Tax Bill Raises Concerns About Homeownership; Most Will Change Buying Or Selling Plans

Nearly one in three say they will buy a home “faster”

Majority support doubling the standard deduction and the increase in child tax credits

Santa Clara, CA – Dec. 21, 2017 (PRNewswire) A new nationwide consumer survey from realtor.com® shows that the Tax Cuts and Jobs Act passed by Congress on Dec. 20 is raising anxiety about owning a home, with a majority of respondents reporting that the tax bill makes them either “concerned” (36.2 percent) or “very concerned” (17.2 percent) about being a homeowner. In contrast, less than a quarter of respondents said that the bill makes them feel “positive” (15.0 percent) or “very positive” (7.2 percent) about homeownership. Only 22.9 percent said that the tax bill would not change their plans to purchase, while 57.1 percent said that the bill would not change their plans to sell.

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The Tax Cuts and Jobs Act will provide many people with higher after-tax incomes, which is expected to put upward pressure on home prices and mortgage rates. It caps the mortgage interest rate deduction at $750,000 and increases the standard deduction, which will eliminate the tax benefits of homeownership for many people and could decrease sales and home prices in expensive areas.

“The bill will have a significant impact on the housing market and overall economy, so it makes sense that people are wondering what it means to them,” said realtor.com® Senior Economist Joseph Kirchner, Ph.D. “Some house hunters – particularly wealthy buyers – will see an increase in after-tax income making an already tough housing market even more competitive. This increased demand could drive prices up even higher than they are already. And changes in the deductibility of mortgage interest and state and local taxes could cause challenges for many homeowners.”

The findings are part of an online survey of 2,324 randomly selected online respondents across the U.S. conducted on behalf of realtor.com® between Dec. 18 and 19.

Survey Highlights
Most and least favored aspects of the bill

  • Nearly doubling the standard deduction and increasing child tax credits: 26.1 percent positive, 25.4 percent very positive
  • Elimination of the mortgage interest rate deduction on second homes: 12.4 percent very positive, 18.5 percent positive
  • Elimination of the deduction for personal casualty losses: 36.4 percent very negative, 20.1 percent negative
  • The bill will increase the deficit by $1.5 trillion over 10 years, according to the Joint Committee on Taxation: 37.6 percent very negative, 13.8 percent negative

Expected impact of implementation
“How will the tax bill likely influence your home sale this year?”

  • No impact: 57.1 percent
  • I will sell faster: 13.9 percent
  • Other: 11.4 percent
  • I will sell slower: 10.0 percent
  • I will postpone my home sale: 7.6 percent

“What likely impact will the tax bill have on your plans to buy a home this year?”

  • I will buy faster: 29.2 percent
  • No impact: 22.9 percent
  • I will buy slower: 18.5 percent
  • I will purchase a less expensive home: 14.2 percent
  • I will postpone my plans to buy this year: 12.0 percent
  • I will purchase in a different location: 2.3 percent
  • Other: .9 percent

About realtor.com®
Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

Media Contact:
Realtor.com®
Lexie Puckett Holbert
lexie.puckett@move.com

Home Prices Boom 10 Years After Housing Crisis

New report reveals surprising data as prices return to bubble levels

Santa Clara, CA – November 13, 2017 (PRNewswire) Home prices have returned to the boom levels of a decade ago — which foreshadowed the bursting of the real estate “bubble” and the onset of The Great Recession — but today’s housing market is starkly different, according to data released today from realtor.com®, a leading online real estate destination. Backed by tighter lending standards and more solid economic fundamentals, current price appreciation is being driven by strong supply-and-demand dynamics with no signs of boom era flipping or over-construction.

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On the surface, today’s housing market looks suspiciously similar to the pre-recession years with rising home prices and feverish buyer demand. However, a deeper analytical assessment reveals material differences — historically low inventory levels, much tighter lending standards and significant job and household growth — and a strong housing market backed by economic fundamentals.

