Home values growing at rapid pace
Home values have been rising during the past year. In fact, in major metro areas, values have grown at the fastest pace in two years.
Home values are up 5.5 percent over the past year, according to the September Zillow Real Estate Market Reports. The median value of a U.S. home is now $189,400.
Portland, Dallas and Seattle reported the highest year-over-year home value appreciation among the 35 largest metros across the country. In Portland, home values rose almost 15 percent to a median value of $342,100, the report noted.
"Home values in Dallas and Seattle appreciated 12 and 11 percent, respectively. For the first time, the median home value in Seattle surpassed $400,000 and is now at $401,100.
"Inventory has been falling steadily, with about 4 percent to 6 percent fewer homes for sale over the past several months. However, the bigger driver of home prices is increased demand. Sales have increased substantially since 2011, despite fewer homes on the market."
The result of rising values was also included in the report.
"Bidding wars are commonplace in many housing markets across the country, as multiple buyers compete for the same home."
"Increasingly strong demand has been contributing to dwindling inventory stocks across the nation," said Zillow chief economist Svenja Gudell. "Healthy demand for for-sale homes amid low inventory has been driving the market, which is another sign that the housing market is recovering nicely.
"Buyers in the nation's fastest moving markets can expect the search process to last a few months, as market conditions are often extremely competitive with homes selling for above asking price and receiving multiple offers. It's definitely a seller's market right now, with some homes being more expensive than ever."
Q. What is the average size of kitchens in today's new homes?
A. The average size of a newly built single-family home's kitchen is 161 square feet, or just under 13-square feet. However, some regions tend to offer much bigger kitchens, according to the National Association of Realtors.
"The Middle Atlantic region, which includes New York and Pennsylvania, has the largest average kitchen size at 170 square feet, followed by the South Atlantic, which includes Florida and the Carolinas, at 166 square feet, and the West-South Central region, which includes Texas, at 165 square feet.
"Meanwhile, the smallest kitchens may be found in the West-North Central region, which includes the Dakotas, at 153 square feet.
"While larger homes tend to have larger kitchens, the scale of the increased kitchen size is not proportionate to the overall home," the report notes. "Homes that have great rooms tend to have slightly larger kitchens, but only by an average of 5 square feet."
Q. Are mortgage originations expected to increase next year?
A. Here's a recent report from the Mortgage Bankers Association:
"We are projecting that home purchase originations will increase in 2017, building on an estimated 10 percent increase in 2016. Strong household formation coupled with further job growth and rising wages are among the reasons.
"Also, the continuing home price appreciation will drive strong growth in purchase originations in the coming years," said Michael Fratantoni, MBA's chief economist and senior vice president for research and industry technology.
Q. Are rental returns for investors rising?
A. Not at this point. ATTOM Data Solutions, a housing data firm and the new parent company of RealtyTrac, released its third-quarter 2016 Single-Family Rental Market Report.
It found that average single-family rental returns dropped to a nine-year low for homes purchased so far in 2016 among 473 U.S. counties analyzed for the report.
The average annual gross rental yield - monthly rent, annualized, divided by median home price - among the 473 counties was 8.7 percent for properties purchased in the first seven months of 2016, down from an average of 8.8 percent for the same time period in 2015 to the lowest level since 2007, when the average gross rental yield across the 473 counties was 7.3 percent.
• Email Jim Woodard at storyjim@aol.com.
© 2016, Creators Syndicate