Guest this week

Attorney Jose Palacio is quickly becoming a household name advocating on behalf of those who live in Connecticut. He is exceptionally experienced in Immigration, Real Estate, and Family Law.

He later earned his Juris Doctor from Quinnipiac University School of Law. Attorney Palacio has since partnered with Hartford-based attorneys, learning and practicing various forms of law culminating in the establishment of his firm.

Jose Palacio is a member of the Connecticut River Valley Chamber of Commerce and serves on their board of Directors. Palacio is an active and dedicated member of his community volunteering at town, city, and statewide events. Attorney Palacio is fluent in both English and Spanish and can speak workable Portuguese.

STATE OF THE STATE IN REAL ESTATE

Lawrence Yun, the chief economist for the National Association of Realtors, came to the Hartford Golf Club, with a reassuring assessment of the Greater Hartford, Connecticut and U.S. housing markets and economies. Yun told about 100 members of the Greater Hartford Association of Realtors (GHAR) that Hartford’s housing market held its own in 2018, while much of the nation’s housing markets struggled and he said prospects for a recession later this year or next year are dim, especially with a presidential election just around the corner, meaning interest rates should remain low enough to spur home sales and  mortgage refinancing.                                                     Statewide, the median price of existing houses sold in 2018 rose for the third consecutive year, despite a 2 percent sales decline.  Connecticut’s housing performance ranked among the top 10 U.S. housing-sales markets in 2018, but the state’s continued loss of residents, or outmigration, remains a concern. Fewer residents reduce demand for housing, fewer homes on the market that take longer to sell and at lower prices.

Steady appreciation in real estate prices and values means more Hartford area and Connecticut residents can afford a home, or at least qualify for a mortgage to acquire one.

 Yun forecasted improvement in the inventory of new and used houses for sale, which GHAR recently noted has been problematic for Realtors and prospective buyers.

 

Outlook for US mortgage rates remains stable, housing crunch continues.

Six months ago, when mortgage rates neared the 5 percent mark and were expected to continue climbing, the real estate business was concerned that home buying in 2019 would be a fraction of what it could be.

Now, though, rates have receded by 50 basis points (a basis point is 1/100th of a percentage point), and all is well. (If all is not well with housing more broadly, at least loan costs aren’t the reason buyers aren’t jumping in.)

Stability is critical, of course, not just for realty sales, but also for mortgage originations. Any jump in loan rates throws both markets into a tizzy. And once things settle down, another increase starts the process all over again.

The Chief Economist for the Mortgage Bankers Association is forecasting the rate on 30-year conventional mortgages to average 4.4 percent this year and 4.6 percent in each of the next two. Rates averaged 4.3 percent in 2017 but jumped up to an average of 4.8 percent last year.

The supply of new homes necessary to meet demand fell short by 337,000 units — more than a third of a million.

Numerous economists have cited labor, land, and lenders as the reasons builders are not building houses at the rates they should be. But, the “most acute” problem is with the lack of building sites. The cost of a lot is becoming more expensive than the house itself.

 

Compass sued over a single decimal point

When it comes to contracts, attention to detail is essential. Sometimes a misplaced decimal point can mean the difference between thousands of dollars and nearly $1 million.

That’s the situation with a new lawsuit filed by Residential Realty Advisors (RRA), a real estate advisory firm for multifamily projects, against fast-expanding NY-headquartered brokerage Compass, over what RRA claims is underpayment — the company wants $871,000 instead of the $8,710 it received — due to what it says was a simple error in a contract for work it completed for a company later swallowed up in a chain of acquisitions that ended, most recently, with Compass.

Specifically, RRA claims there was a “scrivener’s error” in its contract with The Mark Company, a real estate sales and marketing firm acquired by Pacific Union International in 2015, which was subsequently acquired by Compass last year. 

Amazon is selling entire houses for less than $20,000 — with free shipping.

Residential builders have found a new home: Amazon.

Prefabricated and modular housing — with homes prebuilt in factories — is having another moment. From 2013 to 2018, industry revenue grew an annualized 8.6% to nearly $10.5 billion, including the growth of 4.1% in 2018 alone, according to research firm IBISWorld.

The homes can be built in 2-3 days with two adults.. There are a number of charming cabins and homes for sale on the internet giant — their prices may be shockingly low, but there are often additional costs and significant downsides. 

We are going to dive deeper into the tiny house movement in the next episode. This isn’t weird.. retailers have sold homes before. Sears House Kits of the 1920s.

Among the catalog giant’s astounding range of offerings were house kits, which the company began marking in 1908. The kits came in 447 different designs, from the grand “Magnolia” ($5,140 to $5,972) to the more humble, but popular “Winona” ($744 to $1,998). Sears advertised the kits with the promise that “We will furnish all the material to build this [house design]. All the parts arrived (usually by train) precut and ready to assemble. From 1908 to 1940, Sears sold between 70,000 to 75,000 homes.

 Would you buy Ikea's new robotic furniture?

Swedish furniture and home furnishings giant IKEA just unveiled an all-in-one, transforming piece of robotic furniture explicitly designed for small spaces. However, Ikea has yet to reveal the price of the system.

The Rognan, as its called, is controlled by a touchpad and can instantly, automatically convert into a bed, a room divider, a couch, a desk, and a closet and storage shelving.

