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Americans buy homes with pets in mind

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Every day, we share news from communities around Central Jersey.
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WASHINGTON – When making decisions about buying, selling or renovating their homes, Americans, by and large, take their pets’ needs into account, according to a new report from the National Association of Realtors. The 2017 Animal House: Remodeling Impact report found that 81 percent of respondents said that animal-related considerations play a role when deciding on their next living situation.

“In 2016, 61 percent of U.S. households either have a pet or plan to get one in the future, so it is important to understand the unique needs and wants of animal owners when it comes to homeownership ” said NAR President William E. Brown, a Realtor from Alamo, California and founder of Investment Properties. “Realtors understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family.”

In fact, according to the survey, 99 percent of pet owners said they consider their animal part of the family, and this becomes apparent in the sacrifices pet owners are willing to make when it comes to buying and selling homes. Eighty-nine percent of those surveyed said they would not give up their animal because of housing restrictions or limitations. Twelve percent of pet owners have moved to accommodate their animal, and 19 percent said that they would consider moving to accommodate their animal in the future.

Realtors who were surveyed indicated that one-third of their pet-owning clients often or very often will refuse to make an offer on a home because it is not ideal for their animal. Realtors also noted that 61 percent of buyers find it difficult or very difficult to locate a rental property or a homeowners association that accommodates animals.

When it comes to selling, 67 percent of Realtors say animals have a moderate to major effect on selling a home. Approximately two-thirds of Realtors say that they advise animal owning sellers to always replace things in the home damaged by an animal, have the home cleaned to remove any animal scents and to take animals out of the home during an open house or showing.

Nearly half of all survey respondents, 52 percent, indicated that they had completed a home renovation project specifically to accommodate their animal. Of those who undertook projects, 23 percent built a fence around their yard, 12 percent added a dog door and 10 percent installed laminate flooring. Ninety-four percent of consumers indicated that they were satisfied with their renovation; 58 percent indicated they have a greater desire to be at home and 62 percent enjoy spending more time at home since completing their renovation.

When it comes to the enjoyment homeowners gain from these projects, fencing in a yard and installing laminated floors rated highest, both receiving Joy Scores of 9.4; Joy Scores range between 1 and 10, and higher figures indicate greater joy from the project. Adding a dog door came in a close second with a Joy Score of 9.2.

A majority of surveyed animal owners, 83 percent, indicated that they own a dog, which helps explain the overwhelming popularity of dog-related renovation projects. Forty-three percent of those surveyed said they own a cat, 9 percent own a bird, reptile, amphibian, arthropod, small mammal, or miniature horse, 8 percent a fish and 5 percent own a farm animal.

NAR members were also surveyed about their relationships with animals, with 80 percent of Realtors® considering themselves animal lovers and 68 percent indicating that they have pets of their own. Twelve percent of Realtors surveyed volunteer for an organization that helps animals, and 21 percent plan to volunteer in the future.

For more home improvement ideas and solutions, visit www.Houselogic.com or join the pet-friendly conversation on social media using the hashtag #realtorpets.

The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

NAR Releases New Measure of Affordability – Mortgage News Daily

The National Association of Realtors® and on-line real estate marketplace  have unveiled a new housing affordability model. The model uses data on
mortgages, state-level income information, and real estate listings to derive
two measures of availability and affordability.

The data results first in an Affordability
Distribution Curve which examines how many listings are affordable to buyers in
a particular income percentile.  The
second measure, the Affordability Score, is a calculation equal to twice the
area below the Affordability Distribution Curve on a graph.  Confusing, especially without seeing the
graph
, but we trust it is enough to know going forward that this number will
vary between zero and two.  A score of
one or above indicates a market where homes for sale are
more affordable to households in proportion to their income distribution.

NAR says the
model’s debut shows a growing rift between housing availability and
affordability.  While existing home sales
are expected to gain 1.7 percent in 2017, homebuyers
at many income levels could see an inadequate number of listings on the market
within their price range in coming months. 

Lawrence
Yun, NAR chief economist, says a top complaint Realtorshave
been hearing from clients is a notable imbalance between what they can afford
and what is listed for sale. “Home prices have ascended far past wage growth in
much of the country in recent years because not enough homeowners are selling
and homebuilders have not boosted production enough to meet rising demand.  The new affordability measure confirms, that
buyers aren’t exaggerating about the imbalance. “Amidst higher home prices and
now mortgage rates, households with lower incomes have been able to afford less
of all homes on the market last year and so far in 2017.”

