residential Real Estate in Panama City Beach.

“People that bought even a year ago are seeing sometimes 30% to 50% appreciation on a unit they bought in a condo [building] and they’re like, ‘well, I don’t know if the market’s going to stay like this so I’ll take my short-term capital gains and run,’” Casilli says.

One example: A newly built three-bedroom townhome that sold for $209,900 in 2020 was just listed for $374,000.

2. Daphne, AL

Daphne, AL

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Median list price in March: $387,400
New listings per capita: 9.87

Located across the bay and less than 20 minutes from Mobile, AL, Daphne was recently named a “hidden gem” by the National Association of Realtors®. People who work in the city but want more room to spread out are choosing to live here, while retirees are attracted to its prime location on the shoreline of Mobile Bay and low cost of living.

A cute, recently updated three-bedroom home on a golf course is on the market for $259,990.

And because of an abundance of flat, cheap land, homebuilders have been meeting demand. They’ve been putting up homes over the past five years or so, building out entire subdivisions in the course of a year.

3. Myrtle Beach, SC

Myrtle Beach, SC

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Median list price in March: $343,000
New listings per capita: 9.62

This coastal city with 60 miles of prime shoreline has experienced a construction boom in recent years to keep up with all the people moving here. Builders have been putting up condos, townhomes, and single-family homes at a rapid pace in this golf and beach mecca.

During the COVID-19 pandemic, growth accelerated as a throng of people who could suddenly work from anywhere decided to do so from the beach. (Who can blame ’em?)

Second-home owners are attracted to the practically year-round warm weather while out-of-staters are attracted to the low taxes and more subdued, Southern lifestyle.

A four-bedroom home away from the beach built just a couple of years ago is listed for $380,000.

4. Jacksonville, NC

real estate listings in jacksonville north carolina
Jacksonville, NC

Photo courtesy of jacksonvillenc.gov

Median list price in March: $268,600
New listings per capita: 9.04

Another affordable beach area, the Jacksonville metro has long been an attractive option for second-home buyers. It’s two hours southeast of Raleigh and has a beach season that stretches from late March through early October.

It also has a big military presence, as it’s home to Marine Corps Base Camp Lejeune. A steady stream of incoming buyers makes Jacksonville an attractive place for builders, and new builds are continuing to come on the market throughout Onslow County,

“Developers are still targeting [military towns] because they see them as a good solid-growth opportunity,” says George Ratiu, manager of economic research at Realtor.com.

Lots of cheap land is also part of the appeal, and the new builds offer buyers plenty of options, including this sprawling four-bedroom home built in 2019 and on the market for just $279,900.

5. Iowa City, IA

Iowa City Iowa
Iowa City, IA

Photo courtesy of The Boller Family at ouriowaheritage.com

Median list price in March: $307,000
New listings per capita: 7.43

With comparatively low home prices and its location near the University of Iowa, Iowa City has been a popular market for first-time homebuyers. Some students decide to stay after graduation thanks to the plentiful job opportunities, and they are attracted to walkable neighborhoods near downtown.

But prices have risen here year over year, and many young sellers are looking to cash in, says Julie Dancer, a Realtor.

“It’s an opportunity for a lot of people to chase another dream, free themselves up, and know they have a wad of cash to dump into their retirement as a young person,” says Dancer, who’s with Lepic-Kroeger Realtors®.

A steady stream of new builds means there are more homes on the market compared with other places in the country, easing the inventory squeeze a bit. A three-bedroom townhome within walking distance to shops and restaurants was just listed for $336,000. But there are still too few homes for everyone that wants them.

“Last year was very difficult, this year is even more difficult,” Dancer says.

6. Macon, GA

Macon, GA

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Median list price in March: $200,495
New listings per capita: 7.25

A 90-minute drive from Atlanta, Macon is filled with sprawling subdivisions where homes are about half the price buyers would pay in A-Town.

