Home trends change from year to year, but overall, home ownership is a beautiful thing. You have a place to call your own while building up equity in your investment. And there’s also something about owning your home yourself rather than renting it from someone else. Investing in your home most likely will bring a great return, so the following are a few tips from the pros as you look at what your home needs next.
- Getting back to nature
The down-to-earth vibe is here to stay for a while. Designers and homeowners are loving the clean, Nordic design look cozied up with natural pine flooring and furnishings, soft textures like shearling, hides and fur with the occasional pop of color. Dark shades of green (as in, deep jungle, forest and olive tones) and nuances of ocean hues (blue-green, lime, jade, and cobalt)are on the horizon as some of the top color trends for the coming year. Of course, strategically placed indoor plants (trend alert: olive plants and trees!) lend a touch of green to enliven a space.
- Dedicated, technology-free space in floor plans
As open concept design and technology evolve, homeowners are increasingly looking for a small place to escape to where technology is absent. A bedroom nook, library or entry alcove along with warm, enveloping furnishings provides the perfect retreat from the barrage of screen information most homeowners face daily. Early in the design process is the best time to nail down exactly where and how to carve out a peaceful sanctuary within your home.
- Natural Textures
For furniture design, cane, rattan and abaca have been reinvented with a modern flair. Cork, a fast-growing and renewable resource, is emerging as a strong sound buffer for the pervasive open floor plan. Think a side or coffee table, stool or even an entire wall in a home office. Cork’s warmth and renewability make it a top choice for 2017 homeowners. Terra cotta tiles are also on the upswing with a new matte finish that stays away from the rustic feel of previous years. Look for terra cotta to influence fireplace surround design and bathroom design.
- Art-inspired wallpaper
After years of removing wallpaper, homeowners and designers are now considering its many benefits. In addition to many up-and-coming designs in today’s marketplace, artists can now turn their work into wallpaper murals by enlarging their art to a grand scale. Area Environments is one such studio that has seen a rise in demand for art-inspired wallpaper and creates impressive wallscapes.
- Black as a staple kitchen design element
White as a preferred design element is slowly being upstaged by its direct opposite. Black cabinets, countertops, appliances and more are coming into their own as designers seek a warmer, sleeker silhouette. As the perfect foil for metals, plants and colorful food, black seems to be coming into its own. If homeowners aren’t sure about a full-on black kitchen, dark gray and strategically designed black and white layouts are growing in popularity worldwide.
- Fair realtor fees
Too often realtors are given their set fees automatically without any direct correlation to the quality of service they have provided. With housing prices possibly leveling off in late 2017, homeowners who are considering selling need to get top dollar without costly realtor fees. A popular option is a flat fee MLS listing service. Basically, this is a real estate broker offering to list the property for a flat fee rather than a percentage of the sale price. There are some additional details to consider before deciding if this option is the right one for you, but typically a successful property sale in this scenario results in a seller saving half of the traditional commission and retaining the right to sell on his or her own.
Your home is typically one of your biggest investment over your lifetime. Make it a great space to retreat to, play in and even sell when the time is right.
Real Estate is one business that has stayed somewhat steady in the extremely fast-paced and constantly changing world of the 21st century. That doesn’t mean that real estate doesn’t change and doesn’t have trends that work their way into the mainstream, however. It is always important to understand trends as an investor. One of the most important factors in a good investor is their ability to identify trends before everyone else and capitalize on those trends. So what will be trending in 2017? How about 2025? Here are a few things that could make the list.
Home automation
Home automation is something that some believe is currently trendy, but most would argue that it hasn’t hit the mainstream yet. Many homeowners own a smart TV, or Kinect, or perhaps an alarm system, but most couldn’t say that their home has been fully automated. Neither is there a single company, or even a few, that are owning the industry.
That will likely change in coming years. As home automation technology becomes more mainstream people will begin to develop habits that make the think they cannot live without certain home automation aspects. These will in turn spur further pushes by companies into the home automation sphere, and someday soon many people will be living in a world they once only saw on TV, where you can speak to your home and it is ALWAYS listening.
