Wednesday, May 27, 2015

20 Fascinating facts about home ownership in the United States.

What percentage of people in the U.S. do you think own their own home? Has that number gone up or down in the last 30 years? What age group owns their home more than any other? What states have the highest and lowest home ownership rates, and how does the U.S. measure up against the rest of the world? 

When it comes to real estate, perception sometimes pushes consumer behavior more than facts. So these are some of the questions we set out to answer as we crunch the numbers on home ownership. You may be surprised what we found!

We combed through numerous articles, reports and credible sources like the U.S. Census Bureau, Pew research reports, CNN, and to come up with these 20 interesting and illuminating statistics:

1.  The U.S. homeownership rate, as per Q1 of 2015, is 63.7%, the lowest it’s been since 1990.

2.  Home ownership was at an all-time high of 69.2% in 2004, well before the credit bubble burst in 2008.

3.  To put it in perspective, the lowest point of home ownership was in 1960 and 1961 in the 62% and change range, but it’s never dipped anywhere near 62% again.  

American home ownership rates:

1960    62.1%
1965    63.3%
1970    64.2%
1975    64.6%
1980    65.6%
1985    63.9%
1990    63.9%
1995    64.7%
2000    67.4%
2005    68.9%
2009    67.4%

4.  The median value of a home has risen every decade throughout U.S. history since 1940. Even though home values took a temporary hit with the real estate crunch from 2008-2010, the median value was at an all time high as of 2010, at $179,900.

5.  Out of the 45 top countries, the U.S. sits #34 for home ownership rates.

Surprisingly, Romania has a 96.6% homeownership rate and Lithuania 91.9%, among many other Eastern European countries at the top of the list. 90% of people in China own their own home, India 86.6%, Russia 84%, Mexico 80%, Iceland 77.3%, Brazil and Italy 74.1%, Sweden 70.1%, Canada 69%, Australia at 67%, and the United Kingdom 66.7% right above the U.S., among others.

6.  Of all U.S. homes, exactly two-thirds, 66.9%, are owner-occupied, and the others are rentals.

7.  The U.S. counties with the highest average home values are:
Manhattan, NY $812,300
Marin, CA $759,300
San Francisco, CA $737,300
San Mateo, CA $710,100
Teton, WY $705,600

8.  The U.S. counties with the lowest average home values are:
Lechter, KY $56,900
Willacy, TX $50,500
Coahoma, MS $54,700
Harlan, KY $54,400
McDowell, WV $39,000

9.  Of adults 35 and younger, 36% own their own home.
35-44 years old:  59.1%
45-54 years old:  70.1%
55-64 years old: 76.6%
65+:  80% own a home!

10.  Every state in the U.S. has a home ownership rates over 50%.

11.  The states with the highest home ownership rates:
West Virginia 76.2%
Michigan 74.9%
New Hampshire 74.2%
Delaware 73.8%
Maine 73.3%

12.  The states (and district) with the lowest home ownership rates:
Hawaii 56.7%
Nevada 56.2%
California 54%
New York 53.8%
District of Colombia 45.3%

13.  New homeowners purchase more products and services in the first six months after moving than an established resident spends in a two-year period.

14.  The housing sector directly accounted for approximately 14 percent of total economic activity in 2009, but that has fallen dramatically. Still, about 40 percent of monthly consumer expenditures are housing related.

15.  Today, the average size of a home is 2,224 square feet. Compare that to the average size of 1,650 square feet in 1978!

16.  With all of that extra room, do we have bigger families and more people staying in each household? Nope! These days, the average family size in a household is 3.15, but back in 1978 it was bigger, with 3.33 person per household!

17.  2012 Pew survey found that 86 percent of Americans now believe the key to a middle class life is a secure job, and only 45% say the same about owning a home. in 1991, 70% of respondents in a CNN/Time/Yankelovich Partners poll said home ownership was essential to membership in the middle class membership, while only about 50% said it was a white-collar job.

18.  A recent survey states that 51% of people said the bust did not change their willingness to buy a home and an additional 27% said it actually made them more likely to do so.  That’s about 78% of the population who want to hold keys to their own front door.  

19.  86% of those surveyed, list the income-tax benefits of owning a home as a big reason to buy.  Being able to choose a good school system for their kids, privacy, and being free to fix up their home as they wish were also important factors.  