That’s not to say Macon doesn’t have its own arts scene and things to do. The downtown has experienced an economic upswing, with high-end restaurants filling empty storefronts. It’s also home to Mercer University, which keeps the area busy with sporting events and film festivals throughout the school year.

Like much of the rest of the South, Macon had experienced a pre-pandemic building boom, which has continued through today. Three- and four-bedroom homes with walk-in closets have been going up at warp speed, including this four-bedroom, 2019 build with new updates on the market for under $250,000.

7. East Stroudsburg, PA

East Stroudsburg, PA

Courtesy of grandleisuretravel.com

Median list price in March: $297,300
New listings per capita: 6.2

The Poconos, as the larger region is called, has long been a popular escape for city dwellers in New York City and Philadelphia. However, the local economy has struggled, resulting in higher unemployment (7.2% in January) than the national average. That’s resulted in less demand for housing.

Plus, some white-collar workers who decided to live there full time are now starting to return to the office. The long commutes are causing them to consider leaving, which is freeing up more housing stock.

“We are seeing a much more determined push toward a return to the office,” says Ratiu, the manager of economic research. “Which may end up with a lot of homeowners realizing a three-hour drive from the office might not be feasible.”

At the same time, longtime residents are being squeezed by the economic downturn. Last year, the Pennsylvania State System of Higher Education announced plans to consolidate six campuses after a drop in enrollment. While that did not include East Stroudsburg University, the school saw the biggest drop in new students, according to an analysis by the Philadelphia Inquirer. And in February, FedEx closed an operations center in nearby Tobyhanna, laying off 200 workers.

Many buyers choose homes they can both live in and rent out, and with four seasons of activities, they can make a good profit. There’s not a ton of new construction here, but a three-bedroom new build in a community that allows short-term rentals is on the market for $365,900.

8. Greeley, CO

Greeley, CO

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Median list price in March: $484,700
New listings per capita: 6.17

A little over an hour north of Denver, Greeley has been declared the next suburb of the Mile High City. As people begin to get priced out of the state capital, they’re looking for cheaper options elsewhere.

Local officials have gone all-in on building up the city over the past few years, with master-planned communities going up pretty much everywhere. A three-bedroom home that’s yet to be built is priced at $469,976.

9. Boise, ID

boise idaho real estate listings
Boise, ID

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Median list price in March: $563,600
New listings per capita: 5.91

Boise has been no stranger to our top markets list, with West Coasters and others flocking here throughout the pandemic, drawn by activities like hiking, skiing, and whitewater rafting. Boise also offers big-city amenities like a thriving food and arts scene.

While agriculture is still a dominant industry here, the tech sector is growing, with companies like HP Inc. and Micron Technology setting up shop. That’s attracting a lot of millennials and Gen X workers, but retirees are also drawn to the comparatively lower home prices.

Homebuilders have been putting up more homes in the Boise area to meet demand. A two-story townhome built just this year recently dropped in price to $378,990,

10. Atlantic City, NJ

real estate listings in atlantic city new jersey
Atlantic City, NJ

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Median list price in March: $292,500
New listings per capita: 5.89

Long known for its shuttered casinos and high unemployment, Atlantic City has been making a comeback, with investors and homeowners alike attracted to killer real estate deals on some of the widest beaches in the Northeast.

Ninety minutes from Philadelphia and 2.5 hours from New York City, Atlantic City teems with tourists during the summer, so savvy buyers have been scooping up properties to flip (as well as rent out). Those properties are starting to hit the market, while sellers looking to downsize are listing their homes ahead of the peak homebuying season. New construction in Egg Harbor Township, located off the shore, is also starting to come online, easing supply issues.

For those looking to enjoy the beach, new listings have been popping up in Atlantic City proper and Avalon, NJ, says Mary Lou Ferry Wimmer, a real estate agent with Farley and Ferry Realty. Homes there can get expensive. For example, this renovated two-bedroom cottage near the water is on the market for $1.5 million.

