REAL ESTATE TOPICS...18 Percent of Housing Markets Less Affordable Than Historically Normal Levels in Q2 2016

IRVINE, Calif. – June 23, 2016 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its Q2 2016 Home Affordability Index, which shows that 18 percent of U.S. county housing markets were less affordable than their historically normal levels in Q2 2016, up from 5 percent of markets in the previous quarter but down from 20 percent of markets exceeding historically normal home affordability levels a year ago.

The report analyzed median home prices derived from publicly recorded sales deed datacollected by RealtyTrac and average wage data from the U.S. Bureau of Labor Statistics in 417 U.S. counties with a combined population of nearly 210 million. The affordability index was based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3 percent down payment — including property taxes and insurance (see full methodology below).

Out of the 417 counties analyzed in the report, 74 counties (18 percent) had an affordability index below 100 in the second quarter of 2016, meaning buying a median-priced home was less affordable than the historically normal level for that county going back to the first quarter of 2005. That was up from 22 counties (5 percent) exceeding historically normal affordability levels in Q1 2016 but down from 82 counties (20 percent) exceeding historically normal affordability levels in Q2 2015.

“Although nearly one in five U.S. housing markets was not affordable by historic standards in the second quarter, the good news is that affordability is improving compared to a year ago in the majority of markets thanks to a combination of slowing home price appreciation and accelerating wage growth, along with falling interest rates,” said Daren Blomquist, senior vice president at RealtyTrac. “The average interest rate on a 30-year fixed rate mortgage is down 37 basis points from a year ago, while annual wage growth accelerated compared to a year ago in 72 percent of the markets we analyzed and annual home price growth slowed compared to a year ago in 68 percent of the markets, including bellwether markets such as Los Angeles County, Miami-Dade County, Brooklyn, Dallas County, and San Francisco County.

“For example in San Francisco County, annual home price appreciation slowed to 2 percent in the second quarter of 2016 compared to 21 percent in the second quarter of 2015 even while annual wage growth accelerated from 5 percent to 6 percent,” Blomquist added. “Affordability constraints are beginning to rein in home price appreciation even while wage growth is gaining speed in an increasing number of markets.”

Wage growth outpaced price growth in 55 percent of counties

Annual wage growth outpaced annual home price growth in 228 of the 417 counties analyzed (55 percent), including Miami-Dade County, Florida; Kings County, New York (Brooklyn); Santa Clara County, California in the San Jose metro area; Wayne County, Michigan in the Detroit metro area; and Bexar County, Texas in the San Antonio metro area.

Prior to Q2 2016, annual home price growth had outpaced annual wage growth in more than half of the 417 counties analyzed for 16 consecutive quarters going back to Q2 2012.

Annual home price growth still outpaced wage growth in 189 of the 417 counties (45 percent), including Los Angeles County, California; Cook County, Illinois in the Chicago metro area; Harris County, Texas in the Houston metro area; Maricopa County, Arizona in the Phoenix metro area; and San Diego County, California.

“Thanks to Seattle’s booming economy, the region is enjoying strong wage growth; however, not strong enough to keep up with escalating home prices,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where in King County annual home price growth outpaced wage growth for the sixth consecutive quarter in Q2 2016. “Even persistently low interest rates have not been enough to offset rising home prices. Unfortunately, I don’t see things changing in the near term which means there’s no relief in sight for frustrated buyers who are getting priced out of the market.”

Markets least affordable by absolute standard led by Brooklyn, San Francisco, Santa Cruz

Buying a median priced home in the second quarter of 2016 required 35.4 percent of average weekly wages on average across all 417 counties analyzed for the report.

Counties least affordable by the absolute standard of percentage of wages needed to buy a median priced home were Kings County (Brooklyn), New York (121.7 percent of average weekly wages to buy a median-priced home); Marin County, California in the San Francisco metro area (118.1 percent); Santa Cruz County, California in the Santa Cruz metro area (113.5 percent); San Francisco County, California (94.6 percent); and Maui County, Hawaii (92.8 percent).

Other counties among the top 25 least affordable by historic standards included counties in Los Angeles, Honolulu, Sacramento, San Diego, and San Jose.

Markets most affordable by absolute standard led by Atlanta, Detroit, Baltimore

Counties most affordable by the absolute standard of percentage of wages needed to buy a median-priced home were Clayton County, Georgia in the Atlanta metro area (10.4 percent of average weekly wages to buy a median-priced home); Wayne County, Michigan in the Detroit metro area (10.9 percent); Baltimore City, Maryland (11.6 percent); Bay County, Michigan in the Bay City metro area (12.3 percent); and Rock Island County, Illinois in the Davenport-Moline-Rock Island metro area (12.4 percent).

