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Amazon Closes In: What HQ2 Means for Housing in the Top 20

January 25, 2018 - 5:07pm

Amazon is a step closer to finalizing its HQ2 plans, having narrowed its sights on the top 20 contenders after receiving over 230 proposals from across North America. While the winning city could be any one of the short-list nominees, Amazon has made one thing clear: It is looking to build HQ2 away from the West Coast, which currently houses its principal headquarters in Seattle, Wash. Although Los Angeles is still in the realm of possibility after making Amazon’s top 20 list, most of the other locations are closer to the East Coast, with a few others scattered across the country.

Here are the cities Amazon is zoning in on:

  • Toronto, Canada
  • Columbus, Ohio
  • Indianapolis, Ind.
  • Chicago, Ill.
  • Denver, Colo.
  • Nashville, Tenn.
  • Los Angeles, Calif.
  • Dallas, Texas
  • Austin, Texas
  • Boston, Mass.
  • New York City, N.Y.
  • Newark, N.J.
  • Pittsburgh, Pa.
  • Philadelphia, Pa.
  • Montgomery County, Md.
  • Washington, D.C.
  • Raleigh, N.C.
  • Northern Virginia, Va.
  • Atlanta, Ga.
  • Miami, Fla.

“Amazon will bring thousands of high-paying jobs to one of these cities and will boost overall local economic growth—all of those highly-skilled engineers will need doctors, real estate agents, barbers, babysitters and baristas, too,” said Aaron Terrazas, senior economist at Zillow, in response to the top 20.

With new job opportunities, the chosen city can expect a surge in relocations or commuters from those seeking employment.

“We would pull from other big cities like Cleveland and Cincinnati and even outside of the state,” says Lee Ritchie, REALTOR® and team leader of the Ritchie Realty Group at RE/MAX Metro Plus in Columbus, Ohio. “We are already pulling in people from outside of the community.”

Daniel Evenchen, REALTOR® with the Mike McCann Team, Berkshire Hathaway HomeServices Fox & Roach REALTORS®, believes Philadelphia’s prime location nearby other massive metro areas is one of the biggest reasons Amazon has short-listed it.

“Of a location perspective, we’re very close to Baltimore, Washington D.C. and New York, but, comparatively, we have a lot of room for growth,” says Evenchen.

If Amazon attracts more individuals willing to relocate rather than commute, the winning location will need to prepare for an influx of incoming buyers and renters. The top 20 cities are already making plans for the possibility of HQ2.

“It is affecting the decisions of buyers and sellers right now,” Evenchen says. “I have a lot of clients who are thinking of selling and brought up Amazon. They are kind of holding off on selling and are thinking of renting their homes instead so that the value of their home appreciates if Amazon comes through. Buyers are thinking this is a great time to buy, as well.”

However, adapting to a flood of new buyers will not be easy. Many of the top 20 cities are currently dealing with tight inventory, a problem that will only be exacerbated if Amazon moves in. The proof is in Seattle.

“…Accommodating growth on this scale will be a challenge for any city,” Terrazas said. “As Amazon grew from a startup bookstore into the nation’s dominant retailer, Seattle grew alongside it—which caused some growing pains. Seattle home values have almost doubled and rents have increased by half, straining affordability.”

Evenchen foresees a challenge in the new construction market. Since the rental market in Philadelphia is moving quickly, any incoming buyers who are looking for new housing may be met with few options.

“The Philadelphia real estate market is probably going to experience a very sharp increase,” says Evenchen. “Right now, the market is extremely soft. We are seeing tenants and renters really negotiating in a tough market. At this point, vacant land is extremely difficult to come by. It’s highly sought-after. [Amazon] would probably just reinforce what’s been going on.”

Ritchie believes Columbus will face similar challenges.

“Our struggle would be that we wouldn’t have enough inventory,” Ritchie says. “We need builders to construct more houses, and prices on existing homes would go up for sure. The Downtown Columbus market—the urban market—is very hot, and a lot of people want to work here. There will be plenty of rentals, but, at this juncture, we may have difficulty in this market.”

Regardless of challenges, these cities made Amazon’s top 20 list for a reason. Ritchie believes Columbus caught Amazon’s eye because of its ability to attract millennials, and its talented workforce, moderate housing costs and standard of living. Terrazas agrees.

“Columbus may be a surprise to some, but it has long featured a dynamic combination of size, affordability, access to higher education and room to grow,” said Terrazas, stating that the top 20 list is made up of well-established cities.