Still, these homes are moving quickly and a lot of times with all-cash offers. That means sellers can get top dollar for their property if they decide to list.

“It’s really an opportunity for sellers that have been sitting on the fence,” Wimmer says.

The post Ditch the Bidding Wars! We’ve Found 10 Towns Where the Number of Homes for Sale Is Going Up appeared first on Real Estate News & Insights | realtor.com®.

‘Mortgages Are Complicated Instruments’: Should Home Buyers Be Worried About a Yield Curve Inversion? Economists Say Keep Your Eyes Open for These Signals.

Should home buyers be worried about a yield curve inversion

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For a moment this week, the bond market flashed a signal that some associate with impending recessions. Home buyers need not worry just yet, according to economists.

On Tuesday, the 2-year Treasury note’s yield briefly rose above the yield on the 10-year Treasury note, in what is called an inversion of the yield curve, a relatively rare occurrence. Typically, long-term bonds like the 10-year Treasury carry longer interest rates, or yields, than short-term bonds.

Market experts note that while yield-curve inversions are strong economic indicators that can signal the risk of a potential recession, they don’t tell investors definitively when an economic downturn is likely to come.

As Barron’s noted, an inverted yield curve is a predictor of a recession only when it remains inverted for more than a week. What’s more, a 2018 paper from the Federal Reserve Bank of San Francisco noted that the time between the inversion and subsequent recession varied between 6 and 24 months.

“So when 2-year yields rise above 10-year yields, market watchers can comfortably conclude just one thing: Investors expect interest rates and/or inflation to be higher in 2 years than in 10 years,” Barron’s noted.

‘The expected life of a mortgage changes as interest rates change.’

Michael Fratantoni, chief economist at the Mortgage Bankers Association.

As for the impact to the mortgage and housing markets, it’s even less clear. “Mortgages are complicated instruments,” said Michael Fratantoni, chief economist at the Mortgage Bankers Association.

Most home loans originated in this country take the form of 30-year, fixed-rate mortgages. Lenders take their cues when it comes to setting the interest rates on these loans from the long-term bond market, among other signals. Lenders also responded to investor interest, since most mortgages are sold off. Those sales produce the liquidity needed to offer even more loans.

But the relationship between long-term debt and mortgage rates isn’t clear cut.

“A 30-year mortgage is freely payable at any time,” Fratantoni said. “So from the perspective of an investor, that means it’s complicated because the expected life of a mortgage changes as interest rates change.”

In particular, when rates fall as they did in 2020 and 2021, mortgage borrowers are likely to refinance and take out a new loan to lock in a lower interest rate, which then wipes out their old loan. Over the past few years, consequently, “mortgages were, in effect, a shorter term investment,” Fratantoni said.

Yield curve inversions used to be a bigger deal

This isn’t to say that yield-curve inversions haven’t ever had an impact on mortgage rates.

In the past, adjustable-rate mortgages, or ARMs, were a more popular product. When that was the case, these fluctuations in the bond market could have a pretty big impact on consumers’ decision-making.

The benefits of an adjustable-rate mortgage were derived from the steepness of the yield curve, said Tendayi Kapfidze, chief economist at U.S. Bank. “ARMs would have lower interest rates than the fixed mortgage rates, which were priced off of the longer end of the curve,” he said.

Today, fewer people choose to take out ARMs—a byproduct of the last housing crisis when many homeowners were burned by adjustable-rate mortgages. If those loans were still popular, however, “A flattening yield curve would essentially mean that ARMs are less attractive, and people would shift from ARMs into more fixed-rate mortgages,” Kapfidze said.

Pay attention to the Fed’s balance sheet

The yield curve’s brief inversion this week comes less than a month after the Federal Reserve moved to hike interest rates. Mortgage rates had already surged in anticipation of that rate increase, and have only continued to climb ever since.