Electricity
The electric industry has remained fairly constant for as long as most people can remember. Just look at the power lines out your window and you will easily be able to see how long it has been since any updates have been made. All of that is changing with emerging technologies.
The solar industry is set to be the biggest disruptor. Multiple solar companies have gone public in the last few years and are using the funds to rapidly expand into emerging markets. Vivint Solar, a Utah based company that went public two years ago has reported more than 100% sales growth multiple quarters since the offering. They have found a wiling market that is hungry for cheap, renewable, safe electricity.
This in turn has powered companies like Tesla to release batteries that are capable of storing enough electricity to power an entire home. Combing solar technology with battery technology will allow homes of the future to go completely off the grid, with no need to rely on electric companies for their basic needs. This means no more power outages, no more downed power lines, and cheaper electric bills.
Already many properties are seeing watt-hour meter’s get installed that allow for landlords to measure exact electric usage and charge based on the amount they use. This will also be utilized more as the industry grows, allowing (or forcing) people to only pay for the electricity they use, while also giving people a better idea of how much electricity their family uses each month.
Small homes
A strange new trend that many analysts probably never thought would come is the less-is-more philosophy. Many analysts are seeing trends that point to significantly smaller homes being built. Home s are being built to match currently family needs, and space is being utilized in a much more efficient manner. Many homes that are being built are significantly smaller than homes nearby, yet seem bigger with space utilization techniques and good storage.
These are just a few trends. All can benefit a savvy investor who knows what to look for and can spot a deal. Remember, do your research and good things will almost always follow!
Some banks show an uptick, but often, the loans are harder to get.
Seeking money for a pressing need or unexpected expense? A TV commercial airing these days from U.S. Bank suggests a solution: A home equity line of credit.
The spot may be reminiscent of the housing bubble for some, but it also represents a sign of the recovery.
“A small fraction of banks are actually reporting they’re seeing stronger demands for home equity lines of credit over the last 3 months,’’ says Keith Leggett, vice president and senior economist at the American Bankers Association.
“The lenders are still going to be cautious, but the fact that you are seeing lenders actually tip toe back into that water is an indication that the housing market has probably stabilized and is actually beginning to recover,” he says. “Lenders would not be going into this market if they viewed (that) housing prices were scheduled to drop further.”
ComericA bank says it’s seen an increase in home equity lines of credit in Orange County. The bank had a 55 percent rise in applications for them as of mid-October this year compared with the full year 2011, and a 36 percent increase in money taken out by borrowers, bank spokeswoman Nancy Tovar Huxen said. There was a 74 percent jump in home equity credit applications in September year to date over the same period ending September 2011, and a 68 percent increase in money taken out.
BOOM VS. BUST
During the housing bubble, many homeowners used their home like ATMs. Income documentation and a healthy amount of collateral often were not deemed necessary. Home prices were soaring.
But since the crash, the rules for such credit, as with other types of loans, have tightened significantly.
“They’re being very careful about who they’re giving that loan to,’’ says Houtan Hormozian of the Orange County Association of Mortgage Professionals. “Banks definitely don’t give them out like they used to.’’
Now homeowners typically need a 720 FICO score, at least 20 percent equity in the home, and documentation of income and mortgage payment stability, mortgage brokers say. And home equity lines of credit don’t come cheap: Average fixed interest rates were 6.68 percent as of Oct. 5, down from 7.06 percent a year ago, according to HSH Associates, which collects data on the mortgage market.
So who qualifies for a HELOC nowadays?
U.S. Bank officials say though the bank’s commercial is airing now, their careful lending practices haven’t significantly changed, and that the bank continued to give out home equity lines of credit even after the housing crash.
“It’s really for the crème de la crème,’’ says Dave Haub, president of CMC Lending in Garden Grove, of typical guidelines for the loans. “There’s not a lot of people who have the equity. It’s almost for the people who really don’t need it.”
PAYING IT BACK
But borrowers who took out home equity lines of credit in the past could face trouble ahead. In a couple of years, more than half of these loans will begin amortizing.
http://www.ocregister.com/articles/equity-374913-home-days.html
The Federal Housing Administration is making it easier for once-struggling homeowners to qualify for a mortgage backed by the agency.