Other markets among the top 25 most affordable by absolute standards included counties in Philadelphia, Cleveland, Milwaukee, Cincinnati and St. Louis.

“Throughout much of the Ohio markets, while prices have increased due to low supply of available inventory for sale, decreasing interest rates have attributed to greater affordability in many areas,” said Michael Mahon, president at HER Realtors, covering the Ohio housing markets of Dayton, Columbus and Cincinnati. “As concerns are raised in the media over the potential of increasing interest rates before year end by the Federal Reserve, we are experiencing an increase in buyers looking to utilize low down payment mortgage products, such as FHA loans, in an attempt to take advantage of our current interest rate environment.”

REAL ESTATE NEWS... California May pending home sales and Market Pulse Survey

California pending home sales hold pace in May

Housing supply on the rise but low affordability to cut into demand

LOS ANGELES (June 23) – Building on April’s gain, California pending home sales continued to rebound on a year-to-year basis, as listings increased, primarily in seven of nine Bay Area counties, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

With an increase in housing supply, C.A.R.’s May Market Pulse Survey** also reflected a closing gap between REALTORS®’ concern of low inventory and low housing affordability – fewer REALTORS® were concerned about low inventory, but more REALTORS® were concerned with a decline in housing affordability.

Pending home sales data:

• Statewide pending home sales rose in May on an annual basis, with the Pending Home Sales Index (PHSI)* increasing 3.8 percent from 131.4 in May 2015 to 136.5 in May 2016, based on signed contracts. May’s increase comes as welcome news since closed transactions declined in May despite low interest rates and high housing demand.

• California pending home sales declined 3.6 percent on a monthly basis compared to April, which was almost entirely due to seasonal factors. When adjusting pending sales for typical seasonal patterns, pending sales actually edged up 0.1 percent from April and 3.1 percent from May 2015.

• Led by Southern California, pending sales were up last month on an annual basis across the state on a regional level, with the exception of the San Francisco Bay Area, which saw pending sales contract from the previous year.

• For the Bay Area as a whole, pending sales were up 4.6 percent from April and down 1.6 percent from May 2015. Perhaps counterintuitively, within the core areas of the Bay Area, San Francisco and Santa Clara counties, pending sales actually saw an increase over last year of 40.5 percent and 0.4 percent, respectively. The surge in San Francisco was exaggerated by the monthly decline in the county pending sales level a year ago, when it hit the bottom in the last 10 years.  Pending sales typically increase from April to May.

• Pending sales in the more affordable areas of the Bay Area, where inventory is less constrained, have experienced a decrease in pending sales as a disproportionate increase in home prices has eroded housing affordability.

• The pending sales in Central Valley posted a gain of 3.8 percent from the previous year and were down 14.5 percent on a month-to-month basis, following a particularly strong April increase.

• Pending home sales in Southern California as a whole rose 5.6 percent from May 2015 and 2.4 percent from April, thanks to year-over-year gains of 6.9 percent in Los Angeles County and 6.2 percent in San Diego County. Orange County experienced a 1.8 percent decrease from the previous year.

Year-to-Year Change in Pending Sales by County/Region

County/Region/State	May-16	May-15	Yearly % Change
Los Angeles	97.8	91.5	6.9%
Monterey	73.8	67.3	9.6%
Orange	79.6	81.1	-1.8%
Sacramento	83.1	82.1	1.2%
San Diego	157.4	148.2	6.2%
San Francisco	115.4	82.1	40.5%
Santa Clara	107.1	106.7	0.4%
SF Bay Area	177.9	180.4	-1.4%
So. CA	111.3	105.4	5.6%
Central Valley	111.3	107.2	3.8%
California	136.5	131.4	3.8%

REAL ESTATE NEWS...99 of Top 100 Housing Metros Improve Year Over Year

MCLEAN, VA--(Marketwired - Jun 29, 2016) - Freddie Mac (OTCQB: FMCC) today released its Multi-Indicator Market Index® (MiMi®), showing the spring homebuying season staying on course in most areas of the country, with two additional metros -- Charlotte, North Carolina, and Knoxville, Tennessee -- entering their benchmark ranges.

The national MiMi value stands at 84.1, indicating a housing market that's on the outer range of its historic benchmark level of housing activity, with a +0.27 percent improvement from March to April and a three-month improvement of +1.63 percent. On a year-over-year basis, the national MiMi value has improved +7.37 percent. Since its all-time low in October 2010, the national MiMi has rebounded 42 percent, but remains significantly off from its high of 121.7.