“Boston is home to some of the nation’s most prestigious universities, and clearly fits Amazon’s requirement for ready access to top-tier tech talent,” Terrazas said. “Austin has been among the nation’s hottest markets for several years now, and is also home to Whole Foods, which Amazon recently acquired. Atlanta and Pittsburgh have the benefit of being incredibly affordable markets, with some of the lowest median home values and rents among the top 20 list. Amazon clearly has a tough job choosing between these 20 unique communities, and it will be interesting to see how things shake out in the coming months.”

As for Philadelphia, Evenchen believes the location’s potential is in its diversity.

“It’s very much a big little town,” Evenchen says. “It’s a city of neighborhoods. It’s extremely walkable and bike-able. Our public transportation is pretty robust and there has been a great deal of investment in parks and recreation. They just dedicated $90 million to connect the Delaware River to the hub, making it a little more accessible to the waterfront.”

Meanwhile, other cities, such as Los Angeles, are already dealing with more severe challenges.

“With very dense buildings, there are only a few places in Los Angeles where there are walkable areas,” says Natalya Shcherbatyuk, broker/owner of Flat Rate Real Estate. “At the same time, traveling around the city by car is a nightmare. The streets and freeways are overloaded all day, and not only during rush hour.”

However, with every challenge comes an opportunity. Shcherbatyuk believes one of the city’s biggest obstacles may turn out to be an advantage.

“Right now there is a construction boom in L.A.,” Shcherbatyuk says. “There is an acute shortage of housing for rent [at an affordable price] and the expensive apartments are empty, so maybe it will not be necessary to build a lot of new housing for high-salaried Amazon employees.”

Over 85 percent of the cities that submitted proposals didn’t make the cut, and many feel Amazon is losing out on their location’s advantages.

“Obviously, we are all disappointed Amazon did not name Detroit as one of the 20 cities they will be further evaluating for their new ‘HQ2,'” said Dan Gilbert, founder and chairman of Quicken Loans, in response to the top 20. “We are not deterred in any way, shape or form. Detroit is the most exciting city in the country right now, and the momentum continues to build every single day.”

Cities that were not chosen should not discount the possibility of other major tech giants making their way over. With the new tax bill in place, various companies have announced they are putting their tax cuts to good use.

“We have no doubt our best days are ahead of us,” Gilbert said of Detroit. “There are numerous large and small deals you will continue to see develop into reality in the months and years ahead.”

Apple, for example, announced its plans to build a new major campus stateside; however, the New York Times reports that Tim Cook, the company’s CEO, will not be following in Amazon’s footsteps, and instead using a different strategy to find Apple’s ideal location, rather than relying on a public bidding process.

Regardless of how these companies decide on new ventures, the winning cities can expect a bustling local economy that creates new jobs and a busy real estate market.

“It would be good for everyone,” Ritchie says. “For jobs, for new inventory, and, of course, for sellers whose home values would increase.”

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Home Laundry: To Vent or Not to Vent

January 16, 2018 - 4:30pm

I once believed it was a forgone conclusion that when adding certain laundry appliances to a home, it would mean installing exhaust ducting and cutting a hole to the outside for venting.

However, a recent report from Michele Weaver at Design Basics, LLC highlighted a growing trend in ventless dryers that can be easily located and relocated within a home because vent piping, exhaust holes and venting to the outside are not needed.

The mechanics of a home dryer can cause energy and safety problems if lint becomes trapped in the vent. This demands more energy use and frequent cleaning. Weaver believes one of the major trends consumers will be seeing in these key appliances will be the further refinement of ductless technology.

She says vent hoses snaking through a home’s framing have become a leading cause of the 2,900 (average) home clothes dryer fires reported annually, according to the U.S. Fire Administration.

J.D. Wollf at HomeSteady.com recently explained that a ventless or condenser dryer— also known as a Heat Pump Clothes Dryer (HPCD)—doesn’t need a vent because instead of expelling the hot, moist air, a heat exchanger removes the moisture from the hot air and “recycles” it, passing it back through the drying clothes. The excess water is then drained away or caught in a container that is later emptied.

The trade-off for energy savings and safety is a requirement for slightly more maintenance than vented dryers. Wollf says the condensing unit must be cleaned about once a month to remove any lint.

A study at the Florida Solar Energy Center at the University of Central Florida states that while an unvented HPCD uses less electricity than a standard resistance dryer, it was found to release significantly more heat than a conventional dryer during operation, demanding additional cooling energy that may compromise overall savings.

However, the study points out that with a current retail cost of $948, there is only a small premium on the HPCD dryers, making them cost-effective when chosen at time of replacement.

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Categories: Real Estate

Infographic: How Recent Buyers Purchased Their Home

January 13, 2018 - 1:01am

Demand and home prices are increasing, but that has yet to keep homebuyers out of the market. Here is how they did it:

 For more information, please visit www.nar.realtor.

