First-Time Buyers Face Lack of Inventory and Higher Prices

Entry-level homes are rising in value the fastest in most large U.S. housing markets, making it tough for first-time buyers to enter the market this spring

- There are 5.9 percent fewer homes for sale in the U.S. than a year ago.

- There are 10.4 percent fewer entry-level homes for sale in the U.S. than a year ago.

- Low supply is driving up home prices among entry-level homes, which are often sought after by first-time buyers.

- National home values rose 4.8 percent to $186,200, according to the first quarter Real Estate Market Reports. Rents rose 2.6 percent to $1,389.

Home values are rising the fastest among entry-level homes in more than half of the largest U.S. housing markets, according to first quarter Zillow® Real Estate Market Reports.i Rising home values in this segment of the market can be attributed to a lack of supply, with 10 percent fewer homes for sale this year compared to last.

The median value of entry-level homes, those in the bottom thirdii of the market, rose the most over the past year in Denver, up 20 percent, followed by Portland and Dallas. There are 13 percent fewer entry-level homes available in Denver than there were a year ago. The number of entry-level homes available declined the most in Portland. There are 40 percent fewer entry-level homes available in Portland than there were a year ago.


The findings signal difficult times ahead for first-time homebuyers looking to enter the market. Going into home-shopping season this spring, buyers will find fewer homes in the bottom and middle of the market -- the homes most affordable for first-time buyers. The trend also highlights the different experiences buyers are having in the recovering housing market. Buyers looking for the most expensive homes will find slower price growth, a larger selection, and less competition this spring than entry-level buyers who are likely to face stiff competition, bidding wars, and very few homes to choose from.

"It's going to be a tough home-buying market this spring, especially for first-time buyers or even people looking to move up into a slightly more expensive home," said Zillow Chief Economist Dr. Svenja Gudell. "In order to stand out in a competitive market, buyers should get pre-approved for a loan, find an agent who has experience with bidding wars, and consider coming in at the asking price, so the seller knows they're serious."

In all of the largest U.S. housing markets, more than a third of the homes available for sale are in the most expensive segment -- in the top third of the overall housing stock in the market. In nine markets, top-tier homes make up more than half of the inventory.

The most expensive homes on the market are more likely to have a price cut, a signal that there's less demand for top-tier homes. The share of top-tier listings with a price cut has increased 1.6 percentage points over the past year.

Metropolitan  Area	First Quarter  2016 Zillow  Home Value  Index (ZHVI)	Bottom- Tier  Percent  Home  Value  Increase	Bottom- Tier  Percent  Inventory  Change	Middle- Tier  Percent  Home  Value  Increase	Middle- Tier  Percent  Inventory  Change	Top-Tier  Percent  Home  Value  Increase	Top-Tier  Percent  Inventory  Change
United States	$        186,200	n/a	-10.4%	n/a	-10.4%	n/a	-1.9%
New York, NY	$        384,100	-0.8%	-9.0%	1.8%	-3.6%	3.5%	4.7%
Los Angeles-Long Beach-Anaheim, CA	$        565,400	6.2%	-26.3%	6.2%	-11.3%	8.1%	1.3%
Chicago, IL	$        193,800	0.7%	-14.2%	3.1%	-10.5%	1.0%	2.0%
Dallas-Fort Worth, TX	$        182,100	14.7%	-27.5%	13.0%	-32.5%	11.2%	-10.1%
Philadelphia, PA	$        204,400	0.9%	-2.0%	1.9%	-6.4%	1.3%	0.5%
Houston, TX	$        172,100	7.7%	n/a	6.4%	n/a	2.8%	n/a
Washington, DC	$        364,100	2.8%	-10.8%	2.0%	-0.7%	1.0%	2.7%
Miami-Fort Lauderdale, FL	$        230,600	11.7%	-3.6%	10.5%	7.8%	6.3%	15.4%
Atlanta, GA	$        163,000	7.3%	-11.5%	6.3%	-11.9%	5.5%	1.3%
Boston, MA	$        387,400	3.2%	-13.1%	4.9%	-4.8%	4.5%	14.6%
San Francisco, CA	$        806,600	11.0%	-17.7%	11.5%	-6.7%	12.1%	1.7%
Detroit, MI	$        123,100	-3.2%	2.0%	6.4%	-20.6%	2.8%	-3.6%
Riverside, CA	$        304,200	10.0%	-3.8%	6.9%	-11.8%	2.7%	1.7%
Phoenix, AZ	$        219,200	11.2%	-28.5%	8.4%	-11.6%	4.2%	-5.3%
Seattle, WA	$        382,700	12.6%	-32.4%	11.7%	-24.4%	10.7%	-16.8%
Minneapolis-St Paul, MN	$        219,400	5.2%	-7.9%	4.5%	-12.8%	2.1%	4.2%
San Diego, CA	$        506,100	6.0%	-25.5%	5.7%	2.3%	5.2%	3.9%
St. Louis, MO	$        141,900	2.3%	-3.0%	5.5%	-10.9%	5.4%	-6.6%
Tampa, FL	$        163,600	10.3%	-28.1%	8.9%	-20.4%	6.2%	-12.4%
Baltimore, MD	$        244,800	1.3%	-3.9%	1.5%	-3.9%	0.6%	-3.2%
Denver, CO	$        333,500	20.3%	-12.7%	15.7%	5.4%	10.6%	-12.7%
Pittsburgh, PA	$        126,700	2.9%	8.6%	1.8%	1.7%	3.0%	9.3%
Portland, OR	$        322,000	16.2%	-39.5%	14.8%	-38.7%	13.5%	-19.7%
Charlotte, NC	$        159,800	4.3%	-34.7%	5.1%	-34.5%	4.4%	-16.6%
Sacramento, CA	$        339,700	13.0%	-22.3%	8.7%	-21.2%	7.1%	-8.6%
San Antonio, TX	$        150,200	8.2%	n/a	6.7%	n/a	4.5%	n/a
Orlando, FL	$        184,100	7.9%	-23.1%	7.9%	-16.0%	4.7%	-4.8%
Cincinnati, OH	$        143,400	4.0%	-18.2%	3.9%	-20.0%	2.9%	-9.1%
Cleveland, OH	$        125,500	-1.3%	-7.9%	2.5%	-11.0%	2.2%	0.8%
Las Vegas, NV	$        203,200	9.1%	-11.1%	9.2%	-8.3%	5.8%	6.8%
Columbus, OH	$        154,600	4.8%	-24.1%	5.7%	-13.7%	4.2%	-3.0%
Indianapolis, IN	$        130,200	2.9%	-8.7%	2.7%	-22.4%	3.7%	-11.8%
San Jose, CA	$        956,500	10.5%	-14.2%	12.6%	1.5%	12.1%	7.5%
Austin, TX	$        247,500	10.1%	n/a	8.7%	n/a	6.8%	n/a
Virginia Beach, VA	$        210,900	0.2%	1.1%	1.1%	2.4%	1.1%	0.0%