20.  Nearly two-thirds of people surveyed still believe purchasing a house is a safe investment. In fact, 81% of those surveyed either currently own a home and want to keep being homeowners in the future, or currently rent but plan on buying within the next ten years.

Monday, May 25, 2015

Capital Trivia! 25 Fun facts about Sacramento, California.

1. Legend has it that many parts of Sacramento are actually haunted. Rumors include apparitions and paranormal happenings in the Governor's Mansion and the California State Library, among others.

2. Sacramento has a strange monument to a State Capitol regular: for 13 years, a feral cat that was nicknamed Senator Capitol Kitty, lived at the capitol. When he died, they made a grave for her and she’s also featured in the children's book, "The Adventures of Capitol Kitty: An Almost True Story."

3. Although Discovery Park in Sacramento is advertised as staying open all year round, in the winter months it actually is submerged underwater as part of the area’s flood control system.

4. It’s no surprise then that Sacramento’s current elevation is only 17 feet above sea level, even after the city was raised in the late 1800s. 

5. When the foundation of the city was raised in the late 19th century to avoid flooding, they left many abandoned tunnels, passages, and basement level structures as part of the hidden underground second city that still exists today.

6. For some odd reason, the California Supreme Court is located in San Francisco, not the state capital of Sacramento.

7. Did you know that Sacramento actually has seven orchestras? The Sacramento Philharmonic Orchestra, the Sacramento Baroque Soloists, the Sacramento Choral Society & Orchestra, the Sacramento Youth Symphony, the Sacramento Master Singers, the Sacramento Children’s Chorus, and the Camellia Symphony all call Sacramento home.

8. The California Railroad Museum, located in Old Sacramento, is the largest railroad museum in the entire country, with 21 fully restored locomotives.

9. Our Sacramento River is the longest in the whole state of California.

10. The Sacramento Zoo actually opened in 1927 as the William Land Park Zoo. Today, about 48,000 school children visit the Sacramento Zoo every year!

11. Of course we know that Sacramento is the capital of the State of California, but there have been four other California capitals: Monterey (1849), Pueblo de San Jose (1849-1851), Vallejo (1852 and again in ‘53), and Benicia (1853-1854). 

12. Sacramento has been the capital not once but twice, during a short stint from 1852-1853 and permanently since 1879.

13. Sacramento definitely has some scorching summers, but did you know the
official hottest temperature on record is 115 degrees, set in June of 1961?

14. Speaking of temperatures, the coldest temps on record are a frigid 18 degrees in December of 1990. That was the year everyone’s pipes froze and burst, sending homeowners scrambling to wrap their pipes every winter after.

15. Despite being half a world away, Sacramento’s climate is considered Mediterranean.

16. Sacramento processes more almond crops than place in the world. Blue Diamond, alone, harvests millions of pounds of almonds every growing season.

17. Sacramento has been home to seven professional sports teams: The Sacramento Kings (Basketball – NBA), Sacramento Monarchs (Basketball – WNBA), Sacramento Capitals (Tennis – WTT), The Rivercats (Baseball – Triple-A), Sacramento Republic FC (Soccer – PSAL), and The Sacramento Sirens (Football – IWFL).

18. The Sacramento Kings have a tenuous relationship with the area, as there have been four attempts at relocating them since the 1980s. Anaheim, Virginia Beach, Las Vegas, and Seattle have all tried to lure the Kings, unsuccessfully

19. Sacramento sure has a lot of trees. In fact, we’re second only to Paris, France, for the city with the most trees per capita in the entire world.

20. The immortal writer Mark Twain called Sacramento home for a short time, working as a special news correspondent for the Sacramento Union newspaper in 1866.

21. The largest restoration project in U.S. history (at the time) was the renovation of the Sacramento Capitol building in 1976.

22. Did you know that the Crocker Art Museum in downtown Sacramento is the longest running art museum in the entire western United States?

23. Every Memorial Day weekend, The Sacramento Jazz Festival and Jazz Jubilee have taken over Old Sac for over 40 years.

24. Sacramento was the birthplace of the Pony Express in 1860, a horseback and wagon mail delivery service that ran 1,980-miles between California and Missouri. 

25. Sacramento has enjoyed many nicknames, including the “Camellia capital of the world,” “City of Trees,” “River City,” and “the Big Tomato." But residents usually affectionately refer to it as “Sactown.”