For borrowers who meet certain requirements, the FHA is trimming to one year the amount of time that homebuyers must wait after a bankruptcy, foreclosure or short sale before they may qualify for a FHA-backed mortgage.
The waiting period had been two years after the completion of a bankruptcy and three years after a foreclosure or a short sale.
But only certain consumers who’ve been in those circumstances will be able to meet the criteria attached to the eased restrictions. Borrowers must be able to show their household income fell by 20 percent or more for at least six months and was tied to unemployment or another event beyond their control. They also must prove they have had at least one hour of approved housing counseling and, among other things, have had 12 months of on-time housing payments.
“FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage,” said FHA Commissioner Carol Galante, in a letter to mortgagees announcing the changes.
FHA-backed mortgages are a popular option for first-time buyers and for consumers with lower credit scores who might not otherwise qualify for a loan backed by Fannie Mae or Freddie Mac. However, the agency has recently increased the fees tied to FHA-backed loans.
Some people may say yes!
Upward sloping yield curve. It’s important to understand that due to the time value of money and inflation, the longer you borrow the higher your interest rate. If you borrow money from me today to pay me back tomorrow, I won’t charge you interest. But, if you want to borrow money from me today, to pay back over the next 30 years, you better hell believe I’m going to charge you an interest rate above inflation to counteract inflation, make some money, and bake in some risk of default.
Average length of stay. First of all, the average duration one lives in and owns a home is 7 years. If that’s the case, what on earth are you doing borrowing a 30-year fixed rate mortgage for? A 23 year + overestimation of ownership is a serious miscalculation based on the statistics at hand. With a 5/1 ARM, your underestimation is only 2 years, but you already have baked that in.
Match fixed rate with length of stay. If you plan to live in your house for 10 years, take out a 10 year fixed rate (amortizing over 30 years) as the most conservative loan duration. A 10 year fixed rate is cheaper than a 20 year or 30 year fixed rate. It is only logical that you match your mortgage fixed rate with your expected duration of stay. Sure, you might stay longer, but you might also stay shorter as well. If you know you plan to stay in your house forever, it’s more justifiable to take out a 30-year fixed, but I still wouldn’t because 1) You will likely pay down your loan faster than 30 years, and 2) The spreads are unjustly high in this environment.
Adjustable rate loans have an interest rate cap. People think, thanks to fear mongering by the media and mortgage officers, that once the adjustable rate loan period is over, your mortgage rate will skyrocket and make things super unaffordable. This is not the case because everything is relative and rates are capped. I’m refinancing to a 5/1 ARM at 2.625% with all fees included, and after 5 years, the interest rate can reset one time to a maximum of 7.25%. Whoopdee doo! After 5 years, if I don’t pay any extra principal, my principal mortgage amount is about 10% less. A 7.25% mortgage rate on a 10% lower principal amount is very digest-able.
If rates rocket higher, you will be celebrating. Things don’t happen in a vacuum. The 10-year yield is a reflection of inflation expectations. If the 10-year yield, and therefore mortgage rates are skyrocketing, that means inflation expectations are at the very least skyrocketing. However, you don’t have inflation expectations going higher unless demand for real goods and services going higher. Higher demand is a reflection of a stronger economy, and your real assets (property), by very definition or inflating! So what if inflation rises from 2% to 5%, causing your mortgage to reset to 7% due to the 2% spread? If your home is now inflating by 5%, and you have a 80% loan-to-value ratio, your cash on cash return is going up by 25%!
0 years in a row of deflation. Look at the historical 10-year treasury yield. Rates have gone down for 30 years in a row. That’s right folks. THIRTY YEARS! Are you telling me there’s no trend here? Are you saying that we are going to see massive inflation spikes on the way (which are fine as I just wrote) all of a sudden? In these 30 years, we’ve become a much more efficient society who enacts monetary and fiscal policy in anticipation or with shorter lead times. Yes, there will be occasional upward blips in pricing, but I highly doubt there will be a 5-10 year continuous ramp in inflation, which means your 5-10 year ARM is just fine.