But the Federal Reserve’s direct manipulation of interest rates isn’t the only way the central bank is influencing mortgage rates.

The Fed also has a balance sheet of assets it purchased during the first two years of the pandemic, in a bid to boost the economy. It has since stopped making those purchases, and economists expect the central bank eventually will let those assets mature off its balance sheet—meaning it wouldn’t replace any of the assets it’s holding for the foreseeable future.

Among the assets the Fed bought during that time were mortgage-backed securities. This helped to drive a great deal of liquidity into the mortgage market, which allowed lenders to cut rates to the record lows that were seen.

“It is tough to estimate just how impactful the Feds purchases of treasuries and MBS have been on longer term rates, but they’ve certainly had an impact,” Frantantoni said. Without the Fed actively in the market as a buyer of mortgage-backed securities, it will become clear in time how much influence the central bank had based on the subsequent changes in mortgage rates, he added.

At the same time, because the Fed also has sway with long-term rates, mortgage lenders may not be too worried about the yield curve’s recent signal in terms of the rates they offer.

Will mortgage availability suffer?

While an inversion of the yield curve may not have a direct impact on mortgage rates, it can prompt lenders to be stingier.

In the past, yield-curve inversions have been associated with a tightening of credit. “If it costs more to borrow short term than what you’re going to earn by lending long term, you’re going to do less lending,” said Greg McBride, chief financial analyst at Bankrate.com.

The yield curve, in this way, can be something of a “self-fulfilling prophecy” insofar as it relates to recessions, McBride said. That’s because consumers have fewer options when credit is tight, producing ripple effects throughout the economy.

But economists suggested that mortgage applicants may not see greater difficulty getting a loan as a result of this latest signal. At the start of the pandemic, mortgage lenders were quick to tighten credit due to concerns about the state of the economy. Since then, they’ve been slow to loosen it back up—and because of the strong demand they have seen from home buyers and people looking to refinance until now, they haven’t had much need to do so.

“I don’t see anybody tightening in response” to the latest recessionary signal yet, Fratantoni said. “Obviously, that could happen down the road.”

The post ‘Mortgages Are Complicated Instruments’: Should Home Buyers Be Worried About a Yield Curve Inversion? Economists Say Keep Your Eyes Open for These Signals. appeared first on Real Estate News & Insights | realtor.com®.

Betty White’s Beloved California Sanctuary Is the Week’s Most Popular Home

most popular homes in real estate this week

Realtor.com

“Golden Girls” star Betty White left behind a legacy of laughter and love. The actress also owned some serious real estate before her passing on the last day of 2021.

The Emmy winner’s oceanfront home in Carmel, CA, recently landed on the market for $7,950,000. And thanks to White’s status as a national treasure, her coastal getaway racked up tens of thousands of clicks. It earned the title of the week’s most popular home on Realtor.com®.

White and husband Allen Ludden, a game-show host, bought the vacant property in 1978 for just $170,000. Their custom-designed home was completed in 1981, but Ludden died before they could enjoy their masterpiece together. White treasured the gorgeous retreat for the rest of her life.

The other properties drawing the most clicks this week were a bit more modest. They include a modernized farmhouse in Indiana, a purple-inspired home in Maine that would make Prince proud, and an award-winning Nebraska home with a plexiglass tunnel to the garage.

For a full look at this week’s 10 most popular homes, simply scroll on down.

10. 328 S. Wolf Rd, Columbia City, IN

Price: $549,900
Why it’s here: This four-bedroom farmhouse comes with a detached in-law suite, a three-car garage, and a private pond. It sits on a 2.5-acre lot.

This 1856 home has been entirely modernized and renovated. Updates include a wainscoted foyer, a dining nook with built-in seating, and a stylish kitchen with concrete counters.

Columbia City, IN

Realtor.com


9. 117 Station St, Coventry, RI

Price: $339,900
Why it’s here: This 1900 New England Cape is decked out with all sorts of modern finishes.