The Rognan is slated to launch in 2020 in Japan and Hong Kong, two places known for the extreme density of their cities. According to Ikea, the storage unit could save one’s home an additional 86 square feet of space.

 
How Apple's new updates could shake up real estate

As part of Apple’s refresh of its iOS operating system, the popular iMessage app will now let users choose how their display name and photo appears to anyone they message or call. This is similar to what other communication apps already do.

However, given the ubiquity of iMessage, the addition of names and faces could become a popular new feature, especially since Apple will now also let you create your animated avatar to use as your profile photo.

At the very least, this ought to make communication between agents and clients more transparent. But it’s also easy to imagine real estate professionals using this new feature to more easily recognize prospects and to unify their own branding and how it appears to anyone they message.

Apple also unveiled a handful of new photo and video tools that have some pretty obvious applications in an industry that’s as visually oriented as real estate.

For starters, the update to Apple’s iOS, will now include tools that make it easier to browse and edit elements such as lighting. Users will also be able to edit video inside the Photos app.

Apple that these tools should give photographers “more creative possibilities and control over their images.”

The company also unveiled some higher end solutions that will likely appeal to professional videographers. Most notably, Apple built a new Mac Pro computer and high-end monitor. Apple described these products as the “most powerful” tools the company “has ever put in the hands of pro customers.”

Also as part of the iOS 13 upgrade, Apple’s Files app will now enable iPhone users to access data stored on USB flash drives and SD cards, as well as the Apple’s iCloud drive.

 

Helping buyers find a home for the fam? Share these 7 tips

1. Be realistic about your budget

Buyers should never spend beyond their budget. Although the might seem obvious, many buyers lose sight of that when house hunting because they’re often drawn in by the bells and whistles that can quickly drive up the price of a property.

Before they set foot into their first open house, encourage your buyer to figure out their housing expense ratio, which measures their housing expenses against their pre-tax income and indicates whether a lender would approve their loan.

2. Start saving for a down payment as soon as possible

The more cash a buyer has up front, the more likely the offer they make on a home will be accepted. Not only that, but the more money they can pay toward closing, the lower their overall mortgage will be, including their monthly payments.

Saving for a home, even with the help of a partner, can be challenging. Many homebuyers are fortunate enough to have family members willing to contribute toward their down payment, but that isn’t the only expense they’ll need to consider.

Buyers will also need to set aside funds for moving costs and other house-related purchases — after all, they wouldn’t want to put all their money into a down payment and then be stuck with a broken washing machine for months because they can’t afford to have it repaired.

 

3. Create a long-term plan 

If starting a family is in the cards for your buyer, or if they already have a family but intend to have more children in the near future, one of the biggest mistakes they can make is to buy a home that they can’t grow into.

Have an honest conversation with your buyer about their goals and expectations.

Once they can tell you exactly what it is they want, they can start to look for both a home and a mortgage option that can comfortably accommodate their growing family and budget.

For example, a family that intends to stay in the same home for 10 years or more should consider a fixed-rate loan because they can budget their monthly income without having to worry about their interest rates going up unexpectedly.

 

4. Grow your credit score, and buy at the right time

If you know your buyer intends to stay in the same home for a long time and a fixed-rate loan seems like a sensible option, offer recommendations to help them improve their credit score.

Although they provide predictable, affordable payments throughout the life of the loan, it’s harder to get approved for a fixed-rate loan when interest rates are high. That’s because the higher the interest rate when a buyer applies for a fixed-rate loan, the higher their monthly payment will be, which makes it harder to qualify.

Refer your buyer to resources like Bankrate to monitor loan interest rates, and suggest that they apply for a loan when mortgage rates are low enough to meet their budget.

As their broker or agent, you can also calculate their monthly payment and help them determine how much how they can afford.

 

5. Lock in a rate as soon as you can 

Mortgage rates are subject to change based on fluctuations in the economy — for example, rates climbed in 2014 due to a reduction in stimulus from the Federal Reserve — so it’s in a buyer’s best interest to lock in a rate as soon as possible.

Help your buyer understand the significance of a rate lock by explaining to them the difference between a rate lock and a rate quote, and work with them to research whether rates are predicted to rise or fall to get the best rate.

 

6. Keep an eye on the market

The housing market is in a near-constant state of flux, shifting from a buyer’s market to a seller’s market and back again on a regular basis.

Encourage your buyer to set Google Alerts for new listings, and refer them to websites, such as Zillow, or local real estate magazines to get an idea of the list prices of family homes in their area so they can see what they can get for their money.

 

7. Consider your surroundings

Before they find the perfect home, your buyer should do some preliminary research into the town or city they want to live in, starting with its school system:

What is the reputation of the school district?

Do the children who live there have to be bussed to another town for school?

Do the schools in town offer after school programs?

What types of curricula are available?

What do other parents think of the school board and the faculty of each respective school in the district?

They should also consider what type of environment they’d like to live in:

Would they prefer to live in an area that’s rural or metropolitan?

Would they rather live in an area that’s densely wooded or one with more wide open spaces?

Would they prefer to live in a neighborhood where the houses sit close together or are spread out?

How close would they like to be to public transportation?

Do they want to have a large backyard?

Is it important that they live near any parks or playgrounds?

Would they rather live on a quiet street one that’s closer to nearby conveniences?