REAL ESTATE NEWS...Apartment market 'increasingly jittery' for investors

By Diana Olick

Rents are soaring and demand for apartments is historically high, but some developers and landlords are overestimating the strength of the U.S. apartment market — and paying for it in quarterly earnings.

Others are warning that the second half of this year will be even tougher.

Construction of new multifamily units has been robust over the past five years, far outpacing that of single-family homes, but most of the product is in pricey markets and pricier neighborhoods, not in areas where demand is highest. That is because the costs of land and construction rose.

"Any time the numbers will work, developers will build. That's what happened in San Francisco and New York. Land prices and construction costs went up so much, the only thing you could build was high-end apartments," said Alexander Goldfarb, senior REIT analyst with Sandler O'Neill, which currently has a hold rating on all the apartment REITs it covers.

That is precisely why Equity Residential missed expectations so badly in its second-quarter earnings and revised its outlook lower yet again. After exiting the Florida market, the bulk of its holdings are in San Francisco and the New York City area.

Robert Nickelsberg | Getty Images

An apartment building under construction in Brooklyn, New York.

"Clearly 2016 will not turn out to be the year we had originally expected due to deteriorating market conditions in San Francisco and New York City, which combined made up 50 percent of our initial growth forecast for the year," Equity Residential CEO David Neithercut said on a quarterly earnings call this week. "These markets have turned to become quite volatile."

Boston, Washington, D.C., Seattle and Southern California are performing better for Equity Residential, but that is not where they expected the most growth. Oversupply is part of the problem, but jobs, especially high-paying jobs, are weighing on all the apartment developers.

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AvalonBay had a reasonably solid quarter; it benefits from having a mix of products in both higher-priced markets as well as close-in suburbs. Still, there is concern that the market overall is softening. 

"This trend appears to be largely demand-driven as economic and job growth fell short of expectations for the first half of the year, and declining business confidence and investment no doubt was a contributing factor as recent uncertainty and global events have left businesses hesitant to make new commitments," AvalonBay CEO Timothy Naughton said on the company's earnings call this week.

The same is true of Essex Property Trust, which outpaced its peers in the second quarter but lowered some guidance for the second half of the year.

"Northern CA is underperforming: the company lowered its '16 market-level rent forecast to 3.8 percent (-270bps vs. prior), with San Francisco now at 2.5 percent (-380bps vs. prior). This is being offset by steady growth in southern CA (market-level rent forecast left unchanged at 5.5 percent) and acceleration in Seattle," Cantor Fitzgerald analyst Gaurav Mehta wrote.

While rents are still rising nationally, concessions are now the rule more than the exception. AvalonBay gave renters four times the monetary concessions in the second quarter of this year compared with those of a year ago.

If you start offering two months free, a $3,500 a month apartment is now $2,900, Goldfarb said. "There is a cascading effect down," he said.

UDR is somewhat better positioned than others, with properties in Texas, Nashville and Florida. Executives there tightened their earnings outlook for the rest of the year, rather than giving some leeway in an increasingly volatile market.

"That inaction is a small, and likely deliberate, show of force in a space that is increasingly jittery over supply, absolute rent levels, asset pricing, and the potentially wobbly employment backdrop," David Toti, a REIT analyst with BB&T, said in a note to investors.

Thousands of new units are set to come on line next year, the vast majority on the higher end. On the bright side, noted Goldfarb, after the current wave of construction, only those developers with strong banking relationships will be able to build.

Commercial lending has tightened dramatically, and the loans are getting smaller. That will mean less construction and a more balanced market on the high end. The trouble is, that tightening also hits affordable rental housing, which is most in need.

REAL ESTATE TOPICS...5 Ways to Ride the Tide of Rising Home Prices

By Marilyn Lewis

Home prices grew 5 percent between May 2015 and May 2016, says the respected S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. As home prices grow, new opportunities open up for homeowners, buyers and sellers.

The surge in home values was “further proof that the U.S. housing market had its strongest spring since the recession,” The Wall Street Journal says. The growth was led by cities in the West. Portland (12.5 percent price gains), Seattle (10.7 percent) and Denver (9.5 percent) had the biggest increases among 20 cities studied.