25. There are currently about 485,199 residents in the official city of Sacramento, along with 1.9 million in the surrounding towns, cities and counties. That leaves Sacramento behind Los Angeles, San Diego, San Jose, San Francisco, and even Fresno on the list of most populated cities in our state. 

Tuesday, May 19, 2015

Home buyers save a lot of money by focusing on their credit scores.

When people start the process of buying a home, there are a lot of things to focus on: which neighborhood they want to live in, finding the perfect house, getting approved for a mortgage at a great interest rate, and then the all-consuming process of packing and moving. But before any of that happens, there is one more item that should lead off their checklist: taking care of their credit score.

While a significant portion of homebuyers still pay cash for their homes (a reported 4 out of 10 buyers paid cash in 2014!), but the majority of buyers still need to take out a mortgage loan. So keeping your credit score iup to par has some very tangible benefits during the home buying process:

Lower interest rates,
A greater variety of loan programs available,
Qualify for loans with less money down,
Your offer on a house will be seen as more favorable if you have a high credit score, giving you more leverage. During multiple offer situations and bidding wars, the seller sometimes requests additional documentation like proof of the buyer’s credit score and funds.
But, of course, saving money when you make your mortgage payment every month is the real benefit. Even a credit score increase of a few points may help you qualify for a lower interest rate, adding up to tens of thousands of dollars in savings over the life of your loan.

Consider these three scenarios, where three consumers who are buying a $400,000 home, with a $320,000 mortgage, qualify for interest rates of 4%, 4.5%, and 5%, respectively. Please note this is just an illustration for educational purposes.

Interest Rate: 4%
Monthly Payment: $1,527
Total of 360 Payments: $549,982.42
Total Interest Paid: $229,982.42

Interest Rate: 4.5%
Monthly Payment: $1,621
Total of 360 Payments: $583,701.48
Total Interest Paid: $263,701.48

Interest Rate: 5%
Monthly Payment: $1,717
Total of 360 Payments: $618,418.51
Total Interest Paid: $298,418.51

That means if your credit score was top notch and you qualified for a 4% interest rate (hypothetically), you’d save $190 a month compared to the 5%, and $94 compared to the 4.5% loan. That sounds nice, but doesn’t seem like big money, right?

But when you compare the long-term savings, the person with the 4% loan saves $68,418 in total payments over the life of the loan compared to the 5% loan, and $33,719 compared to the 4.5%

That’s some HUGE savings for just a very small interest rate difference. So how do you make sure your credit score is ready for the home buying process?

First off, it’s important to understand that the scoring system used by FICO (the Fair Isaac Corporation) is the most popular credit reporting metric, acceppted by almost all mortgage lenders. FICO scores range from 300-850, with a 680 considered good and above 720 an excellent credit score.

So what credit score should you aim for? In fact, 32.8 million people have FICO scores between 700 and 749 but approximately 70 million consumers with FICO scores above 760. But that’s just base camp on the credit score mountain because roughly 36.4 million people have scores between 750 and 799 and 38.6 million are in the 800-to-850 range. Only about 1% of people with FICO scores, around 2 million individuals, ever reach the summit with a score of 800-850.

Your score is calculated based on these factors:

30% Credit utilization (Ratio of debt versus available credit.)
35% Payment history.
10% Mix of credit.
10% New credit.
15% Length of credit history.

So here are some tips to make sure your credit score will be as high as possible when you’re ready to buy a home:

1. Always pay on time.
According to FICO, 96% of people with a FICO score of 785 or greater have no late payments on their credit reports, so be one of those people who have a spotless payment history if you want the perfect FICO. Since payment history is 35% of FICO’s scoring model, paying on time is crucial.

2. Check your credit report periodically.
It's important to make sure that there are no errors on your credit file and everything is in order. These days, you also need to make sure that your identity hasn't been stolen or compromised, which effects up to 1 in 8 Americans every year.

3. Spend less and pay down your balances.
FICO calculates a significant portion of your score by your credit utilization ratio – how much debt you keep to how much your total available balances are. A survey of those who had the top scores revealed their average credit card balances relative to their limits was just 7%.

FICO calculates 30% of their scoring model by the overall money you owe and how close you are to the limits on your credit cards and revolving debt, so low balances and healthy ratios are the key to a top score.

4. Keep a good mix of credit.
Consumers with FICO scores above 760 have, on average, six accounts that are currently “paid as agreed” and an average of 3 accounts with a balance.

