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February 3, 2020November 23, 2021

Is Upzoning the Solution?

Can zoning be the answer to solving housing shortages and increasing affordability? Many city planners and politicians think so. Although many localities are still considering upzoning ordinances, some have already implemented upzoning amendments that allow increased resident density. The immediate effect is likely to be felt by the addition of housing. However, it’s unclear how and if the additional units will relieve housing prices. Opponents voice concern over potential long-term effects of upzoning in single-family neighborhoods.

What is Upzoning?

A brief description of zoning is given by the National Association of Realtors (nar.realtor) as “laws that affect land use, lot size, building heights, density, setbacks, and other aspects of property use.” Zoning ordinances go back to the early twentieth century as a way to efficiently grow a city while protecting residential neighborhoods from industrial and commercial influences.

Research conducted by G. Donald Jud in 1980 suggests that the absence of zoning (or loose zoning) decreases property value (The Effects of Zoning on Single-Family Residential Property Values: Charlotte, North Carolina; Land Economics; vol.56, no.2, p. 142-154). His study concludes that residential property owners pay a premium for uniformly in land use. Jud writes “One of the principal purposes of municipal zoning ordinances is to protect property owners from the deleterious external effects that may arise when incompatible land uses exist within the same neighborhood.” However, he also states that in the absence of zoning protection, other mechanisms are created, such as neighborhood covenants (e.g. HOA, or civic association).

Herbert S. Swan wrote in 1949 (Economic and Social Aspects of Zoning and City Planning; The American Journal of Economics and Sociology; Vol.9, No.1, p.45-56) that efficient city planning and zoning ordinances can only be measured by their adaption to current conditions. He stated, “Only as they meet basic requirements of present population, and the emerging needs of prospective population, can they be said to serve a community in full measure.”

Swan’s words ring true today, as local governments look to zoning to address housing shortages and affordability. “Upzoning” is the current trend to “meet the emerging needs of the population” to alleviate housing issues. The city of Minneapolis and state of Oregon have already implemented new zoning that essentially eliminates single-family land use in turn for increased density. And the trend is spreading throughout the country. While some localities have gone to the extreme to essential ban single-family development, others are loosening zoning to allow auxiliary dwelling units (ADU). The Virginia legislature is currently considering statewide upzoning legislation.

Earlier this year, the Montgomery County Council loosened zoning requirements for ADUs. Zoning Text Amendment 19-01 becomes effective December 31^st2019. The passed amendment has additional background information, including a brief description of opposition views from residents. Some of the concerns of increased density in single-family neighborhoods included overcrowding in schools and decreased availability of parking. Additionally, there is concern that car-choked streets could impede emergency vehicles. Environmental concerns included uncontrolled water runoff from increased number and size of ADUs. Opponents to the amendment also voiced concern with “the inability of the County to enforce any regulations.”

Montgomery County’s “loosened” zoning amendment is meant to increased density in single-family zoned neighborhoods. In light of resident concerns, the Council allowed direct input from the Montgomery County Planning Board to increase the supply of accessory dwelling units in the county, “while also working to minimize any negative impacts on residential neighborhoods.”

Original article is published at https://dankrell.com/blog/2020/02/03/is-upzoning-the-solution/

By Dan Krell
Copyright© 2020

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

December 29, 2019December 29, 2019

Winter Home Cleaning

Each spring, we talk about cleaning our homes after cocooning during the winter months. The American Cleaning Institute (ACI) publishes an annual survey that reveals how many of us actually do a “spring cleaning,” as well as cleaning priorities and outcomes. However, a winter home cleaning can make your spring a breeze.

According to ACI’s stats from their 2019 survey (cleaninginstitute.org), 41 percent of respondents don’t remember the last time cleaning their refrigerator (4 percent respondents never cleaned their refrigerator). Would you be surprised to know that 23 percent of respondents don’t remember the last time they cleaned their bed linens? Another 16 percent can’t remember the last time they cleaned their guest bathroom toilet. Maybe not a surprise is the 47 percent who don’t remember cleaning their ovens, and the 20 percent who never cleaned their washing machines. Of those who clean, 25 percent believe they don’t clean well, and about 33 percent don’t clean everything in their homes.