The boom-and-bust-and-boom-again U.S. housing market has many heads spinning. Here’s a quick review, with data from the U.S. Census Bureau. These numbers — which are calculated using a different method than the Case-Shiller index — are for a median-priced home.

Remember, “median” means that half the prices in the market were higher and half were lower:

1. Boom: November 2007. The median price of existing (not new) U.S. homes hits an all-time high: $249,100.
2. Bust: March 2009. Home prices plummet by nearly 18 percent. The median price falls to $205,100 in a just over two years.
3. Inching back: December 2012. By fits and starts, prices crawl upward. Around five years after the crash, home prices finally exceed the 2007 record.
4. Boom: April 2016. Prices hit a new high, $320,000 — up 28 percent from the 2007 high.
5. Wobbles: May and June 2016. After peaking, home prices fall back down to $288,800 in May. Then, they move back up again, to $306,700 in June.

Here are five opportunities that this moment offers, depending on where you are in life:

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Option No. 1: Become a homeowner

If you want to buy a home, you may be relieved to know that the growth in prices has begun to slow. No one is expecting prices to fall but the intense competition for homes in a market with limited inventory for sale should ease a bit as higher prices prompt more property owners to sell.

Zillow — whose home value estimates differ from Case-Shiller’s — predicts home prices will rise less than 3 percent by this time next year. Still, demand should stay strong: Three-quarters of renters want to become homeowners — up from 68.5 percent in 2015, say researchers at the Federal Reserve Bank of New York.

If you want to be a homeowner, get moving, economist Robert Shiller told Bloombergrecently. “People should be buying a house if they want a house and not speculating that these price increases will continue,” said Shiller, one of the creators of the Case-Shiller Index.

He emphasized that house price appreciation has averaged less than 1 percent a year over the past century.

Before you buy, find out whether it is better to rent or buy where you live. Rent-or-buy calculators like this one on Zillow can show you which of these two options makes the most sense strictly from a financial point of view.

Of course, so much else is involved in the decision, including stability — the ability to stay put and keep kids in their schools without fear of being bumped out or priced out by rent increases. Here’s help thinking the question through: “To Buy or Rent? How to Find the Answer to That Million-Dollar Question.”

A word of caution: It’s reassuring to know that since the recession, the federal government has installed consumer protections that stop lenders and borrowers from committing most of the crazy mortgage excesses that caused the housing crash.

But it’s still important to be careful when taking on debt. Other stuff could happen. There’s no guarantee we won’t have another recession. You could lose your job, or become injured and unable to work.

It is also possible you will wake up one day and realize you hate your job and need to return to school or retrain. Or maybe your spouse might need to step away from work to care for elderly parents or stay home with the kids.

The safest plans take into account what may go wrong. Here’s how to cover your bases:

• Don’t let housing eat up more than 30 percent of your income — 40 percent if you are determined to go out on a limb.
• Don’t live on credit or go without an emergency fund that could cover three to six months of expenses or more.

Finally, be sure to shop around for the best deal on mortgages. Rates are very low in historical terms. But remember that a difference of a percentage point in interest can mean tens of thousands of dollars over the life of a 30-year mortgage. One place to start comparing loan costs is in our Solutions Center.

Option No. 2: Move up to a better home

Rising home prices are freeing many homeowners from their underwater home mortgages. A home is “underwater” — also called “negative equity — when its mortgage is bigger than the home’s market value.

Nearly one-third of home mortgages were underwater in 2012 after home values sank precipitously. Owners couldn’t sell these homes for enough money to pay off the mortgage, which contributed to a shortage of homes for sale. In January, a far smaller proportion — 12.7 percent — of U.S. homes had negative equity, Zillow reported.

Owners who are no longer underwater are now in a position to sell, and to move to a better home or better location.

Option No. 3: Pull out cash

With the rising prices, homeowners with median-priced homes have seen their own equity increase by $14,000 or $15,000 in the last year.

If you need some cash, you have an opportunity to pull cash out with a refinance of your home loan, or with a home equity line of credit. “Mortgage lenders have been inundated with refinance requests,” CNBC’s Reality Check reports. If you have enough equity in your home to refinance the mortgage, this is an excellent time to do it, since mortgage rates remain near all-time lows.