5. Keep well-seasoned accounts.
Most super scorers also have, on average, an oldest account that’s 19 years old. The average age of their accounts is between 6 and 12 years old and they opened their most recent account 27 months ago or more. 15% of FICO’s scoring is calculated by the credit history.

6. Start early.
Don’t wait until your ready to start looking at houses or apply for a mortgage to start working on your credit. Get a copy of your credit report for a detailed look both 6 months and then 3 months before you’re ready to apply for a mortgage. That will give you plenty of time to pay down debt, close unwanted accounts, or dispute errors and inaccuracies in order to maximize your score.

7. Do’s and Dont’s during the home buying process.
It’s important not to make big changes during the mortgage process, as it may trigger a red flag for lenders, who are trying to make decisions based on a static snapshot of your finances. Avoid big purchases on credit, moving large sums of money to and from bank accounts, and applying for any new credit or closing existing accounts.

8. Consider getting help.
Whether you sit down with a mortgage professional, bank representative, non-profit counseling center, or a good, trusted credit repair organization, it will help to get advice about improving your credit score from a pro.

Sunday, May 17, 2015

A snapshot of the Sacramento region real estate market, spring 2015.

As summertime rolls around once again in the Sacramento region, we find ourselves busier than ever, with proms and graduations, family gatherings and vacation planning, and plenty of fun activities like outdoor concerts, sports, and festivals. In between it all, many of us will look to sell our house and/or buy another one before school starts in the fall or before the winter holidays. So what can you expect to find in the Sacramento area real estate markets these days?
Overall, our real estate market can be characterized as very healthy, with a huge buyer demand, but there are some key differences from pre-recession white-hot markets that were over-inflated. For instance, even though our demand has never been higher, inventory is down 6.4%, and far less Sacramento homeowners are underwater on their mortgages or in danger of foreclosure, we’ve seen normalized home appreciation rates, around 9.5% over the last year.

Many experts predict that will continue in the right direction even with the expected interest rate increase in the summer and fall, with our homes appreciating about a 6.6% to next year.

Here is the most recent data on real estate in Sacramento County, Placer County, and the combined four-county area, released for April of 2015. Remember that these figures compare April to April the year before, and often deal with median numbers, not averages.

So if you’d like an accurate market analysis of your home’s worth or to find out what homes are for sale in your price range in a certain area, feel free to contact us.

Sacramento County:

The median list price in Sacramento County is $281,000

That median price is 5.6% higher than one year ago, in April of 2014.

It took 42 days to sell a house in April, 2015.

Cash sales were only 16.5% of all sales.

FHA sales were 27% of all sales in Sacramento County.

Sales volume was 9.2% higher this April compared to one year ago.

We now have 1.5 months of housing inventory compared to 1.8 months the same time last year.

The average price per square foot is 182, which is 7% higher than April of 2014.

The average sales price in April of 2015 was $310,000, 5.7% higher than last year.

It took 3 days longer to sell a house this April compared to last.

Placer County:

The median price in Placer County was $391,500 in April of 2015.

That median price is 6.9% higher than one year ago, in April of 2014.

It took 41 days to sell a house in April.

Cash sales were 17% of all sales that month.

FHA sales were 20% of all sales in Placer County in April.

Sales volume was 27.5% higher this April compared to last April.

There is now 1.9 months of housing inventory, compared to 2.5 months in April of 2014.

The average price per square foot is 200, which is 3% higher than April of 2014.

The average sales price in April of 2015 was $441,163, which is 3.8% higher than April of the previous year.

It took 10 days shorter to sell a house this April compared to last.

Regional Market Trends for Sacramento, Placer, Yolo, and El Dorado counties:  

The median price in the Sacramento Region was $325,000 in April of 2015.

That median price is 9.4% higher than one year ago, in April of 2014.

It took 44 days to sell a house in April of 2015.

Cash sales were 16.9% of all sales that month.

FHA sales were 23.7% of all sales in Sacramento County in April of 2015.

Sales volume was 10.5% higher in April of 2015 compared to April of 2014.

We now have 1.7 months of housing inventory, compared to 2.1 months last April.

The average price per square foot was 192 in April of 2015, 7.2% higher than April of 2014.

The average sales price in April of 2015 was $360,351, which is 6.9% higher than April of the previous year.

It took the same amount of time to sell in April 2015 compared to April 2014.