News Facts:

• Thirty-six of the 50 states plus the District of Columbia have MiMi values within range of their benchmark averages, with the District of Columbia (102), Hawaii (97.4), Utah (95.9) and Colorado, Montana and Oregon all having the same value (95.8) and being closest to their benchmark averages.
• Sixty-seven of the 100 metro areas have MiMi values within range with Nashville, TN (99.9), Honolulu, HI (99.8), Salt Lake City, UT (99.0), Los Angeles, CA (98.6) and Austin, TX (102.6) ranking in the top five.
• The most improving states month over month were Mississippi (+1.29%), Tennessee (+1.27%), Massachusetts (+1.15%), Florida (+0.98%) and Nebraska (+0.97%). On a year-over-year basis, the most improving states were Florida (+15.34%), Colorado (+14.73%), Nevada (+14.62%), Oregon (+14.46%) and New Jersey (+13.48%).
• The most improving metro areas month over month were Lakeland, FL (+2.06%), Chattanooga, TN (+2.04%), Modesto, CA (+1.83%), Orlando, FL (+1.82%), and New Haven, CT (+1.78%). On a year over year basis, the most improving metro areas were Orlando, FL (+20.17%), Tampa, FL (+17.47%), Denver, CO (+17.39%), Cape Coral, FL (+16.69%), and Portland, OR (+15.99).
• In April, 42 of the 50 states and 86 of the top 100 metros were showing an improving three-month trend. The same time last year, 46 of the 50 states, and all of the top 100 metro areas were showing an improving three-month trend.

Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:

"Seven years into the recovery from the Great Recession most of the nation's housing markets remain below their historical benchmarks, but continue to grind higher month-by-month. Nationally, MiMi in April 2016, is 84.1, a 7.37 percent year-over-year increase and the 48th consecutive month of year-over-year increases. Over this four-year timeframe, MiMi has increased 36.5 percent and now stands just 15.9 percent below its historic benchmark average.

"Out of the 50 states and the District of Columbia 49 posted positive year-over-year changes. North Dakota and Wyoming, two states heavily reliant on the energy sector, were the only states with year-over-year declines. Out of the 100 metro areas MiMi tracks, 99 posted positive year-over-year gains, with Tulsa, Oklahoma -- also with deep ties to the energy sector -- posting no change year-over-year.

"Among the four MiMi indicators, Purchase Applications increased the most in April, rising 1.77 percent from March and up 15.27 percent year over year. The strong positive momentum in home purchase applications is a good sign for a housing market likely to post the best year in home sales since 2006. Despite strong house price growth, the MiMi Payment-to-Income indicator fell 1.05 percent in March, reflecting the impact of lower mortgage rates. If global factors like the Brexit put significant downward pressure on long-term mortgage rates, the U.S. housing market could benefit from increased affordability, helping to partially offset the impact of house prices, which are rising around six percentage points year over year nationally."

REAL ESTATE TOPICS...What Living in a Tiny Home is Really Like

There's a growing hype surrounding tiny homes and micro-apartments, especially in places with skyrocketing rents like San Francisco, Seattle, and New York, but what's it really like to live in one?

A New York Times reporter recently spent the night in a brand-new 302-square-foot micro-apartment, and gave an in-depth account that may help real estate pros understand the benefits and the drawbacks of this real estate niche.

Key Tiny Housing Takeaways:

• Tiny homes are defined as being 500 square feet or less, and while micro-apartments like the one featured in the New York Times represent the most extreme side to this trend, apartment size across the country is dropping.
• Micro-apartments are typically designed in a way that maximizes space and features a lot of storage storage options. Even an apartment like the one features in the New York Times story has kitchen amenities that include a refrigerator, microwave, stove top, and even a dishwasher, though it surprisingly did not come with an oven.
• Tiny housing is often already furnished, with pieces that are designed to have multiple functions, including desks that transform into dining room tables or beds that fold into walls so they're out of the way during the day. The downside to this, however, is the daily grind of moving and transforming furniture can get a little tiring, and the wall-bed featured in this story was pretty difficult to set up.
• These types of spaces are probably only ideal for one person to live in, but even the smallest unit can be used to entertain up to 10 people comfortably.
• Not only are these spaces eco-friendly and leave a smaller environmental footprint, as the New York Times points out they may offer residents in high-rent areas the only chance to afford living alone and having some peace and quiet from hectic city living.

CLICK LINK TO SEE VIDEO ...

http://www.nytimes.com/video/realestate/100000004460439/dinner-for-six-in-a-bite-size-space.html?src=vidm

REAL ESTATE TOPICS...6 Insiders Reveal Secrets Every House Hunter Should Know

By Laura Agadoni

Arm yourself with insider tips before you start the home search.

