Scottsdale Real Estate

Until recently the Scottsdale housing market has been missing the segment of the population known as "millennials." That generation has been described as having poor spending and saving habits. Many have finished college and are facing repayment of student loans. On top of that, rents have skyrocketed in recent years – increasing at a faster rate than incomes – making it difficult to save money for a down payment to buy a home.

Millennial Growth in Scottsdale Housing

Until recently the Scottsdale housing market has been missing the segment of the population known as millennials.

A recent report by the Federal National Mortgage Association (Fannie Mae) cites a larger number of millennials are becoming homeowners. The report says with the exception of the last housing boom from 2000-2005, the number of young, first-time home buyers has been dropping for the last 20+ years. The decline began during the Great Recession and that part of the Scottsdale housing market never fully recovered.

New information provided by the U.S. Census Bureau's American Community Survey shows the number of homeowners aged 25-34 fell an average of 300,000 people each year between 2007-2012. The decrease came despite the growth in the younger population during that time.

In 2013, the decrease in the number of young homeowners improved to roughly 200,000 for the year. According to the Fannie Mae report, the number in 2014 was roughly the same as 2013.

So, what does this mean for the Scottsdale housing market?
Experts expect the young adult population to grow between now and 2020. If this occurs, even a small improvement in the ownership rate would grow that market segment. That should affect the housing industry in several different ways.

The construction of new housing would need to adapt and adjust in the size and types of homes, as well as the geographic locations where the homes are built.
Young adults will have needs and expectations that may be different from their older home buying counterparts. Millennials are used to greater technology, for example, and more open living areas.

There will be a growing need to educate, orient and advise first-time home buyers.
Since buying a home will be a new experience for the young adults, many don't know where to start in the home buying process. They may not know there are mortgage lending programs with low down payments and other advantages for first-time buyers in the Scottsdale housing market.

There will be increasing demand for services and technologies designed to help young home buyers.
Millennials are comfortable with online information research and transactions. Making it easier for them to search, virtually "visit" homes and apply for financing will be key in growing the number of potential young home buyers.

We have more information on the Scottsdale housing market under various sections in our Scottsdale Real Estate Categories to your right, and we also publish updates on Facebook and Twitter. Look for us there as well.

It’s that time of the year again where the experts dust off the Scottsdale real estate crystal ball and look into the future. Whether you’re buying, selling or renting the real estate market affects you in one way or another. Here are a few predictions for 2016.

Scottsdale Real Estate: 4 Expectations for 2016

It is time again for experts to dust off the Scottsdale real estate crystal ball and see the future.

Home price appreciation may level off. Now that the Federal Reserve has decided to raise interest rates slightly, analysts expect home prices to stagnate. Home affordability will become a bigger hurdle in 2016, especially with recent increases in home values. If prices rise and rates continue to go up, there could be a big increase in the number of unaffordable homes.

An improving U.S. economy may be offset by rising home prices and a lack of credit. Those factors will most likely limit Scottsdale real estate demand and housing growth. The exception will be in markets where rents have skyrocketed, making buying more attractive. Higher rents typically spur home buying. However, when rents are rising it’s usually more difficult for first-time buyers to save money for a down payment and loan closing costs.

A larger number of millennials are expected to buy. According to trulia.com, more millennials say they want to become homeowners between now and 2018. Typically, millennials wait for a job change or promotion or when they’ve saved enough money to buy. While real estate experts don't expect a huge surge of new buyers, they are confident there will be a gradual increase in 2016.

There could be fewer houses on the market. Most experts say the gradual recovery in home prices over the past few years has been both good and bad for people looking to buy for the first time or move into a larger home. This is due, in part, to the Baby Boomers who are slowly retiring and aren’t selling their homes as fast as they once did. As one economist said, “People aren’t going to trade in their low mortgage rate for a higher one.” Instead, Baby Boomers are remodeling rather than buying a larger home with a bigger mortgage and a higher interest rate. In fact, the American Institute of Architects (AIA) predicts home improvement projects will reach a record high in 2016.

Additional new mortgage loan options are needed. With rising interest rates come the need for new loan products with lower down payments. The growth in credit availability has been in the consumer lending arena, not in the mortgage loan industry. Borrowers have been more successful in using their improved credit scores to buy cars and boats, not homes.

New loan originations are expected to rise in 2016 by more than 10% to $905 billion, according to the Mortgage Bankers Association. Still, experts say additional creative mortgage products are needed to make home buying and borrowing more affordable.

Keep up with Scottsdale real estate trends as we move through 2016 by checking out articles we post in the Scottsdale Real Estate Categories to your right. We also post daily tips at Twitter and Facebook.

Your current Scottsdale home may or may not be the place you’ll end up living when you retire. Many of us have dreams of retiring to a secluded beach or some other relaxing location. Statistically, however, most people never leave “home” when they retire. Let’s look at a few reasons to stay put when you retire.

Your current Scottsdale home may or may not be where you will live when you retire.

Scottsdale Home Perfect for Retirement

According to a study by the Center for Retirement Research at Boston College, only 7% of the older U.S. population move every year. Despite improvement in the economy allowing for greater relocation, a recent AARP survey found that as people near retirement they plan to stay in their current home. Here’s what retirees and soon-to-be-retirees think.

Home is where the heart is.