Refinance borrowers paid, on average, 3.48 percent (with an average 0.5 point) for a 30-year fixed-rate mortgage in late July, according to Freddie Mac.

An important tip: Leave plenty of equity untouched if you borrow. It’s insurance that, in case of another big price drop, you won’t be stuck with negative equity.

Watch the video of ‘5 Ways to Ride the Tide of Rising Home Prices’ on MoneyTalksNews.com.

Option No. 4: Take the money and run

For some, rising home prices offer a chance to make dreams come true. In the hottest markets — most of them in the West — high demand and high prices have prompted some homeowners to cash out and use the money to retire, or to change their lives entirely.

The Orange County Register reported on homeowners such as Bob and Jennifer Hochstadter, who sold the five-bedroom Laguna Niguel, California, home they’d owned for 35 years and pocketed the cash — more than $1 million, They moved into a smaller rental property they owned and have been traveling: “We just got back from a cruise on the Danube River,” Bob said. “The time we get to spend together we never had before, so it’s really nice.”

Of course, the beauty of the Hochstadters’ story is that they still had a place to live after selling their primary residence, and they were empty-nesters in a good position to downsize.

Option No. 5: Do nothing

If you’re happy and see no big reason to make a change, sit tight, enjoy your home and see where the market takes you. Chances are good that home values will keep growing and your rising home equity will accumulate until you need it.

REAL ESTATE TIPS...7 Things You Shouldn’t Say to Clients

Sometimes, real estate agents’ tongues get ahead of their brains. Here are some client scenarios to approach with tact and diplomacy to keep your business relationship on track.

1. A cluttered house.

Don’t say: “You have too much stuff that you need to dump.”

Do say: Sherri Meadows, 2016 vice president of the National Association of REALTORS®, tells clients, “Homes that are staged properly sell faster and, most times, for a higher price.”

2. A filthy or smelly house.

Don’t say: “Your walls are dirty, and your house smells musty. People will only focus on that when they view your home.”

Do say: “I have a great contact I could recommend that can go through and do all the pesky deep cleaning for you. She’ll even scrub your walls, because I know I can’t stand doing that at my house,” says Ashley Huizenga, broker at Exit Realty in Davenport, Iowa.

3. Being inflexible.

Don’t say: “You can only reach me during business hours.”

Do say: “You can reach me between [pick a range of hours you are happy with], but I am always on alert for my clients.” You don’t have to be on call 24 hours a day, but it’s important to set reasonable expectations with your clients.

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4. A know-it-all client.

Don’t say: “You don’t know what you’re talking about. If you don’t follow the contract, you will lose your deposit.”

Do say: “I can relate to your frustration regarding the deadlines in the purchase contract, but truly, they are there to protect both parties,” Meadows says.

5. Making assumptions.

Don’t say: “Hi, you must be his daughter.” Guessing based on age or appearance is not advisable when you are identifying a client’s family or significant other. The person in this scenario could be a spouse rather than offspring, says Joe Castillo, broker-owner of Mi Casa Real Estate in Chicago.

Do say: Introduce yourself and ask, “What relation are you to Bob?”

6. Expressing opinions.

Don’t say: “My goodness, this house was just too old and small. Scratch this one off the list.” Castillo remembers when he first started in the business, he walked out of a house while saying that to his client, but then he could hear the client’s husband, who lagged behind, say, “This is the one.”

Do say: “Tell me, what are your initial thoughts on the home?”

7. Personal mementos.

Don’t say: “Buyers don’t want to see your family portraits or your design style when they tour your home.”

Do say: “I love all of your personal touches,” Huizenga says. “I think it might be helpful for people to envision their own décor if they had a little bit more of a blank slate. Would you mind taking some of this down?”

By LEE NELSON

REAL ESTATE NEWS...US homeownership rate of 62.9 percent matches a 51-year low

BY Josh Boak

WASHINGTON (AP) -- The proportion of U.S. households that own homes has matched its lowest level in 51 years — evidence that rising property prices, high rents and stagnant pay have made it hard for many to buy.