One of my favorite Disneyland experiences was the time I went with a neighbor who worked there. Although it was a crowded Fourth of July evening, my neighbor knew how to navigate around the park to avoid the crowds, and the best, secret spot for watching the fireworks. All because of his insider knowledge.

Insider advice can also be a huge plus when you’re house hunting. We asked a range of pros, from agents with experience selling homes in Austin, TX, to experts working in the Seattle, WA, real estate market, about their top real estate advice. Keep these tips in mind before you begin your search, and you’ll find yourself ahead of the game and in a great spot when it’s time to place an offer.

1. Look for flaws in the foundation

When I was recently looking for investment property, I lost count of how many houses I saw that had stunning kitchens with new appliances. But often, underfoot was a creaky, unleveled floor, cracks in the foundation walls, or backyards with water drainage issues. The kitchen remodel in these cases was, as the saying goes, “like putting lipstick on a pig.” Many sellers hope you’ll fall for this ploy by not looking past the shiny stuff. Be smart by hiring a home inspector to help you avoid possible costly repairs down the road. You can also do some screening on your own by looking for common problem areas. Structural engineer Adam Green, CEO of Crosstown Engineering, suggests looking for the following foundation flaws: cracks in the walls larger than 1/8 inch, doors and windows that stick, sloping or uneven floors, and noticeable damage to the exterior.

2. Think strategically to land a house in a hot market

Nothing can be more frustrating than looking for a house in a popular area during a seller’s market. But there are ways to gain an advantage over the competition. Austin, TX, has consistently been named one of the hottest markets in recent years, and according to Trulia’s market trends, the city is likely to hang on to that hot market status through 2016. Justine A. Smith, an Austin real estate agent, suggests two strategies to land your dream home. First, have your agent pull tax records of sellers to get information to use to write a personal note. And second, ask your agent to share your needs on social media and with other agents to get the scoop on properties that haven’t yet hit the market.

3. Get the inside scoop

It’s second nature for journalists and detectives to go below the surface to ferret out information. But even amateurs can discover some useful dirt. Kate Shields, a board member of MORe, a real estate organization in Illinois, says to go out in “stealth mode.” Look for a garage sale in your desired neighborhood and casually “ask the homeowner questions as you’re shopping.” No nearby garage sales to shop? Ryan J. Halset, a Seattle, WA, real estate agent, says you can often find “neighbors out watering their lawn just hoping you’ll come talk with them.” Halset has uncovered issues with a home just by starting a conversation with a neighbor.

4. Use pricing psychology

Pricing strategy becomes important when you’re making an offer to a seller in a competitive market. You’ve probably heard that people are more likely to buy something that ends in a “9” instead of a “0,” such as being more willing to shell out for an item that costs $59 instead of $60. That’s house numerology at work. Brian Horan, a Los Angeles, CA, real estate broker, says not to “leave a ‘5’ or a ‘0’ at the end of a price.” If the property is listed at $325,000 and you know there are already three offers, you might be tempted to go about 3% higher and offer $335,000. “Don’t do it,” says Horan, who recommends an offer of $336,000, or even better, $341,000, instead. The important thing is to go one number over “5” or “0” to be the highest bid by just a little bit more.

5. Be the likable buyer

A seller attached to a home is typically more inclined to accept an offer from a buyer they like. Ryan Halset says to look around the home for “a shared area of interest.” Your agent can then personalize the offer cover letter from you this way: “I noticed that you have several books on Ireland, and I just recently visited there for a family reunion.” “

Be genuine,” says Halset. “A small connection can go a long way.” In addition, Horan suggests that buyers have their picture taken in front of the house they wish to make an offer on. “When you submit a photo with you in front of the seller’s house, it psychologically allows the seller to picture you living there.”

6. Keep an open mind

Do as Jenelle Isaacson, owner of Living Room Realty in Portland, OR, suggests and don’t rule out a home just because its owner passed away. “If you see original wallpaper, pink Formica, and vinyl, pounce on it!” she says. Her logic? “Seniors usually take better care of their homes,” says Isaacson. “Quality finishes and maintaining the property always make a better home long term, even if you remodel after purchase.” Bonus? If other buyers aren’t giving the home a second look, in a hot market, being open-minded could give you a better chance at success!

REAL ESTATE TOPICS...Five myths about selling a home

By Marjorie Youngren

The more accurately you price your home, the more buyers will see the value and the more likely you will receive multiple offers.