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Categories: Real Estate

‘Aging in Place’ Begins Early: Report

January 8, 2018 - 5:09pm

Homeowners are getting older, and to continue on in their current house, improvements are necessary.

“Aging in place,” however, is not just about adding railings and ramps—in fact, 46 percent of homeowners aged 75-plus began improvements early with the expectation that they would grow older, but stay put, according to a HomeAdvisor report. The most common remodels, the report shows:

  • Add Lever-Style Doorknobs
  • Add Pull-Out Shelves
  • Add a Smart Fire Detection System
  • Add a Smart Security System
  • Replace Stone/Tile With Carpet/Wood

Homeowners at an earlier stage, aged 55-75, are also making modifications, but not necessarily due to aging concerns (though they are, fortuitously, ideal for just that). These include adding automated features like a programmable thermostat or voice activation, and, in bathrooms, grab bars and higher toilets.

According to HomeAdvisor, a “holistic” movement is occurring—a comprehensive, and, at times, preventative, approach to living over the years. Early on, that could mean addressing issues that could be unsafe, like a cracked walkway. Later, that could mean cutting clutter and organizing (accessible storage, for example), or eliminating labor-intensive chores, such as adding gutters that clean themselves. The outcome is a lifestyle that is not only beneficial currently, but also crucial down the line, when age can impede the ability to carry out chores and upkeep.

Other key improvements to consider, the report shows:

  • Lighting
  • Modifications in Shower (Bench, threshold)
  • Moving Master Bedroom to First Floor
  • Ramps
  • Wider Doorways

Source: HomeAdvisor

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Would You Play Pretend Neighbors With These TV Characters?

January 4, 2018 - 5:05pm

Good neighbors are hard to find—unless you live near your favorite fictional star. Which character on the small screen is the most sought-after in 2018?

The best on the block, according to the annual Celebrity Neighbor Survey by Zillow, are Leonard and Penny from “The Big Bang Theory,” with 19 percent of the vote. Leonard is played by Johnny Galecki, whose ranch in San Luis Obispo was destroyed in a fire last summer. Penny is portrayed by Kaley Cuoco, who, after briefly residing at Lamar Odom and Khloe Kardashian’s former home in Tarzana, made headlines with her single-gal spread.

One TV twist: Nine percent of respondents to the survey said they’re not fans of “Big Bang” characters Sheldon and Amy. The most nightmare-ish, however? Thirty-one percent said they’d dread living in proximity to the titular Simpsons—but 11 percent, still, said the opposite.

“‘The Big Bang Theory’ is one of the most popular shows on television, so it is not surprising that American adults chose its leading couple as the most desirable neighbors for 2018,” says Jeremy Wacksman, CMO at Zillow. “On the other hand, it wouldn’t be easy to live next to the Simpsons, who have spent nearly 30 seasons causing chaos for neighbor Ned Flanders and the rest of Springfield. However, as the stars of one of TV’s longest-running shows, the Simpsons are certainly beloved by some: they also tied for second on the most desirable neighbor list.”

The faves following Leonard and Penny in the ranking: The Dunphys from “Modern Family” (No. 2 alongside the Simpsons); Will and Grace from “Will & Grace” (No. 3); Jack and Rebecca Pearson from “This Is Us” (No. 4); and The Johnsons from “Black-ish” (No. 5).

After the Simpsons, the neighbors not welcome are: The Lannisters from “Game of Thrones” (No. 2); Olivia Pope from “Scandal” (No. 4); and the Jennings from “The Americans” (No. 5).

2018’s choices differ from those in prior years, when Americans were asked to pick a real-life star to share a fence with. In 2017, that honor went to the Obamas.

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Borrowers Beware: These Mortgage Rules Could Soon Get a Facelift

January 4, 2018 - 5:04pm

(TNS)—Getting a mortgage today is much different than it was before the financial crisis.

Loans have to meet certain standards and there are many rules lenders and servicers have to follow. But after a shakeup in leadership at the Consumer Financial Protection Bureau (CFPB), the future of some policies is uncertain.

Here’s why: The new acting director of the CFPB, budget director Mick Mulvaney, is expected to review regulations that haven’t been finalized, and he may try to alter rules that are already in place.

Here are three policies Mulvaney could change and what adjustments to them might mean for homeowners and homebuyers. The CFPB has already announced plans to reconsider certain rules.

Home Mortgage Disclosure Act
When you apply for a mortgage, some information—including your race, ethnicity and sex—could be released to the public.

For thousands of lenders, reporting mortgage information is mandatory under the Home Mortgage Disclosure Act (HMDA). While the law has been around since 1975, the amount of data made publicly available is increasing, and not everyone is thrilled.

