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Homeowners not tapping into rising home equity

Posted on August 15, 2018 | Leave a comment

Homeowners are sitting on a record amount of equity, but this time they’re stubbornly reluctant to borrow against it.

Strong home price appreciation has handed Americans more than $5.8 trillion of equity they could be tapping and aren’t, more than double the level in 2011, according to data provider Black Knight Inc. At least part of that reluctance stems from rising rates, which means debt carrying adjustable rates will keep growing more expensive.

Last decade’s mortgage crisis has likely made consumers hesitant, too. Home prices fell 35 percent after the bubble burst, leaving many borrowers owing more than their house was worth. People who tapped their equity to pay off their credit cards ended up struggling to meet their obligations, said Dan Alpert, managing partner at Westwood Capital, a New York-based investment bank focusing on real estate.

“There’s a long-memory issue,” Alpert said. “People got caught with home equity lines last time.”

The banking industry is now encouraging homeowners to take a little more risk. Lenders jacked up the number of direct-mail solicitations for home equity products by 30 percent in the first quarter compared to a year earlier, according to market research firm Mintel.

The offers are landing in the mailboxes of potential customers like Andy Dogan, 42, who considered taking out a home equity line to increase his stake in the architecture firm where he’s a partner and make home improvements. He ultimately passed when the bank offered him a line for about $20,000 less than the mailer said he could be eligible for.

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The end of the global housing boom

Posted on August 6, 2018 | Leave a comment

After a years-long surge in global capitals, property prices are starting to head lower. From Sydney to Toronto, here’s a look at what’s ahead.

From London to Sydney and Beijing to New York, house prices in some of the world’s most sought-after cities are heading south.

Tax changes to damp demand, values out of kilter with affordability and tougher lending standards have combined to undermine the market. That could have wider implications because the world’s wealthy have been buying homes on multiple continents, meaning a downturn in one country could now pose more of a threat to markets elsewhere, according to the International Monetary Fund.

Prices in the U.K. capital are starting to fall as fears about the impact of Brexit, a slowing economy and high prices damp demand. Sales volumes are down and more properties are being offered for sale as sentiment turns. Properties in central London’s best districts have fallen almost 18 percent since their peak in 2014, with some homes losing as much as a third of their value, according to research by Savills Plc. At the same time developers began work on a record number of pricey apartments, creating a glut of multimillion-pound penthouses in a city with a chronic shortage of affordable housing.

Home prices in Australia’s biggest city are slumping due to a combination of credit curbs, stretched affordability and the end of the “fear of missing out.” Alarmed that lending standards were eroding in the rush for market share, regulators have progressively clamped down on riskier lending— such as interest-only mortgages—and made the banks toughen-up previously lax expense and income verification. That’s made credit harder to come by, particularly for investors who had been driving the market. With prices already the second-most expensive in the world compared to incomes, according to Demographia, affordability constraints are also biting.

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Selling Home – upgrades that may pay off

Posted on July 30, 2018 | Leave a comment

“San Diego is a very competitive market, and buyers are paying special attention to any potential upgrades they think the home needs,” says Carlos Gutierrez, a real estate agent with Coldwell Banker Residential Brokerage La Jolla. “If the kitchen hasn’t been updated in a while, potential buyers will start subtracting from the list price of the home, and that could really impact a seller’s bottom line. By making the upgrades before putting the home on the market, you can add a lot of value and possibly get buyers in a bidding war.”

Here are some of the tips Gutierrez recommends for kitchens:

• Buyers are looking for light and bright in a kitchen. Make sure you have fresh paint in a neutral color.

• Changing out cabinet fronts or even the hardware makes a big impact for little money.

• Make sure the grout is clean and doesn’t need to be redone.

• Lighting is often overlooked by sellers, but not by buyers. Adding LED lighting, recessed lights or nice pendant lights will make a big impact.

• If you can’t afford new appliances, make sure your current appliances are clean.

Each of these upgrades can be achieved without a lengthy, expensive full remodel, you’ll note. “Small changes like these can bring you up to 5 percent when you sell,” Gutierrez adds. If you have a larger budget, “new appliances are always a great option because buyers notice them right away,” the agent says.

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Category Archives: Uncategorized

Homeowners not tapping into rising home equity

The end of the global housing boom

Selling Home – upgrades that may pay off

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