Home Prices are Soaring
The U.S. median home sales price in 2016 was $236,000, 2 percent higher than in 2006.1 In fact, 31 of the 50 largest U.S. metros are back to pre-recession price levels. Austin, Texas, has seen the largest price growth in the last decade with a 63 percent increase.(1) It’s followed by Denver, at 54 percent and Dallas at 52 percent. Three markets — Las Vegas, Tucson, Ariz., and Riverside, Calif., — remained more than 20 percent below 2006 price levels at the end of 2016, at 25 percent, 22 percent and 22 percent, respectively.1 Additionally, realtor.com® national data shows that listing prices have been up double-digits for the majority of 2017.

“As we compare today’s market dynamics to those of a decade ago, it’s important to remember rising prices didn’t cause the housing crash,” said Danielle Hale, chief economist for realtor.com®. “It was rising prices stoked by subprime and low documentation mortgages, as well as people looking for short term gains — versus today’s truer market vitality — that created the environment for the crash.”

Lending Standards are Tight
The largest difference in the last decade is that lending standards are the tightest they have been in almost 20 years. Today, the Dodd-Frank Wall Street Reform and Consumer Protection Act requires loan originators to show verified documentation that a borrower is able to repay the loan. As a result, the median 2017 home loan FICO score was 734, significantly up from 700 in 2006, on a scale of 330 – 830.(2)

The bottom 10 percent of borrowers also have much higher credit scores with a FICO of 649 in 2017, from 602 in 2006.2 While veterans and others with specialized mortgages can still put zero percent down, these mortgages include additional restrictions to ensure they can be paid back.

“Lending standards are critical to the health of the market,” added Hale. “Unlike today, the boom’s under-regulated lending environment allowed borrowing beyond repayable amounts and atypical mortgage products, which pushed up home prices without the backing of income and equity.”

Flipping and Over-Building Are in Check
A decade ago, the widespread belief that prices could never go down spurred rampant home flipping and building. Today, tight lending standards have kept flipping and over-building in check, but are contributing to severely constrained construction levels.

Prior to the crash, flipping became increasingly mainstream with amateur flippers taking on multiple loans. In 2006, the share of flipped homes reached 8.6 percent of all sales, exceeding 20 percent in some metros such as Washington, D.C. and Chicago.(3) With today’s tight lending environment limiting borrowing power, flipping accounted for 5 percent of sales in 2016, a more restrained level.(3)

Over-building was another indicator of the unhealthy market conditions in the early 2000s. As prices rose, builders kept building, regardless of demand. In 2006, there were 1.4 single-family housing starts for every household formed, well above the healthy level of one necessary to keep up with the market.4 Today’s market is well below normal construction levels at only 0.7 single-family household starts per household formation.4 While the lack of over-building is generally positive for the market, the current environment of under-building is having a material impact on supply and escalating prices.

Today’s Home Prices Driven by Economic Fundamentals
Strong employment and demand paired with severely limited supply is driving price escalation today. Employment was also strong in 2006, but years of over-building put an oversupply drag on the market.

In October 2017, unemployment is now at 4.1 percent — a 17-year low, with more than 150,000 jobs created on average each month in 2017.(5) In 30 of the 50 largest U.S. metros, unemployment is less than half of 2010 levels.5 In 2016, there were 8 million more workers on payrolls than in 2006 and 10 million more households.(5) At the same time, there are 600,000 fewer total housing starts and nearly 700,000 fewer single-family housing starts.(4)

Hale added, “The healthy economy is creating more jobs and households, but not giving these people enough places to live. Rapid price increases will not last forever. We expect a gradual tapering as buyers are priced out of the market – not a market correction, but an easing of demand and price growth as renting or adding roommates becomes a more affordable alternative.”