Nonetheless, the ACI reported 77 percent (their highest number recorded) of respondents indicated they would be doing a spring cleaning. A majority of respondents indicated their cleaning will take five or more days. Windows take top priority during the spring cleaning, followed by closets/drawers, ceiling fans, curtains, and carpets. Why is spring cleaning a big deal? ACI Senior Vice President of Communications Brian Sansoni stated, “Clearing out the clutter, getting rid of dust and adding some shine. That’s why spring cleaning is such an intuitive activity for so many Americans. We clean things that might not otherwise get cleaned all year long, and we feel happy and satisfied with the results.”

But don’t wait for spring. Any winter home cleaning you do is beneficial, and may reduce the load during your spring cleaning. Additionally, cleaning tasks you do during the winter may also positively affect your health and wellbeing.

One of the best ways to clean is to prevent winter weather dirt and debris from entering your home. Having a large enough heavy-duty entrance mat can help with removing dirty/wet shoes and boots at the door. Consider placing a shoe tray near the front door to place dirty/wet shoes to dry.

Rather than letting dust build up, schedule periodic dusting. Focus on a “healthy home” during your winter home cleaning. Experts recommend removing dust to relieve allergy and sinus symptoms. Dust can build up around door jambs, window sills, hanging pictures, under furniture and appliances. Vacuuming carpets will remove dust and dirt from carpets. Don’t forget to dust hanging fixtures, such as chandeliers and ceiling fans. Don’t forget to change/clean your bed linens to reduce dust mites.

Think hygiene during winter cleaning. Even though it may not be used often, consider deep cleaning the guest bathroom. Odors can remain in trash cans (especially in the kitchen), sanitizing trash cans may eliminate odors and reduce bacterial growth.

We to spend more time indoors during the winter months, and our inertia allows us to collect things. But rather than letting clutter build up for spring, consider beginning your decluttering early. Decluttering is one of those tasks that can be overwhelming and easily put off for another time. But if you think about decluttering logically and create a reasonable plan, your winter decluttering can save you time in the spring. Decluttering is one of those tasks that can be life changing. Some experts believe that decluttering is somewhat of a portal to better health, as it can promote feelings of wellbeing and energy.

Original article is published at https://dankrell.com/blog/2019/12/29/winter-home-cleaning/

By Dan Krell
Copyright© 2019

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December 20, 2019February 8, 2020

More Homes for Buyers?

If you’ve been following the housing market, you know that housing experts have been declaring a home sale inventory shortage since 2013. In NAR’s November 27^th Pending Home Sales Index release, NAR chief economist Lawrence Yun partly blamed October’s 1.7 percent decline to “inadequate levels of inventory across the country.” He stated “There is no shortage of buyers seeking homes, but a lack of available units continues to drag down the nation’s housing market and overall economy.” Essentially, there needs to be more homes for buyers.

However, if reporting holds true, the home sale shortage may be ending soon. The most recent housing permits report indicates that more new homes will be built, while media attention to a “silver tsunami” suggest more homes for buyers will hit the market.

October’s increased housing permits suggest an increase in new homes to be built next year. According to a recent report, housing permits reached a post-recession high (Housing Permits Surge to Postrecession High; magazine.realtor; November 20, 2019). Although permits are just an estimate for future construction, it is nonetheless relevant because, like pending home sales, it gives a hint of the potential for future home sales. Single family permits reached 1.46 million units during October, which is an increase of about 5 percent. October was the second-best month for housing starts this year.