The
entire distribution curve in January was below the equality line, reflecting a
growing shortage of accessible inventory for most income groups.  The gap was generally wider at lower incomes,
which indicates even tighter supply conditions. For instance, a household in
the 35th percentile could afford 28 percent of all listings, a
median income household, that is income in the 50th percentile could afford 46
percent of listings and a household in the 75th percentile was able
to afford 74 percent of active listings. 
If, in the first instance, buyers in the 35th percentile could
afford 35 percent of listings rather than 28, we assume that would result in an
Affordability Score of 1.

“Consistently
strong job gains and a growing share of millennials entering their prime buying
years is laying the foundation for robust buyer demand in 2017,” said Jonathan
Smoke, chief economist at realtor.com®  “However, buyers with a lower maximum
affordable price are seeing heavy competition for the fewer listings they can
afford. At a time of higher borrowing costs, this situation could affect
affordability even more as buyers battle for a smaller pool of homes and bid
prices upward.”

January’s Affordability Score further highlights the
disjointed rate of accessible supply on the market across the U.S.  Price growth coupled with high mortgage rates
created a January national affordability score of 0.92 percent compared to 0.97
percent in January 2016.  (Remember, “a score of one or above indicates a
market where homes for sale are more affordable to households in proportion to
their income distribution.”) Only 19 states had a score above one and only three
– North Dakota, Alaska and Wyoming – saw year-over-year gains in their score.

“Heading
into the beginning of the spring buying season, available supply is more
reachable for aspiring buyers in the upper end of the market and specifically
in nearly all Midwestern states,” said Smoke. “Meanwhile, many states in the
West and South have seen deteriorating supply levels over the past year. Buyers
in these areas should know that it may take longer to find the right home at a
price they can afford.”

The
highest affordability scores in January were found in Indiana (1.23), Ohio
(1.22), Iowa (1.18), Kansas (1.17), and Michigan and Missouri (both at 1.14).
The states with the lowest scores were Hawaii (0.52), California (0.60),
District of Columbia (0.65), and Montana and Oregon (both at 0.67).

“This
shortfall of inventory at a time of healthy job gains in most states is one of
the biggest reasons for the depressed share of first-time buyers and the
inability for the homeownership rate to rise above its near-record low,” added
Yun. “The only prescription to reversing this adverse situation is to build
more entry-level and mid-market housing that aligns with current household
incomes.”

NAR Infographic: All the Presidents’ Home Prices

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Better know a lobbyist: NAR power broker Jamie Gregory

Jamie Gregory

The National Association of Realtors is not only the largest real estate lobbying force on the Hill, but one of the largest lobbying groups period.

A trade association of more than 1 million members, the NAR functions in part as a regulator of the brokerage industry, setting the rules for how brokers use Multiple Listing Services. (In New York City, REBNY, which seceded from NAR in the 1990s, maintains its own service.) NAR’s membership is mainly composed of residential and commercial brokers, but its lobbying arm is active on just about every political issue that touches real estate. According to an analysis from the Center for Responsive Politics, the group spent more than $64 million on lobbying activities in 2016, the second most of any group in any industry.

Jamie Gregory is NAR’s deputy chief lobbyist and has worked for the organization since 1994. As the majority-Republican Congress winds up to make big legislative changes with President Trump in the White House, Gregory and his team are focused on three major issues that they expect will dominate the real estate agenda in Washington for the next two years. The National Flood Insurance Program, which provides affordable flood insurance to millions of property owners nationwide, is set to expire in September, and some Republican congressmen have expressed interest in making deep cuts to the program. On tax reform, proposals from last year’s House blueprint have yet to be updated to clarify what happens to benefits that incentivized real estate investment. And as far as what happens to Fannie Mae and Freddie Mac, that’s going to take a little longer to work out a solution.

The Real Deal recently caught up with Gregory to discuss these issues and more. (The interview was edited and condensed for brevity and clarity.)

You’ve described reauthorization of the National Flood Insurance Program as a top legislative priority. What are the current political barriers to that?

Barriers might be too strong a word, but there’s two things. One, there’s the fiscal aspect. The program does have a deficit of approximately $25 billion, provisionally from Katrina and Rita and those storms. It was being paid down, but then Sandy put it back up again. So there is a debt to the U.S. Treasury that has to be recovered. The second issue is that there is a school of thought on the hill that the program should be privatized. As an organization, we’re open to some privatization or some increased private insurance in the marketplace, but we don’t think you can privatize it [entirely].

In the past, House Financial Services Committee Chairman Jeb Hensarling (R-TX) talked about wanting to shift more of the flood insurance market to the private sector. Will he be the key figure in how this plays out?