Real estate is fraught with misunderstanding. Here are the top five seller misconceptions:

1. Always have a buffer when setting a listing price for your home so you will have negotiating room.

False, especially in a busy market. The more accurately you price your home, the more buyers will see the value and the more likely you will receive multiple offers. If your price is too high, it might be out of your potential buyers’ price range. They won’t even see it. The buffer will actually work against you.

2. The agent who suggests the highest list price is the best.

Wrong. This agent may be suggesting a price that he or she thinks you want to hear. It’s called “Buying the Listing.” Interview a few agents. Listen carefully to why they suggested their price. Look at the comparable listings they show you. The listing price should be only one of the criteria in your decision to hire, and not the most important either, as it can always be adjusted.

Go with your gut. If only one agent suggests a high price, and the others are clustered around a different price point, perhaps he or she is not being honest with you and just trying to get the listing. Similarly, if an agent suggests a commission cut, he or she may just be trying to get the listing. I always tell my sellers that if I can’t negotiate my own commission, how do you expect me to negotiate well on your behalf?

3. Spring is the best time to sell a home.

Not necessarily. Although spring is the season when everything looks best, it is also the time of year when more people put their homes on the market. As a seller, that’s when you have much more competition. That said, the colder months can be the perfect time to capture serious buyers. But have heart; pent-up demand from years of low inventory means a large buyer pool year round in most markets. If you want to convey that spring-time feel to buyers, take pictures of your home in the nice weather, with the pool open and flowers blooming, then post them online when you are ready to sell.

4. Home improvements always boost your sale price.

Sometimes. For the most part, homeowners make improvements for their own enjoyment or because it makes sense to do so, not always for resale. Just because you bought a new furnace or finished off your playroom does not mean you will get back the money you spent. Every investment has an estimated return, and none are the actual price paid for the project. Some have a larger return than others.

5. The highest offer is the best one.

Not always. Terms and contingencies are just as important as price. Always consider the buyer’s financial strength. If the buyer is putting only 5 percent down and making a high offer, you could run into a problem if the appraisal isn’t high enough. If another buyer offers less but is putting down 30 percent, he or she is a stronger buyer.

Also, make sure the buyer’s dates align with yours. Will the closing date work for you? Is the buyer asking for an inordinate amount of time for an inspection? Does the buyer have a house to sell? Is it under contract? These contingencies can make a high offer less attractive. Be smart before you accept.

REAL ESTATE TOPICS...Can You Skip California Taxes Without Moving?

By Robert W. Wood

Not long ago, I wrote about people who seek to avoid California taxes by moving right before a major income event. They might be selling a company or settling a lawsuit. Done carefully, and with the right kind of income, it can work, cutting the sting of California’s high 13.3% state tax. Yet even moving to avoid California taxes can be tough. If you are dealing with the state’s notoriously aggressive Franchise Tax Board you can still have problems.

A related approach involves setting up a new type of trust in Nevada or Delaware. A ‘NING’ is a Nevada Incomplete Gift Non-Grantor Trust. A ‘DING’ is its Delaware sibling. There is even a ‘WING,’ from Wyoming. Let’s say you can’t move quite yet, so you wonder if a trust in another state might work? The usual grantor trust you form for estate planning doesn’t help, since the grantor must include the income on his return.

An emerging answer for the adventurous is a Nevada or Delaware Incomplete Gift Non-Grantor Trusts. The donor makes an incomplete gift—with strings attached—to the trust, and the trust has an independent trustee. The idea is to keep the grantor involved but not technically as the owner. York State has changed the law to make the grantor taxable no matter what.

California’s Franchise Tax Board says it is studying the issue. Some sellers hold significant assets and move states before they sell. California may have a claim on some of the sales proceeds even if the move is well-timed, bona fide, and permanent. Indeed, California can also dispute the move, arguing that a move in March really was not a move until July.

Thus, some marketers of NING and DING trusts offer it as an alternative or adjunct to the physical move. The idea is for the income and gain in the NING or DING trust not to be taxed until it is distributed. At that point, the distributees will hopefully no longer be in California. The chosen trustee must not be a resident of California.

If the NING or DING trust is formed to facilitate a business sale and the proceeds will be capital gain, there is the federal tax of up to 20%. Then, there is also the 3.8% Obamacare tax on net investment income. It makes the current federal tax burden on capital gain up to 23.8%. California taxes all income at up to 13.3%, and there is no lower rate for long term capital gain. It is one reason nearby Nevada has always loomed large for California sellers.

Tax-deferred compounding can yield impressive results, even if it is only state income tax that is being sidestepped. If the NING or DING trust is being used to fund benefits for children and will grow for years, it may make even more sense. Parents frequently fund irrevocable trusts for children, and may not want the trust to make distributions for many years. The parents might also remove future appreciation of the trust assets from their estates.