Moms Seeking 'Me' Time This Mother's Day

New Survey Finds Nearly All Mothers Would Appreciate a Special Snack on Mother's Day

This Mother's Day, give the mom in your life exactly what she's looking for – "me time." According to a national poll sponsored by Stacy's Snacks, 71 percent of moms with children living at home say they would appreciate some alone time on Mother's Day. Nearly all moms – 9 out of 10 (91 percent) - say they would also appreciate a snack her family cooked or prepared just for her.

"Our poll shows mom wants a Mother's Day balanced with 'me time' activities and family fun," said Katie Ceclan, senior director of marketing, Stacy's Snacks. "Stacy's is a champion for life's simple-yet-inspired moments from a gourmet breakfast in bed to a thoughtfully prepared snack using mom's favorite foods." 

When it comes to great gifts, mothers say they would like a fun family outing where she's treated like a queen (51 percent) and a handwritten note expressing the family's love and appreciation (42 percent). 

When mothers were asked how they would most like to spend their Mother's Day "me time," they chose a spa treatment (38 percent), watching a favorite movie or TV show (21 percent), catching up on a favorite book or magazine (19 percent), enjoying breakfast in bed (14 percent) or a relaxing picnic lunch (12 percent).

"Why choose one when you can give mom all that she wants?" said Ceclan. "We recommend kicking off her special day with breakfast in bed: A serving tray adorned with hot coffee, fresh fruit and a snack like our cinnamon roll stackers."

The stackers, a recipe from chef Douglas Keane, winner of the James Beard Award and Top Chef Masters, features a delectable combination of toasted pecans, cream cheese, powdered sugar and Stacy's Cinnamon Sugar Pita Chips.

If a family brunch is already in the works, create an opportunity for "me time" in the afternoon with a gourmet snack. Fill a picnic basket with ready-to-eat treats like Stacy's Toasted Cheddar Pita Chips, Sabra hummus, aged cheddar, salami, apple slices and her favorite wine. Include a blanket and some magazines to help make the most of her "me time," whether it takes place in the backyard or a beautiful nearby park.

Coldwell Banker Real Estate Lists the Iconic X-Mansion for $75 Million, Launching an Integrated Marketing Campaign as the Exclusive Real Estate Partner of the Summer Event Movie "X-Men: Apocalypse"

After a long day of saving the world, even the X-Men need a place to call home. That is why Coldwell Banker Real Estate LLC, the original Silicon Valley real estate startup founded in 1906, has joined forces with 20th Century Fox as the exclusive real estate partner of the upcoming summer movie event, "X-Men: Apocalypse," in theaters everywhere May 27.

Marketing campaign includes listing the fictional property, interviews about the home with the film's stars, director and production designer, and content written exclusively for Coldwell Banker® 

The mock X-Mansion listing allows film and X-Men enthusiasts to browse photos and view a video home tour shot on the set of Professor Xavier's School for Gifted Youngsters, the infamous home of the X-Men. The listing includes a description of the 24+ bedroom estate, complete with an automated, state-of-the-art training facility and fully retractable basketball court. Taking advantage of the "Seller Story" feature unique to Coldwell Banker listings, the X-Mansion listing also includes a history and memory of the home written by one of the film's screenwriters.