The open floor plan of this four-bedroom home includes a primary suite on the first floor and three additional bedrooms upstairs. The spacious front porch allows you to take in the views, while the back patio is ideal for some private family time.

But buyer, beware: The sale of this home is contingent on the seller finding suitable housing.

Coventry, RI

Realtor.com


8. 4 Martin Ln, York, ME

Price: $499,000
Why it’s here:
A tribute to Prince in the far northeast? The late musical genius would be proud of this homeowner’s passion for all things purple.

From the back deck to the kitchen cabinets of this three-bedroom home, all shades of purple reign supreme. Located just six minutes from York Beach, the property has also housed a hair salon business.

York, ME

Realtor.com


7. 1919 W. Douglas Ave, Wichita, KS

Price: $287,000
Why it’s here: This gorgeous gem in the Midwest is known as the Guldner House, and it’s listed on the National Register of Historic Places.

Built in 1910, this Victorian comes with three bedrooms, an oversized garage/carriage house with loft, and a newly constructed outbuilding with a toilet and sink. Original details include the carved woodwork, pillars, wainscoting, and two stairways.

Wichita, KS

Realtor.com


6. 129 Silvertree Crossing, Madison, MS

Price: $340,000
Why it’s here: This sweet four-bedroom home on a corner lot features a two-story family room with a stone fireplace.

There is a front porch for enjoying your morning coffee, and out back is a covered porch for sipping your evening cocktail. The grand primary suite includes a bath with double vanities, a separate shower with bench, a whirlpool tub, and a private water closet.

Madison, MS

Realtor.com


5. 913 S. Adams St, Junction City, KS

Price: $172,500
Why it’s here: It’s an ultra-affordable midcentury classic. Located in the heart of downtown, the home measures nearly 3,000 square feet.

As reflected in the price, the four-bedroom home will need some updates. But the bones are enticing, including a family room with a wall of windows and a lower-level bar ideal for entertaining.

Junction City, KS

Realtor.com


4. 5333 Raven Oaks Dr, Omaha, NE

Price: $425,000
Why it’s here: This award-winning home features a plexiglass tunnel to the garage and an abundance of windows to let in the natural light.

Built in 1977, the residence is centered around a two-story cedar family room with a wood-burning fireplace. The stunning design of this 2,069-square-foot home includes a loft-style second floor, and three bedrooms—each with its own private balcony.

Omaha, NE

Realtor.com


3. 523 Devils Nose Rd, Rogersville, TN

Price: $299,900
Why it’s here: This rustic two-bedroom log cabin comes with 18 acres. Originally built in 1838, the wooden structure was moved to its current foundation in the late 1970s.

While it lacks a permanent source of heat, air conditioning, and laundry hookups, it offers an abundance of natural beauty.

Rogersville, TN

Realtor.com


2. 78 Grandview Blvd, Reading, PA

Price: $999,900
Why it’s here: This Georgian Colonial was built in 1929 and offers three stories of luxury. The 3,500 square feet of living space include five bedrooms.

Elegant touches include a covered front entry, front-to-back foyer, and formal dining room with decorative molding. The living room has two sets of French doors that open to the covered side patio. The chef’s kitchen has a marble island, commercial-grade Viking range, and double ovens.

Reading, PA

Realtor.com


1. 2625 Ribera Rd, Carmel, CA

Price: $7,950,000
Why it’s here: Betty White‘s beloved oceanfront home is a lovely getaway fit for a Golden Girl.

Built in 1981, the four-bedroom home has three floors—all with outdoor decks. Nearly every room in the home offers ocean views. The quarter-acre lot on this coveted stretch of California coast offers the utmost privacy.

If you’re interested, be prepared to tour the place in person. Offers will be accepted only from folks who show up to see the property, according to the listing agent.

Carmel, CA

Realtor.com

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