For tax purposes, most trusts are considered taxable where the trustee is situated.  For NING and DING trusts, one common answer is an institutional trust company in Delaware or South Dakota. For trust investment and distribution committees, the committee members should also not be residents of California. Even if you jump through all the requisite hoops, the NING or DING trust may still pay some California tax. For example, if the trust has any California source income, it will still be taxable by California.  Interest, dividend and gains from stock sales are intangibles, typically not California sourced. But gain from California rental properties or the sale of California real estate is sourced to California no matter what.

Outside of New York residents, the jury is out on NING and DING trusts. The facts, documents, and details matter. California tax lawyers know that the state rarely takes moves that short the state lying down. Still, California seems more likely to attack these trusts in audits rather than through the legislature. Even so, state tax fights in California can be protracted and expensive. But if one is careful, willing to bear some risk, and there is sufficient money at stake, the calculated risks can make sense.

REAL ESTATE NEWS...Appeals court upholds Nebraska real estate brokerage laws

A California real estate broker's free speech rights were not violated by state industry regulations that keep her from posting Nebraska property on real estate websites, a federal appeals court said Thursday.

BY MARGERY A. BECK

Read more here: http://www.mercedsunstar.com/news/state/article82766782.html#storylink=cpy

OMAHA, NEB. 

A California real estate broker's free speech rights were not violated by state industry regulations that keep her from posting Nebraska property on real estate websites, a federal appeals court said Thursday.

Read more here: http://www.mercedsunstar.com/news/state/article82766782.html#storylink=cpy

Changes enacted in 2010 gave state regulators the authority to issue cease-and-desist orders against anyone who performs the duties of a real estate broker without holding a valid Nebraska license. The regulators used that authority the same year to order Leslie Rae Young, a real estate broker licensed in California, but not Nebraska, to stop advertising Nebraska properties on real estate websites. That move was upheld by a federal court judge last year.

Young appealed, arguing that she was not acting as a real estate agent but an advertiser, which is protected under the Constitution's right to free speech. Young said in court documents that she offered advertising to homeowners who wish to sell their properties "without the use of a commission-charging Realtor." Her clients, including those in Nebraska, were charged a flat fee of $95 for her advertising service.

But a three-judge panel of the 8th U.S. Circuit Court of Appeals agreed with a lower court that found Young was acting as broker under Nebraska law.

Read more here: http://www.mercedsunstar.com/news/state/article82766782.html#storylink=cpy

The appeals panel said Young did more than just publish advertisements of properties for sale by owner, entering into listing agreements with for-sale-by-owner customers and using her status as a licensed California broker to place their listings on real estate databases not otherwise available to for-sale-by-owner properties.

She also "worded those listings in a manner that told potential Nebraska buyers and their agents that the property seller was represented by a broker," Judge James Loken wrote.

The opinion notes that under Nebraska law, Young could obtain a Nebraska nonresident broker's license by taking a three-hour correspondence course, paying a license fee, passing a criminal background check and insurance specific to brokers.

Adam Prochaska, a Lincoln attorney who represented the state and various state officials, declined to comment on the opinion.

Anastasia Boden, an attorney with Pacific Legal Foundation in Sacramento, California, representing Young, said Thursday that she is considering appealing to the full 8th Circuit. The cost of a Nebraska nonresident broker's license would be too great and requirements too onerous "when she contends she's not engage in real estate brokerage," Boden said of Young. "She is engaged purely in protected speech."

Read more here: http://www.mercedsunstar.com/news/state/article82766782.html#storylink=cpy

REAL ESTATE TOPICS...Why Southern California Real Estate is a Great Investment in 2016

Prices are continuing to rise on home sales in Southern California like elsewhere through much of the country, with the typical real estate agent seeing fewer buyers. What this means for the average home buyer is less affordability. While that’s not good news for the typical family looking to move from renting to buying, it is a positive turn for investors. At the same time, commercial real estate provides options for investors who want to enter the market or add to their portfolios.

Read any news report and you’ll notice that first-time buyers are struggling to afford housing in Southern California. According to data from Trulia, the median first-time buyer in this area would have to spend 88 percent of their income on a home. Since this is impractical, it demonstrates the lack of options for the demographic.

How does this impact investors? With fewer buyers driving the market up further, expectations are growing that the prices will actually have to come down. As investors watch the housing market, they can capitalize on those properties.

Flipping Houses

While prices aren’t good for first-time buyers, they are still providing a profit for investors who focus on flipping properties. Redfin discovered that three of the neighborhoods in the country offering the best market for flipping houses were located within Los Angeles. Two of the hottest neighborhoods were Mt. Washington and Silver Lake, ranked at second and third for gains. This is the markup percentage between the purchase price and resale price.