Rep. Sean Duffy (R-WI) is now the chair of the Housing and Insurance subcommittee, and Chairman Hensarling has really deputized Duffy to take the lead. In the previous congress, the subcommittee chair was Rep. Blaine Luetkemeyer (R-MO) and in December he put out a whole list of principles he thought should be followed. Duffy is taking those principles and collecting input from outside groups, members of Congress both on and off the committee with an interest in floods. At the moment, we’re kind of at an early stage here. We’ve met with his staff, we’ve talked about the principles. I wouldn’t say we’ve gotten to a roadblock. We’re communicating, trading information. We’re trying to be a resource for the questions that they have.

We’re asking for another long-term reauthorization to provide stability. The reason for that was that, in the early to mid-2000s, over the course of about seven years, the program was allowed to expire eight times. One of the expirations was lengthy and our analysis at the time was that there were 40,000 transactions per month that were either delayed or canceled because homeowners couldn’t get flood insurance and lenders were requiring it.

Comprehensive tax reform could eliminate deductions and deferrals that incentivize homeownership and real estate investment. Would you say you’re playing defense on tax reform right now?

Yes, I think that’s fair, although we don’t have legislative language yet. We don’t even have a discussion draft. We’re all basing our comment on the House blueprint, which was released in July and was essentially drafted by Speaker Paul Ryan (R-WI), House Ways and Means Chairman Kevin Brady (R-TX) and others. We’re basing our comment on that. We’re concerned about the elimination of the incentives for homeownership based on the blueprint. Granted, we understand the blueprint was a campaign document geared toward the November elections, so now we’re anxiously awaiting seeing some kind of legislative product that we can fully analyze and fully comment on.

 

So the fact that it was a “campaign document” means that some of it should be negotiable now?

Yes.

The House blueprint on tax reform called for doubling the standard deduction, which many say would render the mortgage interest deduction useless.

This goes to the heart of doing away with the incentives. In the blueprint language, there are only two deductions that are retained and all other deductions are eliminated. The two deductions are charitable contributions and the mortgage interest deduction. The problem is that most people who currently itemize don’t get to the point where itemizing is more beneficial than the standard deduction until they own a home. It’s a combination of the mortgage interest deduction and the state and local property tax deduction that gives them that benefit. The blueprint eliminates the state and local property tax deduction and doubles the standard deduction but in doing that, according to their own analysis, less than five percent of tax filers will itemize. So while in name you’re retaining the mortgage interest deduction, in reality no one is going to use it.

So what’s the big deal?

You’re not making any difference between renting and owning, and the question is: do we want to be a nation of renters or do we want to be a nation of owners?

What about keeping the tax deferred 1031 exchange? The House blueprint was silent on this. Do you have any update on how 1031 will be affected in a draft tax reform bill?

The blueprint doesn’t mention 1031. The concern in the industry is that (now former) House and Ways Committee Chairman Dave Camp’s (D-MI) proposal from the last Congress did eliminate 1031s. In this town, once an idea gets out there, sometimes it never goes away. Chairman Brady spoke to our policy conference last week. When he was asked about 1031s, I think his response was that everything is on the table, so he didn’t specifically say and he’s taking input from people. So we’re up there talking about the economic value of 1031 exchanges and why we think they should be retained.

What are the must-haves in any reform of Fannie Mae and Freddie Mac?

We believe that whether its Fannie Mae or Fannie Mac or a new entity, there has to be an explicit government guarantee. Long-term fixed rate mortgages — 10-year, 20-year, 30-year — are all a product of the government guarantee. I do think this will come third (after flood insurance and tax reform). Chairman Hensarling wants to introduce his own version of GSE reform. Senator Mike Crapo, who chairs the senate banking committee now, has also said GSE reform is on his agenda. We’ll see legislation introduced and we’ll see hearings this year, but I think ultimately it’s far more likely a bill passes next year.

What would you say to Realtor members who say you spend too much money on lobbying?

Legislative advocacy, political advocacy is one of the services our members value the most when we talk to them about membership. When we survey them, advocacy is always near the top of the list, if not first then second. There’s a lot of reports about how much we spend on advocacy. Some of that, a big chunk of that, which puts us high in the list, is our activity on the state and local level, so it’s not all federal.

Our members are the practitioners. They’re the folks that are on the ground. I almost hesitate to say this, but for example, when GSE reform came up last time, there would be panels of think-tank folks who, if we lived in an economic vacuum, [what they proposed] would be ideal. And then inevitably there’d be a second panel of practitioners who would say “OK that’s great, but here’s how the real world exists.” Our guys are the real-world witnesses, which I think is part of our strength.

NAR Infographic: All the Presidents’ Home Prices – PR Newswire

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