Tiny homes, overseas investors and home values at pre-recession levels.
Tiny Houses come with Big Problems
When Tom Alsani heard about plans for a tiny-home community in St. Petersburg, Fla., he got so excited he immediately wanted to know more.
“Right now I have a house with three bedrooms, but the kids are gone and I’m trying to downsize,” says Alsani, a quality-control inspector for furniture companies. “To me, a tiny house is very, very attractive. It’s a state of mind; it’s not about how big you have it but the level of contentment and happiness.”
Few housing options have captured the public imagination like tiny houses, seen as an affordable and, yes, adorable antidote to the excesses of modern life. Their appeal is wide—to empty nesters like Alsani, soon to be retired and living on Social Security, to millennials, too burdened with student loan debt to buy a normal-size house, and to vagabonds at heart who like the idea of packing up and hitting the road at a moment’s notice.
But for all the enthusiasm, the tiny house movement isn’t moving very fast. Financing, zoning laws and entrenched attitudes have conspired to limit tiny houses to a tiny percentage of the nation’s housing stock.
“With tiny homes, because it has a new name and is not called an RV or a mobile home, people don’t know how to treat it,” says Preston Melson, a partner in a St. Petersburg company that makes tiny houses.
Today, though, “tiny house” typically means a dwelling of 400 square feet or less on wheels. While the mobility is attractive, it has impeded the widespread acceptance of tiny homes.
Legally, wheeled houses are considered recreational vehicles and are generally restricted to RV parks by county and municipal zoning laws. Many so-called “tiny homers” don’t want to live in RV parks, however, because they cater primarily to vacationers, not permanent residents.
Owners who don’t plan to move their tiny homes can build them as permanent structures on vacant land where zoning permits; thus, the challenge of tiny houses “is where to put them,” Melson says. “That’s the No. 1 enemy.”
Paying for tiny houses is getting easier. Since 2013, SunTrust’s LightStream division has offered tiny-home loans—actually, personal, non-secured loans of up to $100,000—for as long as seven years. Interest rates range from 4.04 percent to 11.04 percent, depending on the borrower’s credit history. (The minimum score is 660, and the applicant must have some assets like a 401(k) or stock.)
Though it has fewer borrowers than for car and home improvement loans, the market for tiny-home loans “punches above its weight,” says Julie Olian, LightStream’s vice president of Public Relations. “Our portfolio has grown as the market has increased. It’s a great way to get a first home and it’s one that’s flexible in terms of where it is [located].”
©2018 Tampa Bay Times (St. Petersburg, Fla.) Distributed by Tribune Content Agency, LLC
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Are we starting to see the Foreign Investment Slow Down?
“After a surge in 2017, we saw a decrease in foreign activity in the housing market in the latest year, bringing us closer to the levels seen in 2016,” says Lawrence Yun, NAR’s chief economist. “Inventory shortages continue to drive up prices, and sustained job creation and historically low interest rates mean that foreign buyers are now competing with domestic residents for the same, limited supply of homes.”
Foreign buyers usually purchase properties that are pricier than the average existing home. The median price for a foreign buyer was $292,400 compared to a median price of $249,300 for all existing homes. Chinese buyers tend to purchase the most expensive properties in the U.S. at a median price of $439,100.
Five countries comprised nearly half—49 percent—of the dollar volume of purchases by foreign buyers: China, Canada, India, Mexico, and the United Kingdom. China—for the sixth consecutive year—continued to have the largest dollar volume of purchases. Still, Chinese buyers’ involvement in the market decreased; they purchased an estimated $30.4 billion in residential property in the U.S., a drop of 4 percent from last year.
The highest amount of foreign buying activity in the U.S. continues to be centered on three states: Florida (19 percent); California (14 percent); and Texas (9 percent).
International buyers report buying a property in the U.S. for numerous reasons, but the most frequent reason, at 52 percent, is for a primary residence, according to the report. However, Chinese buyers were most likely to purchase a home in the U.S. for student housing, while Canadian buyers were the most likely to purchase a property as a vacation home. Indian buyers were the most likely to purchase a U.S. property to serve as their primary residence.
Source:
“2018 Profile of International Transactions in U.S. Residential Real Estate,” National Association of REALTORS(R) (July 26, 2018)
Half of all US homes have regained their pre-recession value!
The average home is 8.4% more valuable than it was during the housing crises 10 years ago, according to study
In the decade since the stock market crashed and house values fell drastically, half of all American homes have finally recovered while others are still struggling to get back their pre-recession worth, according to a new study.
In nine major cities, 95 percent of all houses are now worth more than their peak value during the housing bubble, according to a monthly Real Estate Market report by Zillow published Thursday.
San Antonio, Texas; Austin, Texas; San Jose, California; Nashville, Tennessee; Dallas, Texas; Seattle, Washington; Houston, Texas; and Salt Lake City, Utah, logged the highest recovery rates across the country while 99.6 percent of all homes in Denver are now more valuable then before the crash, according to the Zillow study.
“Even a decade after the 2008 financial crisis, and five-plus years into the recovery, it’s clear that the housing boom and bust was felt very differently in various markets — and is still being felt today in many,” Zillow Senior Economist Aaron Terrazas said in a statement.
Across the country, 21 housing markets saw the median home value — $217,300 — surpass its pre-recession peaks. In Las Vegas, Hartford, Connecticut, and Orlando, Florida, home values have continued to lag with fewer than 5 percent of properties returning to pre-recession peaks.
Meanwhile, luxury properties in all states recovered faster, with 57.1 percent of top-tier homes returning to pre-recession levels compared to 39.7 percent in the lowest tier, according to the Zillow study.
The past decade has further increased the gap between homeowners and those who rent. As the average home value rose 8.4 percent since the recession, median rent also rose 1.3 percent to $1,400 in the last year alone.
The current housing shortage, in which high demand and low inventory lead to bidding wars well above the asking price, makes it difficult for many people to even buy a home.
“While stabilizing growth in rents is likely a relief for those renters saving to become homeowners, many of those would-be buyers in a number of the nation’s hottest markets will be contending with home prices that are as high as they’ve ever been,” Terrazas said.
Original story by, Veronika Bondarenko
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