Even though LA real estate is hot, much like the rest of the southern region, investors can locate older homes in need of improvement and make enough updates and repairs to warrant a high price at resale. They are grabbing these undesirable properties because of the potential they see in them.

Markups produced an average gain of $31,000 for 2015 in Mt. Washington while Silver Lake saw gains averaging $307,000. The tenth place neighborhood, Los Feliz, had gains that averaged $241,000. Flippers can do extensive remodeling and still walk away with massive profits. With interest rates remaining low for mortgages, investors with the cash for a down payment and the affordability to make the payments and pay for renovations will still see income potential in the increasingly expensive Southern California market.

Commercial Properties

Investors not interested in single-family dwellings for flipping can still find lucrative opportunities in commercial properties. If they talk to a real estate agent in Orange County, they will discover that multi-family dwellings have a vacancy rate of just 3.3 percent, which means new developments will be in high demand.

Industrial properties has the second lowest vacancy rate at 3.4 percent and retail has a rate of 4.6 percent. Both of these real estate subcategories offer potential for investors who are looking for a sound investment. These figures are according to the National Association of Realtors. An experienced real estate agent can provide guidance as to where the best possibilities for future developments exist.

According to the same report, the focus for investors today is in rentals rather than flipping. New construction is still low, which is a prime area for investors who want to take advantage of the economy. Since many buyers are looking to move to another rental instead of purchasing a home of their own, they will be looking at new-builds with more amenities and space than their current units. Investors will have no problem filling properties with tenants if they should choose this avenue.

Demand for housing will continue to increase as more people seek rentals. This growth is largely driven by Hispanics as well as other minorities. In fact, the increase is projected to be 77 percent minorities versus 23 percent whites in new rental units.

In addition to the lack of sufficient housing, the improving job market and income growth is helping propel multi-family housing forward. For non-residential real estate, technology companies are driving the demand for new structures. Office space is continually needed, which is the primary focus for many developments in the area.

The story for investors who are looking at Southern California real estate to add to their portfolio is the opportunities are still here. However, they are going to have to do plenty of research to discover the right areas to place their funds, not only in the type of real estate for investing but in the right location with continued potential for profit. 

REAL ESTATE TIPS...Sell Homes Faster with a Home Stager on Your Team

Think you have all the players in place on your real estate team? Think again if you’re missing a home stager. This important role takes a special interest in how the homes you represent are portrayed to buyers.

Home staging, according to the Real Estate Staging Association, is the act of preparing and showing a property for sale. It is a systematic and coordinated methodology in which knowledge of real estate, home renovations and creative design principles are applied to attract a buyer. Preparing the property involves all or part of cleaning, de-cluttering, updating and repairing, while showcasing is the process of arranging furniture, accessories, art and light.

Staging is not a new concept, but many real estate agents are misled that this powerful marketing tool is expensive and time consuming. Therefore, they only bring on a stager when the home is vacant or has a complicated layout.

But, let’s face it all you have to do is look at the multiple listing photos online to realize that all homes can benefit from at least one aspect of home staging. We know that a homebuyer will base his or her decision on buying within seconds of viewing the space and if it’s not a show-worthy home they see, chances are there will be no offer.

There are only two major factors that matter when selling: the listing’s price and condition. That’s where home staging comes in, but there is a real disconnect between what agents believe home staging actually is. The National Association of REALTOR®’s 2015 Profile of Home Staging Report revealed only 34 percent of seller’s agents stage all homes; however, 44 percent of agents surveyed suggest that the seller only de-clutter and fix property faults.

However, those tasks are a part of the entire home staging process. It’s a disappointing statistic because home staging not only enhances a sale, but it can benefit real estate agents too by beating out competition, growing business and attracting bigger payouts.

If you want to sell quickly at the highest price, pay attention to these details in a home.

Have Sellers Remember the Buyer

It’s important for a seller to put themselves in the buyer’s shoes to begin to detach from the home. This allows a seller to set their own feeling aside in the real estate transaction. Thinking like a buyer opens the seller’s eyes to the actual condition of the home and makes them more proactive to refresh their space and maintain the home while on the market.

What’s in the Details?

Home staging gives sellers a plan of action to tackle clutter, dirt and repairs before putting their home on the market. These are easy, cost effective suggestions the seller can do to make their home stand out among neighborhood competition. By removing clutter, the seller is reducing not only the amount of items in plain sight, but beginning the actual packing process. De-cluttering also makes the cleaning process easier to handle.