The mortgage industry believes that publishing so much data raises concerns about consumer privacy. And there’s no way to opt out of having your information shared, notes Richard Andreano Jr., partner at the Ballard Spahr law firm.

“They expanded the data set so much that there was a concern that if it was all made public, at what point are borrowers able to be identified using HMDA data?” asks Alexander Monterrubio, director of Regulatory Affairs at the National Association of Federally-Insured Credit Unions (NAFCU).

Consumer advocates want more information released. Doing so, they argue, protects borrowers from discriminatory lending. It also holds lenders accountable for their actions, says Jaime Weisberg, senior campaign analyst at the Association for Neighborhood & Housing Development (ANHD).

The latest HMDA requirements went into effect Jan. 1, 2018, but the CFPB, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency announced that lenders won’t be penalized for mistakes made while collecting data in 2018 or reporting it in 2019. They also won’t have to resubmit data unless errors are “material.”

The CFPB also said that it would revisit certain aspects of HMDA.

“HMDA could be made almost worthless,” says Peter Smith, a senior researcher at the Center for Responsible Lending. “We need a good body of rules to make sure lenders are playing a fair game with consumers.”

Ability-to-Repay and Qualified Mortgage Standards
Another rule that has been subject to debate is the qualified mortgage (or ability-to-repay) rule implemented in 2014. It requires most lenders to make a “good faith effort” to determine whether someone can afford a mortgage and eventually pay it back.

Critics say the new standards have kept many people, including low-income individuals, from becoming homeowners.

The CFPB is obligated to review the ability-to-pay rule since the Bureau is required to assess existing regulations within five years.

With the CFPB’s change in leadership, there may be pressure to loosen lending requirements, says Barry Zigas, director of Housing Policy at the Consumer Federation of America. There’s already a Senate bill aiming to give qualified mortgage status to loans offered by many banks and credit unions without requiring the lender to meet every condition under the ability-to-repay rule.

The bill’s supporters say it would give more consumers access to mortgages. But Zigas calls it a “dangerous effort to undermine consumer protections.” If it passes, a financial institution may legally avoid going through all of the steps lenders take to ensure borrowers can repay their loans, like considering their debt obligations, verifying income and employment history, and calculating their monthly debt-to-income ratio

TRID Rule
In 2015, the CFPB combined the mortgage disclosure obligations required by the Truth in Lending Act and the Real Estate Settlement Procedures Act under the TILA-RESPA Integrated Disclosure (TRID) rule. One result of the TRID rule is that consumers preparing to close on a house have two documents explaining their closing costs and mortgage terms, rather than four.

While the new forms helped simplify the closing process for homebuyers, the TRID rule created other problems. For one, it could prevent buyers from closing on their homes as quickly as they want to, says Brandy Bruyere, vice president of Regulatory Compliance at NAFCU.

For many items on the disclosures, there’s little or no tolerance for last-minute changes, and lenders have had to choose between rejecting borrowers’ requests and eating additional fees.

The CFPB has worked to fix the TRID rule and clear up confusion for lenders. But it hasn’t addressed every issue, leading members of Congress to create a bill that would make additional adjustments.

“The TRID disclosures are solid, and any significant change would add additional costs and uncertainty to the closing process,” says Smith from the CRL.

Rules Won’t Change Overnight
The CFPB’s final rules can’t be modified without issuing a notice and asking the public for feedback. Take these steps to ensure your voice is heard, especially if you’re concerned about how rule changes could affect you.

Comment on any potential policy changes. When the opportunity arises, visit the CFPB’s website and comment on the rules the agency is proposing. “The CFPB doesn’t have to do what the comments say, but they have to provide a reason for not doing so to avoid the rule being struck down as arbitrary and capricious,” says Benjamin Olson, a former deputy assistant director for the Office of Regulations at the CFPB.

Contact your representative. Congressional leaders can review certain rules issued by the CFPB and potentially overturn them. That’s what happened with the CFPB’s arbitration rule. The policy would’ve made it easier for consumers to file class action lawsuits against banks, but lawmakers used their powers under the Congressional Review Act to kill it before it could take effect. Legislators are now considering the CFPB’s final rule on payday lending and may seek to repeal it.

Use the complaint database. If you’ve had issues with your mortgage lender or servicer and you’re having trouble resolving them, file a complaint with the CFPB. Typically, you’ll receive a response within 15 days. You can use the same database if you’re having problems with other financial entities, like the bank managing your checking or savings account.

If you’re looking at mortgage rates and preparing to buy a home for the first time, read reviews and do your homework before choosing a lender.

©2017 Bankrate.com

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Categories: Real Estate