The Census Bureau says just 62.9 percent of households owned a home in the April-June quarter this year. That equaled the homeownership rate in 1965, when the census began tracking the data.

The trend appears most pronounced among millennial households, ages 18 to 34, many of whom are straining under the weight of rising apartment rents and heavy student debt. Their homeownership rate fell 0.7 percentage point over the past year to 34.1 percent. That decline may reflect, in part, more young adults leaving their parents' homes for rental apartments.

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REAL ESTATE NEWS...U.S. expands crackdown on secret real estate buyers

by Kathryn Vasel

The government's crackdown on anonymous real estate buyers hiding behind shell companies seems to be working.

In January, the Treasury Department announced a temporary initiative that requires title insurance companies to identify all-cash buyers of certain high-end real estate in Manhattan and Miami.

Now, it's expanding the order into other markets in New York City, Florida, California and Texas.

The rule will soon apply in all New York City boroughs, San Diego County, Los Angeles County, three counties in the San Francisco area and two counties directly north of Miami (Broward and Palm Beach).

It's also expanding into Bexas County, in Texas, which includes San Antonio.

The rule only applies to non-financed purchases above a certain amount, and that threshold varies by market, but typically includes homes priced at the top 10% of each market.

For instance, cash purchases made with shell companies above the $2 million mark in the California counties and above $1 million in Florida markets would be tracked.

The order is temporary -- lasting for 180 days starting on August 28.

Currently, buyers can avoid having their name attached to an address by making the purchase through a shell company, like a limited liability company or other entity.

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In early 2015, the New York Times published an investigation that found high-end properties in New York City were increasingly being purchased by shell companies. The report claimed that in 2014, more than 80% of the units sold in the Time Warner Center were purchased using shell companies. (CNN's New York offices are also located in the Time Warner Center.)

The original initiative started on March 1, and has helped authorities track and identify suspicious money activity, according to FinCEN, the Treasury Department's financial crimes unit.

"FinCEN remains concerned that all-cash purchases (i.e., those without bank financing) may be conducted by individuals attempting to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures."

A FinCen official said a significant portion of the records being reported by title insurance companies have been tied to possible crimes, including one person involved in a $16 million suspicious withdrawal, another involved in a possible counterfeit check scheme and a buyer involved in shuffling millions around through suspicious wire transfers in South America.

REAL ESTATE NEWS...U.S. Pending Home Sales Edged Higher in June

Ongoing job growth and low interest rates continue to support the U.S. housing market

WASHINGTON—A measure of homes under contract for sale rose slightly in June, as ongoing job growth and low interest rates continued to support the U.S. housing market going into the second half of the year.

The National Association of Realtors’ pending home sales index, which tracks contract signings for purchases of previously owned homes, rose a seasonally adjusted 0.2% in June from the prior month, the trade group said Wednesday. Sales then typically close within a month or two of the signing.

Economists surveyed by The Wall Street Journal had expected a larger rise of 1.8%, following May’s drop of 3.7%.

The index stood at 111.0 in June, from May’s reading of 110.8. Compared with June 2015, the index has risen 1.0%.

June’s reading was still the second-highest in the past 12 months, and a notch above the 2015 average of 108.9. But it was noticeably lower than 2016’s high of 115.0, reached in April. And in May, the measure posted its first year-over-year decline since August 2014.

Lawrence Yun, NAR’s chief economist, said the weak June gain reflected a “slight, early summer cool-down after a very active spring.”

News Corp., owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.

Pending sales were mixed in June across the country. A 3.2% monthly rise in the Northeast gave the overall index a boost, helped by a smaller rise in the Midwest. The index fell in June in the West and the South from the prior month. On an annual basis, pending sales in June were 1.6% to 1.8% higher than in June 2015 in every region except the West, where they were down by a similar magnitude.

The U.S. housing market has been posting steady gains in recent years, helping boost overall economic growth. But the ongoing strength of home sales has some industry observers worried that shrinking inventory and rising prices will weigh on further gains going forward.