Millennial job growth has also contributed to rising demand. In September, employment reached 79 percent in the 25-34 age group, back up to 2006 levels and 5 percent higher than 2010. In fact, millennials made up 52 percent of home shoppers this past spring and with the largest cohort of millennials expected to turn 30 in 2020, their demand for homes is only expected to increase.

On top of escalating demand, the supply of homes available also is significantly constrained. In 2016, single-family inventory reached a 22-year historic low at 1.45 million homes for sale.(6) October 2017 marked the 26th consecutive month of year-over-year declines in realtor.com inventory. The market is currently averaging 4.2 months supply, which is significantly faster than 2007’s 6.4 months supply.(6) Vacancies also are very tight with for-sale vacancies dropping to 1.3 million in 2016, compared to 1.9 million in 2006. Rental vacancies hit 3.2 million in 2016, compared to 3.7 in 2006.(7)

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Largest 50 Markets Price Appreciation Since 2006

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About realtor.com®
Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

(1) Single-family home price sales – NAR/Moody’s Analytics Estimates
(2) Urban Institute
(3) Corelogic
(4) U.S. Census Bureau – Moody’s Analytics Estimates
(5) Bureau of Labor Statistics
(6) National Association of Realtors
(7) Census, Housing Vacancy Survey

Media Contact:
Realtor.com®
Lexie Puckett Holbert
lexie.puckett@move.com

Realtor.com® Launches Fantasy Real Estate Game, Property Tycoon

Players are entered in random drawings to win up to $1,000

Santa Clara, CA – June 8, 2017 (PRNewswire) Realtor.com®, a leading online real estate destination operated by News Corp [NASDAQ: NWS, NWSA]; [ASX: NWS, NWSLV] subsidiary Move, Inc., today announced the launch of Property Tycoon, a new real estate listings game, that allows participants to test their market knowledge by selecting homes they think sold over asking price from a selection of homes.

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“At realtor.com®, our goal is to help demystify the home-buying journey and Property Tycoon puts a fun spin on helping people understand how factors such as square footage and location impact home values,” said Nate Johnson, chief marketing officer for realtor.com®. “Whether you’re a real estate veteran or just starting out, Property Tycoon is an enjoyable way to test your real estate knowledge and learn more about different local markets.”

Players are given a game budget of $5 million to “purchase” as many properties as they think sold for more than their asking price from a group of 60 properties in a specific city. All featured properties are real realtor.com® listings sold in the last 60 to 90 days. Players can check their score using the Property Tycoon game results board and earn game badges for things like their placement in the competition.

Property Tycoon sweepstakes prizes are awarded after the end of the week, are based on random drawings, not based on game scores or results, and consist of a grand prize of $1,000 and five secondary prizes of $100 each.

To help players establish a better understanding of the real estate market, Property Tycoon also features economic insights that players can use to learn more about the selected city and get a leg up on the competition.

The Property Tycoon Fantasy Real Estate Sweepstakes Game I promotion starts 6/4/2017 and ends 6/10/2017. Open only to residents of the United States. Void where prohibited. No purchase necessary. Prizes to be awarded based on random drawings. Prizes: a Grand Prize of US $1,000 and five (5) Secondary Prizes of US $100 each. (Total value of all six (6) prizes is $1,500.) Important details apply: for eligibility, how to enter, how the Property Tycoon game experience works, how prizes are awarded, odds of winning and important dates, restrictions, requirements and other details, please see the Official Rules, at: http://www.realtor.com/property-tycoon/rules. There is no guarantee that additional Property Tycoon sweepstakes will be offered. Sponsor: realtor.com® division of Move Sales, Inc. 3315 Scott Blvd., Santa Clara, CA 95054.

For more information, please visit: http://www.realtor.com/property-tycoon.