It’s an Emotional Roller Coaster

Home staging instantly connects the buyer to the home emotionally. Emotions are what drive a sale because the decision will affect the buyer’s family, lifestyle and reputation. When a home seller depersonalizes the house and ultimately thinks as a buyer would, that increases the chances of a buyer getting emotionally attached and truly believing the house was made for them.

Under Public Scrutiny

Home selling can be a grueling process for sellers when their lives become public display to strangers and their criticisms. If a homeowner is going to be living in their home when selling, they have to willingly be inconvenienced not only emotionally, but physically. So what’s the best way to get out from under the microscope? Sell fast. By having a home properly prepared for sale, you don’t have to wait a long time for the right offer, which means you don’t have to sit on the market constantly trying to upkeep the space.

Assessing Minor Repairs

A major detail that will deter low-ball offers is making necessary minor repairs. A home has to be worth the price tag that you’re trying to sell it for and home staging can not only deter low offers, but increase the value.

Before you list your next house consider consulting with a home stager to find the best way to transform a home, and get the deal closed quickly and stress-free.

REAL ESTATE TOPICS...Listings-hungry agents can be bad news for overly optimistic sellers

If you’re planning to sell your house, arrange for multiple presentations by agents who specialize in your neighborhood. 

By Kenneth R. Harney

It’s one of those hush-hush practices that homeowners rarely hear about but real estate agents know only too well: It’s called “buying the listing.”

What it means is that some agents want the listing to sell your house so badly that they’ll go along with whatever price you ask, even if it’s outlandishly above what comparable houses are commanding.

They know that there’s only a minuscule chance the house will sell at the inflated price you’re proposing, but they take the listing anyway. They fully expect that after a few weeks with no takers, you’ll sober up and agree to what may have to be a series of price reductions.

Buying the listing works for some agents because they get cut into a commission payout that they would have missed had they lost the listing to competitors who counseled lower prices. And they reap immediate benefits: They’ve got their name plastered on a sign in front of your house, and they can hold open houses that could bring them new clients and other houses to sell.

But there are potentially big drawbacks for you as the seller. Overpricing a house can doom it to months of sitting unsold, even with price reductions. Serious buyers get turned off by new listings with inflated prices, and they may not come back when the price inevitably gets reduced. At the end of the process, you could be left with a final price well below what you would have gotten had you priced it realistically earlier.

Buying the listing is a controversial issue in the real estate field. Most agents insist they don’t condone it or engage in it themselves. It’s also potentially an ethical violation for members of the National Association of Realtors, who are prohibited from “attempting to secure a listing” by “deliberately mislead[ing]” the owner as to the market value. Not advising overly optimistic sellers about the true value of their property — solely to obtain the listing — can be construed as misleading them.

How common is this? It depends on location and market segment.

Some agents report that it rarely occurs in their areas. Others, such as Tony Marriott, an agent with Keller Williams Arizona Realty in Phoenix and Scottsdale, say it’s so commonplace that “better than 50 percent of the listings” start out notably overpriced.

Agents elsewhere say that initial listings with inflated prices account for anywhere from 10 percent to more than 30 percent of all new properties put on the market. Diana Keeling, an agent with Coldwell Banker in Bethesda, told me the practice is most common in the upper brackets, where “a lot of agents want the listing at all costs.”

Dean Moss, a Keller Williams Realty Partners agent in Chicago, says “some agents have agendas of listing as many houses as they can” — regardless of how off-base the initial pricing may be — “as an advertising billboard for themselves.” Passersby see their signs frequently and figure, wow, that agent must be the best. Moss says that when he confronts these agents and tells them their list price is off the charts, they sometimes reply, “I know. Make an offer!”

Some agents defend taking listings at elevated prices because they discuss pricing strategy in advance with the sellers. They draw the line: If the sellers of a house that should be priced around $400,000 are insisting on a listing at $495,000, they won’t touch it. But if they see the sellers are trying to push a little — say, pricing at $415,000 or $420,000 — they’ll take the listing.

Alan May, a Coldwell Banker Residential Brokerage agent in Evanston, Ill., says he’s open to listing properties that are slightly overpriced, but only after showing the sellers comparable recent sales and agreeing to price adjustments downward if the house doesn’t sell within specific time periods.

Bottom line: If you’re planning to sell your house, arrange for multiple presentations by agents who specialize in your neighborhood. Study the market analyses they offer. Don’t choose your agent mainly because he or she says your house is worth the most. Choose based on the key factors: proven sales record at or close to listing prices; strength of marketing strategies and resources; outstanding references and reviews.

If you let an agent buy your listing at a price that’s not supported by hard data, you may regret it months later when it still hasn’t sold and your asking price is much lower.