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In June, sales of existing homes rose to their strongest pace in nearly a decade, NAR said last week. At that pace of sales, there were 4.6 months’ worth of existing homes on the market last month, down from five months’ worth in June of 2015, according to NAR. New home sales, which account for about 10% of the market, were up about 10% in the first six months of 2016 over the same period a year ago, the Commerce Department said Tuesday.

Job growth has been slowing in 2016 compared with the prior year, another potential headwind for the housing market, although wage growth is starting to pick up. But interest rates, another key factor supporting home purchases, continue to hover near historically low levels. The average rate on a 30-year fixed-rate mortgage in June was 3.57%, down from 3.87% in January, according to Freddie Mac.

In June testimony to Congress, Federal Reserve Chairwoman Janet Yellen noted that “housing has continued to recover gradually, aided by income gains and the very low level of mortgage rates.”

On Wednesday afternoon, Fed officials will conclude a two-day meeting in which they are discussing the state of the economy and monetary policy.

REAL ESTATE NEWS...Fed Likely to Keep Rates Steady, Markets Eye Change in Tone

By Victoria Craig Published July 26, 2016

It’s been a tumultuous year for Wall Street, and market participants aren’t expecting the Federal Reserve to add fuel to the now-contained fire at the conclusion of the central bank’s July meeting Wednesday.

U.S. central bankers will wrap up their policy-setting Federal Open Market Committee meeting at 2:00 p.m. ET, and expectations are for interest rates to remain near historic lows. Fed funds futures, a tool used to predict market expectations for changes in monetary policy, show just a 4% chance of a rate rise at the conclusion of the Fed’s two-day meeting.

With the statement is expected to be cut and dry, and no press conference by Fed Chief Janet Yellen later in the afternoon, reaction on Wall Street could be muted. However, market watchers say it’s the minutes, released next month that will likely show a lively conversation among FOMC members, and give more color about their biggest concerns, which could run the gamut from Brexit-related fallout in the U.S. economy to continued worry about slow global growth and how negative interest rates in many nations impacts U.S. monetary policy.

“Many times this year, we’ve been caught between the statement and the minutes. The minutes not being entirely in accord with the statement,” Paul Mortimer-Lee, global head of market economics at BNP Paribas explained. “The statement records the decision, [which] doesn’t change very much from one meeting to another. The language is slow to evolve. The minutes reflect the discussion of the committee.”  

He said, though, while Brexit certainly caught global markets off guard late last month, it has had minimal effect so far on the U.S. economy. Mortimer-Lee expects limited debate about Brexit among FOMC participants this month.

“The economy looks better, the labor market looks better, and a couple people have said growth looks to be about 2%,” he said. “There’s this desire to normalize, provided Brexit risks don’t increase, provided payrolls…remain around 175,000 maybe around 200,000, I think there’s a good chance they hike. Markets just haven’t been pricing in a sufficient chance.”  

Indeed, looking further out at fed funds futures, odds for a rate rise at the Fed’s next meeting in September stand at just 22%, while November rate-hike expectations move up to 23% and December stands at about 45%.

Dan North, chief economist at Euler Hermes North America, expects to see discussion around the health and strength of the American consumer at this month’s meeting. Alongside a rebound in the June jobs report after an unexpectedly weak number in May, and a steadily-improving housing market, data have shown an increase in confidence and willingness for consumers to spend in the middle part of 2016 as they elected to spend dollars saved at the gas pump rather than stuffing it into savings accounts.

Retail sales last month jumped 0.6% from May, a bigger increase than economists had expected, while the Conference Board’s gauge of consumer confidence rose to 97.3 in July, according to the latest reading on Tuesday. Wall Street had expected confidence to slip this month, likely due to concerns about potential economic instability in the wake of Brexit.  

North anticipated more hawkish language – centered around consumer spending – in the Fed’s July statement, which would help set the stage for a rate hike sooner rather than later.

“If they’re starting to say things like retail sales, consumer spending are strong, the labor market is firming, then that would lean more toward a September rate hike. If they start thinking about continued global uncertainty, Brexit fallout, a drag from net exports, then maybe September is less likely,” he speculated.

With solid economic data on nearly every front, Mortimer-Lee said the Fed is in a “temporary sweet spot,” and it should seize the opportunity to raise rates.