About realtor.com®

Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

Media Contact:

Realtor.com®
Lexie Puckett Holbert
lexie.puckett@move.com

Realtor.com Presents “My Home Court”: Draymond Green Like You’ve Never Seen Him Before

Realtor.com sent Warriors All-Star Draymond Green undercover, disguised as a trainee Realtor with Teresa Baum from Pacific Union International. Through hidden cameras around the home, watch the hilarity that ensues when “Ray” takes a group of unsuspecting home buyers on an open house tour in Oakland, CA.

If you enjoyed this post you’ll certainly enjoy these other ‘Just For Fun’ posts!

Realtor.com® Consumer Survey Identifies Home Shoppers’ Preferences in 2017

Topping Buyers’ Lists: Three-Bedroom, Two-Bathroom, Ranch-style Homes with a Large Backyard, Updated Kitchen and Garage

Santa Clara, CA – April 12, 2017 (PRNewswire) Ranch-style homes, large backyards and updated kitchens top shoppers’ wish lists this spring, according to realtor.com®’s home buyer survey. More than half of home seekers are looking for a three-bedroom home, while 75 percent of shoppers are considering a two-bathroom home. Realtor.com® is a leading online real estate destination operated by News Corp [NASDAQ: NWS, NWSA]; [ASX: NWS, NWSLV] subsidiary Move, Inc.

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The survey, based on March data from shoppers on realtor.com®, provides insight into home buying trends in 2017 by analyzing what features shoppers are looking for this spring and summer – the peak home buying seasons.

“The insights from our most recent consumer survey provide a glimpse into what buyers are looking at today,” said Sarah Staley, housing expert for realtor.com®. “While we often think of dream homes as being big and bold, that’s not what we’re hearing from potential buyers today. These insights can help guide potential sellers in deciding which rooms or features to invest in before listing their homes.”

Following are key findings of the realtor.com® home buyer survey. Complete survey findings can be viewed at research.realtor.com.

Large backyards, garages and updated kitchens top list of most searched attributes

All age groups are looking for some combination of a backyard, garage and updated kitchen. Unsurprisingly younger homebuyers who are more likely to have young children in the house are particularly excited about finding a large yard. These age groups are also most interested in living in a good school district. The least-searched features were a guesthouse, mother-in-law suite, solar panels and a “man cave.”

Ranch-style homes and kitchens rule in 2017

Ranch homes led shoppers’ rankings of desired home styles by far, with 42 percent of shoppers looking for a ranch home. No other style of home broke 29 percent, although contemporary came close with 28 percent, followed by Craftsman and Colonial styles.

Eighty percent of shoppers ranked the kitchen as one of their three favorite rooms in their home. Kitchens were followed by master bedroom (49 percent) and living room (42 percent) among most age groups. Although, shoppers over 55 years old preferred garages over living rooms.

Privacy ranks as shoppers’ top goal for buying, largely driven by buyers over age 45

Most shoppers cite privacy as their top goal when searching for a home. Shoppers want to have a space that is solely their own. This preference can be attributed to mostly buyers between 45 and 64 years old, for whom privacy tends to beat out other preferences such as stability, family needs and financial investment.

Millennial shoppers cite family needs as the primary reason for entering the housing market

As millennial buyers prioritize family needs, it is no surprise that most millennials cited life events like increasing family size and getting married or moving in with a partner as their primary triggers for finding a new home. Shoppers age 35-44 are also focused on family needs. Most of this group cited better school districts or changing family circumstances as their primary reasons for purchasing a new home. Shoppers over age 45 are looking to downsize, as all age groups above 45 cited planning for retirement as their primary motive for finding a new house.

Desire for single-family home rises with age

Among younger buyers, many of whom are buying starter homes, 40 percent of shoppers were looking for townhouses and row houses. As shoppers age, however, that number declines and single-family homes are a clear preference. The older the age group is, the less likely they are to consider a townhouse and the more likely they are to prefer a single-family home.

About realtor.com®

Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS.® For more information, visit realtor.com®.

Media Contact:

Realtor.com®
Lexie Puckett Holbert
lexie.puckett@move.com