Lawrence Yun, NAR chief economist, stated, “At 1.46 million units on an annualized basis, housing permits are nearly to the level needed for the country over the long haul. Since new-home construction kicks off the chain reaction of people trading up and trading down by buying new and selling their existing homes, more housing inventory will surely show up in the market next year.”

Robert Dietz, the National Association of Homebuilders chief economist, commented about demand for new homes, “The increase in buyer demand is also being driven by lower mortgage rates, which has been helping to lift the pace of single-family permits since April. Solid wage growth, healthy employment gains, and an increase in household formations are also contributing to the steady rise in home production.”

What about existing homes? According to Zillow Research, there will be about twenty million additional existing homes that will be for sale through the mid-2030’s (The Silver Tsunami: Which Areas will be Flooded with Homes once Boomers Start Leaving Them; Zillow.com; Nov. 22, 2019). These home owners are 60 years-old or older, and will eventually sell their home because of health, retirement, relocation, and death. There will be regional differences depending on the number of senior home owners. Zillow indicates that the Tampa and Tucson markets are likely to be affected most.

The “silver tsunami” is not a new concept. It was postulated in a 2012 NAR article The Boomer Effect. The article surmised that since Baby Boomers began turning 65 on January 1, 2011, there would more homes for buyers and that the inventory would overwhelm the market. However, we are still waiting for the tsunami. As it turned out, the post-recession economy significantly changed, as did attitudes toward housing. Multi-generational households increased, and seniors are aging in place.

Will the anticipated increased number of new and existing homes to be sold provide the boost to home sales numbers? Maybe, if the added inventory is attractive to home buyers. It has been clear that home buyers will opt for value in a turn-key home. Home sellers need to keep in mind that home buyers are looking for affordable quality homes.

Original article is published at https://dankrell.com/blog/2019/12/20/more-homes-for-buyers/

By Dan Krell
Copyright© 2019

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December 15, 2019December 15, 2019

New Home or Resale for You?

No matter what items a home buyer has on their wish list, they are typically constrained by the home price. As a result, the buyer is often limited in their choices. Accordingly, buyers prioritize home features and benefits when comparing homes. Deciding between a new home or resale becomes a part of the buying process.

Nonetheless, home buyers often have a choice between a new home or resale. Besides the allure of contemporary design and modern building materials, the benefit of new construction is the minimal maintenance during the first year of ownership. Although many home buyers desire to buy new construction, the combination of their budget and criteria lead them to a resale home.

A resale refers to a home that is being sold by a home owner, rather than the builder. The average age of a resale home can vary depending on the location. It’s not uncommon to find a resale in a new home development. However, when resale comes to mind, most think of homes where they grew up.

Although the home buying budget is a main consideration, there are other reasons why home buyers decide to purchase a resale rather than new construction. One of the main reasons, as stated above, is that the resale fits their criteria for price, location, size, etc. It’s typical to get more house and yard when purchasing an older home, when compared to a new home of similar price. Resale homes tend to be located in established neighborhoods, whereas new home developments’ amenities are often not yet completed.

Regardless, some home buyers are attracted to older homes. It seems as if there is a correlation between a home’s age and the charm it exudes. The older the home, the more likely a home buyer is captivated by its charm. When explaining a home’s “charm,” buyers usually describe a combination of style and craftsmanship. They often refer to the saying “they don’t build them the way they used to.”

Although most home buyers want a turn-key home, some buyers find opportunity in older homes that are in need of repair or updating. These buyers feel they can create a home that meets their needs and lifestyle without breaking their budget.

When buying a resale, don’t expect the home to be perfect, even if the home is relatively new or has been renovated. There is no getting around the fact that living in a home promotes wear-and-tear. Consider that a home is made of many components each having a limited life span. Regular maintenance can prolong a home’s life. However, you will eventually have to replace components and systems.