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“The Fed wants to normalize and it’s really up to the data to stop them. And we don’t think the data’s going to stop them,” he said.

He expects to see only a slight tweak in the statement Wednesday.

“Instead of saying the economy appears to be bouncing back, they’ll say the economy has bounced back. The labor market assessment will clearly be a bit more positive than it was last month. Inflation probably won’t change very much. So, they’ll move in a slightly more hawkish direction,” Mortimer-Lee expected. 

REAL ESTATE NEWS...House prices are historically high when compared to rent and pay

 

House prices growing north of 5% when CPI is just 1%

by

Steve Goldstein

An Open House sign directs prospective buyers to property for sale in Monterey Park, Calif.

The latest report on U.S. home prices continued to show growth far ahead of inflation.

According to the S&P CoreLogic Case-Shiller 20-city composite, prices grew 5.2% in the 12 months ending May.

That continues a streak since September 2012 in which the yearly price appreciation on a house has outpaced consumer prices. In the 12 months ending May, consumer prices grew only 1%.

Clearly, something has to give. Either the economy needs to noticeably rev higher or prices will decelerate, if not fall.

A quick-and-dirty way to value home prices is to compare it to the alternative to owning — namely, renting — and to wages.

First, on rent — as the chart shows, the ratio of house prices to rent has steadily climbed since the 2012 lows. Using data going back to 1976, the current ratio is about 16% higher than the median reading. At the peak, the ratio was 66% higher.

So it’s fair to say that home prices are more expensive than normal, and also that they’re nowhere near as mispriced as they were during the housing bubble.

On pay, there’s a similar story. House prices have steadily marched higher since the trough of 2012, compared to the average weekly pay of nonsupervisory and production workers.

The current ratio is 22% higher than the median ratio since 1976, but at the peak, that ratio was 67% above the median.

Robert Brusca, chief economist of FAO Economics, responded simply to the question of whether house prices look overvalued.

“There’s no other answer than yes, with an exclamation mark. It’s a great time to sell your house,” he said.

Brusca points out that the trend in house prices has been decelerating — despite mortgage rates hovering near record lows.

“It suggests the juice from interest rates isn’t getting into home prices anymore,” he said.

Brusca noted that in the Conference Board consumer confidence report published Tuesday, expectations both for inflation and interest rates declined.

Expectations for higher interest rates in 12 months time plummeted to a three-year low of 51.7% in July from 59.4% in June. The expectation for inflation in 12 months fell to 4.7%, the lowest rate in more than nine years.

Prospective buyers “don’t feel motivation to buy something now,” because mortgage rates are not showing any sign of an imminent rise.

Plus, the average price makes it very difficult for newcomers to get into the housing market. According to Zillow, the median house value in the hot market of Portland, Oregon is $378,600. For a conventional mortgage, that means that $75,720 is needed for a down payment. In 2014, the median household income in Portland was $58,134.

“How do you save that kind of money to get your foot in the door,” Brusca asked.

REAL ESTATE TRENDS...Get Inspired by These Design Trends from Around the World

By Erin Davis

A great way to add character and individuality to your home is to look beyond the United States and incorporate international interior design trends. It’s also a wonderful way to pay homage to your roots if you have ancestors or relatives from another part of the world.

Each culture has its own interior design flavor that stems from the area’s history, lifestyle trends and the materials available in the region. There are way too many beautiful trends from around the world to list them all here, but I’ve compiled a few of my favorites. From Mexico to Italy to Indonesia, get ready to take a trip around the world and get inspired!

Russia: Old World Elegance

Moscow, Russia

According to Aleksey Dorozhkin, editor-in-chief of ELLE Decoration Russia, in many contemporary Russian homes, “you will see owners dreaming about the faded grandeur of old estates, dachas and bourgeoise apartments of [the] Belle Époque.”

Opt for modern comforts, like new kitchen appliances and lighting fixtures, but incorporate vintage or vintage-inspired finds, including art, fabrics, and maybe even an old-fashioned bust, like the one you can see at the back of the entryway in this Moscow home:

The trick is a mix of old and new. “We are quite sentimental about the past,” says Dorozhkin.