"Over the last several years, one of our core marketing strategies has been to develop meaningful relationships with new audiences that allow us to showcase the emotional and lifestyle benefits of home and extend our reach beyond traditional real estate advertising," said Sean Blankenship, chief marketing officer for Coldwell Banker Real Estate LLC. "Through this exciting partnership, we are able to tell another awesome story about the meaning of home and transform the way real estate brands are reaching consumers today."

Taking the standard marketing partnership to the next level, Coldwell Banker and 20th Century Fox will develop content promoting the concept of "home," for humans and mutants. In addition to the listing and two Coldwell Banker video ad spots, the brands will also release a behind-the-scenes video filmed on the set of the X-Mansion, teasing the role the home will play in the upcoming film and the rooms that will be featured. This will include interviews with the film's stars, director, Bryan Singer, as well as the film's production designer and supervising art director, all detailing what it takes to bring the mansion to life on the silver screen.

"The X-Mansion is an iconic landmark in comic and film history. Professor Xavier's School for Gifted Youngsters has always represented a home filled with excitement and learning for the X-Men," said Zachary Eller, senior vice president, marketing partnerships, 20th Century Fox. "We're thrilled to work with Coldwell Banker to have some fun with the X-Mansion and give fans a never before seen sneak peek inside the mansion."

Bankrate: Mortgage Rates Post First Increase in a Month

Mortgage rates increased modestly this week, with the benchmark 30-year fixed mortgage rate ticking up to 3.75 percent, according to Bankrate.com's weekly national survey. The 30-year fixed mortgage has an average of 0.19 discount and origination points.

The larger jumbo 30-year fixed stepped lower to 3.67 percent, and the average 15-year fixed mortgage nosed up to the 3 percent mark. Adjustable mortgage rates were higher as well, albeit modestly, with the 5-year ARM increasing to 3.13 percent while the 7-year ARM crept higher to 3.37 percent.   

Mortgage rates reversed last week's move, posting the first increase since mid-March. But the movement was pretty tame as not much changed in the previous week – we saw more mixed news on the economy against the backdrop of economic weakness and accommodative central banks overseas. Still, mortgage rates are at levels that prior to this month would have been the lowest since 2013, so nobody's mortgage refinancing is in jeopardy and nobody is being priced out of the market based on mortgage rates.  With the Federal Open Market Committee meeting next week, don't expect big mortgage rate moves beforehand as markets await the Fed's thoughts on interest rates and the economy.

At the current average 30-year fixed mortgage rate of 3.75 percent, the monthly payment for a $200,000 loan is $926.23. 

SURVEY RESULTS

30-year fixed: 3.75% -- up from 3.72% last week (avg. points: 0.19)

15-year fixed: 3.00% -- up from 2.99% last week (avg. points: 0.16)

5/1 ARM: 3.13% -- up from 3.11% last week (avg. points: 0.20)

Type of Home Renovation Key to Value: Appraisal Institute

The Appraisal Institute, the nation's largest professional association of real estate appraisers, today encouraged homeowners to carefully choose renovation projects in order to maximize their return on investment.


"Home improvement projects are not necessarily investments in which a homeowner should expect a dollar-for-dollar return," said Appraisal Institute President Scott Robinson, MAI, SRA, AI-GRS. "Rather, these projects can increase the likelihood of a sale, or that a property will be comparable to other properties in a neighborhood."

According to Remodeling magazine's most recent Cost vs. Value report, the projects with the highest expected return on investment are attic insulation, manufactured stone veneer and garage door replacement. Other projects with potential payoffs, according to the report, are entry door replacement (steel and fiberglass) and minor kitchen remodel.

View a video of Robinson addressing home improvement tips.

Robinson advised homeowners considering renovation projects to consider if the improvement is in keeping within what's standard in the community.

"Projects that take a home significantly beyond community norms are often not worth the cost when the owner sells the home. If the improvements don't match what's standard in a community, they'll be considered excessive," Robinson said.

He also noted that homeowners may find it best to hold off on big renovations if they're unsure how long they will be in their home. The longer a homeowner stays in a property, the greater the opportunity for a return on investment, Robinson said.

For an unbiased analysis of what their home would be worth both before and after an improvement project, a homeowner can work with a qualified real estate appraiser – such as a Designated Member of the Appraisal Institute – to conduct a feasibility study.

During a feasibility study, the appraiser will analyze the homeowner's property, weigh the cost of rehabilitation and provide an estimate of the property's value before and after the improvement. By purchasing an energy-efficient product or renewable energy system for a home, the owner may be eligible for a federal tax credit based on EPA-established guidelines. (See thecomplete list of eligible products, including program expiration dates.)

The Appraisal Institute offers a free, informative brochure titled "Remodeling & Rehabbing," which provides consumers with valuable advice on home improvement projects.