It’s more than just an old adage. It’s a frame of mind. People become attached to where they spend most of their time. Communities that they’ve lived in for a long time are usually near and dear to them. They feel comfortable there and they like that.

My friends all live here.

As people age they remember friendships and relationships forged over time. They may include church membership, service organization or a bridge club, and these personal connections are important. Experts say that a strong social network if vital in the happiness of an aging population. As one retiree asked rhetorically, “Where am I going to find friends like the ones I have now?”

People usually retire where they are.

Baby boomers were accustomed to moving to different parts of the state or country for job opportunities. Many didn’t settle down in one place until they were in their 40s. Usually after that, there are children involved and it becomes a little more difficult to move them away from their friends, their school and the towns they grew up in. And, let’s face it, as we get older we don’t really relish the idea of packing up and relocating to a completely new part of the U. S. In addition, it costs a lot of money to move. There’s a lot to be said for feeling comfortable and content.

It need not cost a lot to prepare your Scottsdale home for retirement.

Of course, you can spend a bundle if you decide to remodel your whole house. Yet many of the improvements regarding safety as we age needn’t cost all that much. Improving lighting in hallways or along stairs, adding grab bars or raised toilets in the bathroom aren’t expensive projects.

Find more articles that may concern your Scottsdale home in the Scottsdale Real Estate Category to your right, and follow us on Twitter and Facebook where we post tips daily.

Recent Scottsdale housing statistics — included as part of third quarter housing results reported by Zillow –– show that roughly a million U.S. homeowners finally owe less than their homes are worth.

Water Receding in Scottsdale Housing Market?

Scottsdale housing continues to emerge from being underwater.

According to the Zillow report, the negative equity rate among homeowners in the U.S. dropped to 13.4%. That’s a 1% decrease from results compiled during the second quarter. The negative equity rate was 16.9% a year ago. Historically, the expected norm is a negative equity rate of 5% or less.

Housing experts say the quick rise in home values have helped the negative equity improvement. Home prices went up during October, increasing 6.8% from the same month a year ago. Nationwide, the home price increases have collectively lowered negative equity to almost $60 billion in the last quarter.

Despite these remarkable improvements, negative equity is still higher than it should be. And while a larger number of borrowers are now able to refinance because of increased values, a huge number of homeowners are still underwater. Analysts estimate over 6.5 million homeowners owe more on their mortgages than their home is worth. In addition, roughly 30% of U.S. homeowners with mortgages are still technically in a negative equity position. They lack the needed equity to make a down payment on their next home or can’t afford to sell their current home and move.

Some markets throughout the U.S. are faring better than others. Prices vary across the country and the recovery may be slower in some areas. Effective negative equity rates in U.S. housing markets range from a low of 8% to a high of over 30%.

A market with a higher negative equity rate has a smaller number of houses on the market. This usually impacts first-time buyers the hardest, since negative equity usually affects lower-priced homes. The nation’s supply of affordable homes for sale is short overall, but especially so for entry-level or “starter” homes. Scottsdale housing experts agree the biggest obstacle to a continued housing recovery is the lack of homes for sale.

With the number of repeat buyers continuing to shrink over the past ten years, there are challenges ahead. Tighter credit standards — including requiring higher FICO credit scores — have made it harder for many buyers to qualify for loans to buy larger or higher-priced homes. A decade or more ago, homeowners trading up to another home were in the 30-40 age range. Today they are much older, in the 50+ age range.

The housing outlook, therefore, is of concern to some. Inventory continues to drop resulting in a rise in home prices. And while home equity is improving, the gains often have a negative impact on the overall health of the Scottsdale housing market.

For additional information and more articles on the Scottsdale housing market, see the right side of your screen under Scottsdale Real Estate Categories. We also post daily on Facebook and Twitter, too.

The Commerce Department recently reported housing starts in the Scottsdale housing market and other parts of the U.S. dropped to a seven month low in October. And while single-family home construction in the South fell, a greater-than-expected surge in building permits indicate housing is still relatively strong.

A Closer Look at Scottsdale Housing

A surge in building permits indicate Scottsdale housing is still relatively strong.

Housing starts decreased 11% to slightly over one million units (adjusted seasonally) representing its lowest level since March. Despite that news, October housing starts remained above one million units for the seventh month in a row — one sign of a continued recovery to the housing market.

Experts say a stronger labor market along with a greater number of young adults leaving the parental "nest" has given increased support to the housing sector.

While residential construction makes up only about 3% of the gross domestic product (GDP) of the U.S., housing greatly affects the overall economy. Higher home prices mean increased household net worth and increased consumer spending. In addition, housing has helped the GDP grow for the last eighteen months. It has also cushioned the blow of weakened manufacturing.

Single-family home starts dropped 2.4% to 722,000 units. Multi-family housing starts dropped a little more than 25% to 338,000 units.

Despite housing starts suffering in some areas, the number of actual building permits issued was encouraging. Building permits increased 4.1% to a 1.15 million unit level last month, with single-family permits rising almost 2.5% to the highest level since December 2007.

Building permits for multi-family units increased nearly 7%, giving housing experts optimism that the market is on stable ground. The increase in permits for multi-family units — primarily apartment buildings — is a result of pent-up demand for rental units.

For more articles and information on the Scottsdale housing market, see the right side of your screen under Scottsdale Real Estate Categories. Follow us on Facebook and Twitter for daily news and tips we post there, as well.