Italy: Industrial Materials and Traditional Charm

Brugnera, Italy

This is a big trend in Italian interior design. It’s a mix of modern and traditional, hard and soft, metal and wood. Wood, stone and textured fabrics hark back to Italy’s traditional roots, while the glass and metal elements add light, structure and intensity.

It’s hard to go too wrong with this concept — just make sure the different elements are in balance throughout your home. For example, the home above contrasts sharp corners and metal with softer elements like:

• A soft blue color scheme
• Plants
• Textured rug and walls
• Artwork

Mexico: A Personal Touch

San Miguel de Allende, Mexico
 
Over the years, Mexican interior design has been heavily influenced by Mediterranean styles. Many homeowners in Mexico choose to embrace that influence, but also pay homage to the traditional history and culture of their own region.

How? Incorporate traditional Mexican art, patterns and potted plants or flowers. Light fixtures and tiles are a great place to make the distinction.

Here’s what I love about this San Miguel de Allende home:

• The big, traditional painting is front and center.
• The rug and tapestry are patterned, but the rest is simple.
• The room lets in plenty of natural light.
• The gentle, brown color scheme fits both a Mediterranean and traditional Mexican vibe.

South Africa: Light, Bright and Sustainable

Houghton, Gauteng, South Africa

Most people don’t know a lot about South African interior design trends, which is a shame because it’s beautiful! It’s all about bright spaces and sustainable living. Homes in South Africa often incorporate:

• Outdoor elements (indoor greenery, plant patterns, etc.)
• Creative artwork 
• Geometric designs
• Eco-friendly solutions

Japan: Simple and Clean, Not Sterile

Meguro-ku, Toyko, Japan

Many contemporary Japanese interior designers have perfectly mastered the art of creating simple, minimalist spaces that are also livable and inviting. That means goodbye to stark whites and hello to warmer elements like light wood and off-whites. In the kitchen above, both the table and cabinets get their color from a melamine material.

Many Tokyo dwellings are too small to have their own gardens, so indoor plants are a welcome touch.

England: Victorian Era Traditional

London, England, U.K.

Trends in the U.K. are often pretty similar to U.S. trends, but this is one distinctly English trend I love. A classic Victorian era space can still incorporate many modern elements, but if you’re going for this look, build your design around dark browns, leather (or faux leather), wood elements and lots of books.

Just keep in mind, that a few traditional elements can go a long way. For a minute, imagine the room above without the big brown couch. The space would have a much different feel! That couch really completes the room.

Denmark: Mid-Century

Copenhagen, Denmark

Mid-century modern is a term used to describe sleek, geometric, Danish-inspired designs from the 1930s to mid 1960s. The design movement has been popular for decades and has seen a resurgence in popularity in recent years all over the world, but no one does it better than Denmark.

Just make sure to bring the look into the 21st century with more contemporary elements like modern appliances or art you love.

India: Fine, Detailed Craftsmanship

Photo taken in India by Selmer van Alten

Because interior design has become so modernized in India over the last century, many homeowners and designers are making a concerted effort to use handcrafted materials in their designs, according to Sonia Dutt of ELLE Decor India.

You can incorporate traditional Indian craftsmanship in your wall treatments, accents, rugs, cushions, towels and even bed linens. To create a balance, it helps to stick to one color palette, like the reds in the photo above.

Greece: Cement Mortar

Kythira, Greece

Covering walls in a cement-like mixture isn’t just an old Greek tradition, it’s actually a big trend in Greece today, according to Flora Tzimaka, editor of ELLE Decoration Greece. It can make “any space or room look like a sculpture,” she says. It’s easy to get the look, because cement can be painted as a thin layer over most wall surfaces.

The walls in the home above used cement painted with white washed lime.

Ready to Try a New International Trend?

Incorporating an international design trend is a great way to embrace your family’s roots (or just a different culture that inspires you)! I hope this post gave you some ideas to get started. If you’re interested in design trends from a different area that I didn’t get to here, there are plenty of places to research! ELLE Decor has websites for many different countries around the world. Pinterest and Google Image searches are also great research tools.