Resale homes are not maintenance free, and deferring maintenance creates costlier repairs. Experts recommend that you have a repair budget. You shouldn’t just budget for regular maintenance and repairs, you should also budget for future updating. Ask your agent about a home warranty that can help you with repairs on a fixed service-call fee. Get a thorough home inspection. Home building has changed dramatically over the last one-hundred years, so make sure you hire a licensed inspector that is knowledgeable with the engineering and materials in your home. (Keep in mind that home inspectors are not perfect, so there may be a chance of finding conditions that eluded the inspection.) Even if the home appears to be in good condition, the inspection is likely to find items in need of repair. You and your agent can decide on the best negotiating strategy of inspection repairs.

Original article is published at https://dankrell.com/blog/2019/12/15/new-home-or-resale-for-you/

By Dan Krell
Copyright© 2019

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December 5, 2019November 23, 2021

Housing Market 2020

After the unexpected slowdown of existing home sales last fall, most real estate agents had optimism for the 2019 spring market. However, many were surprised by the early spring reporting of mixed housing data (when all indicators should have been positive). Although national stats for spring seemed to be pushing upward, some regional markets didn’t perform as expected (Mid-Atlantic home sales declined at the beginning of the spring). What’s in store for housing market 2020?

Many experts cited a number of factors were to blame for the decrease in sales. Industry experts agreed that the lack of quality homes for sale was a top concern. In hindsight, last fall’s home sale slowdown into spring may just have been an aberration. But it may also have been an indicator that correctly predicting the housing market is increasingly difficult and subject to local factors. Nonetheless, economists have predictions for housing market 2020 .

At this year’s NAR’s 2019 Realtors Conference & Expo (Housing Experts Discuss 2020 Outlook, Housing Innovation at Realtors’ Expo; nar.realtor; November 9, 2019), we heard opposing views about the economic outlook and the housing market 2020 . First, it’s not unusual to hear NAR’s chief economist Lawrence Yun to speak of the housing market optimistically. Although he doesn’t expect a recession next year, he does caution that global economics could impact the US such that it could hamper growth. Yun stated a common assessment by economists, which is that home sale inventory is low. He stated “The U.S. is in need of more new housing…This is an incentive for builders to start more construction. If they do, I think we will have at least 12 consecutive years of economic expansion.”

Contrasting Yun’s economic assessment, Kenneth T. Rosen, chairman of the Rosen Consulting Group, expressed a risk of a recession due to economic trade and politics. However, Rosen conceded that as long as the job market continues to remain strong, the US economy will likely remain robust.

Speaking of jobs and home sale inventory, a recent market assessment by Ralph McLaughlin of CoreLogic (Homeownership Rate Jumps on the Tail of Low Mortgage Rates; corelogic.com; October 29, 2019) indicated that the recent jump in the homeownership rate is an indicator that there is an “upward” trend in home buyer demand. The 1.4 million new home owners in 2019 is a taken as a positive sign that buyer demand remains high, and is expected to drive the housing market in 2020. However, just like earlier this year, low home sale inventory and “underbuilding” could damper next year’s home sales stats.

So, demand for housing will be strong next year, but what about home prices…

Molly Boesel of CoreLogic reported on home sale price growth and expectations for the housing market 2020 (Home Price Growth Regains Momentum; corelogic.com; November 5, 2019). September’s 3.5 percent CoreLogic’s Home Price Index (HPI) increased slightly from August, which continues the six-month increase of home price growth. The steady increase in national home prices indicate a “regained momentum.” CoreLogic forecasts national home prices to increase 5.6 percent for September 2020.

The S&P Case Shiller Home price Index (spindices.com) corresponds with current national home price growth with a 3.2 percent September index, which is higher than August’s 3.1 percent index. However, future home price growth may depend on regional shifts in home sales and job opportunities. Seattle and Las Vegas dropped out of the top four cities, as it was noted the “hot housing markets” are now in the southeast markets of Charlotte, Tampa, and Atlanta.

Original article is published at https://dankrell.com/blog/2019/12/05/housing-market-2020/

By Dan Krell
Copyright© 2019

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