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Tampa and Three California Metros Have the Smallest Gaps in Homeownership by Income Level

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San Jose and San Francisco, among the nation’s most expensive housing markets, have two of the smallest gaps between the homeownership rates of low-income families and the overall population.

Tampa, Florida has the smallest gap in homeownership rates between low-income families and the overall population. That’s followed by three California metros: San Jose, Riverside and San Francisco. While Tampa and Riverside are relatively affordable, San Jose and San Francisco have both seen their median home sale prices surpass $1 million in recent years, far beyond the realm of affordability for many families.

“San Jose’s overall homeownership rate is low due to a lack of affordability throughout the metro area,” said local Redfin agent Kalena Masching. “Prices are so high that homes are often unaffordable even for relatively high income earners, making it so that a software developer is not much more likely than someone in a middle-paying profession to be a homeowner.”  

homeownership gaps

Home prices in both San Jose and San Francisco, located in the epicenter of Bay Area tech wealth, have more than doubled over the last seven years. Prices in Riverside have also more than doubled, though the prices are lower—they have risen from $178,000 to $366,000.

“Some of the metros with the smallest gaps in homeownership between low and higher earners, particularly those in California, are places that have seen rapid home-price appreciation over the last decade,” said Redfin chief economist Daryl Fairweather. “In areas like San Jose and San Francisco, homeownership has less to do with what residents currently earn relative to home prices, and more to do with whether they bought a home several years ago before prices multiplied. And in California, property tax increases are capped below actual price appreciation, meaning it’s often more affordable for residents to stay in homes long term than to move, regardless of current income.”

In Tampa, one potential reason for the small gap is the area’s high rate of homeownership for low-income families. More than half (54.4%) of Tampa-area families earning the bottom 25 percent of income for the metro area are homeowners, the fifth highest rate in the country. That’s likely partly due to the area’s relative affordability: Tampa’s median sale price is $225,000, compared to $287,000 nationally. But while Tampa is inexpensive compared to much of the U.S., home prices in the area have more than doubled in the last seven years, like they have in San Jose, Riverside and San Francisco.

“Tampa is unique in that many of its high-end neighborhoods directly border more affordable areas that are approachable for people earning lower incomes. A good portion of homes in the affordable neighborhoods still have a lot of properties selling for less than $200,000,” said local Redfin agent Brian Walsh. “Some of those areas are close to the beach and downtown, but for people willing to spend a bit of time commuting to work, truly affordable suburban life is approachable for a large group of working families.”

The areas with the largest homeownership gaps  for low-income families are located mostly in the Midwest or on the East Coast, with Columbus, New York, Milwaukee and Buffalo topping the list. Median sale prices in those areas have gone up in the last seven years, though not as quickly as they have in the California areas. In Columbus and Buffalo, median sale prices are $195,000 and $145,000, respectively, each up roughly 50 percent since the beginning of 2012. In Milwaukee, the typical home sells for $190,000, up from $173,000 in October 2014, the first month for which data is available. And in New York City, the average sale price of a home in the fourth quarter of 2018 was $938,000, up from $775,000 in the fourth quarter of 2012, per the Real Estate Board of New York (REBNY).

“Historically, Americans accumulated wealth through homeownership, which helped lessen the class divide between low- and high-income families,” said Fairweather. “But the housing affordability crisis we face today prevents many low-income families from achieving that piece of the American Dream. There are still some affordable metros, like Tampa and Charlotte, that have high homeownership rates not only for the overall population but specifically for low-income families. For those metros, there isn’t as much class disparity between who benefits from a prosperous economy.”

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March Madness 2019: Real Estate Edition

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March Madness 2019 Graphic

One of the most exciting events in all of sports, March Madness 2019, just began. For those of you who may not know, March Madness—also known as the NCAA Tournament—is a single elimination tournament comprised of 68 men’s Division 1 college basketball teams and takes place between March 19 and April 8.

For this year’s March Madness, Redfin has pitted the real estate markets of twelve teams against one another to see how the hometowns of these rivals stack up. So throw on your alumni gear, fill out your bracket, and place your bets, it’s time for March Madness: Real Estate Edition.

The Teams

  1. Gonzaga Bulldogs
  2. Duke Blue Devils
  3. Kentucky Wildcats
  4. Michigan Wolverines
  5. LSU Tigers
  6. Houston Cougars
  7. Buffalo Bulls
  8. Maryland Terrapins
  9. VCU Rams
  10. Washington Huskies
  11. Minnesota Golden Gophers
  12. Northeastern Huskies

The Categories

  1. Compete Score™
  2. Average home sale price
  3. Average price per square foot
  4. Average days on market
  5. Walk ScoreⓇ
  6. Bike ScoreⓇ
  7. Transit ScoreⓇ

Round 1 – Competition

Maryland                                  88
VCU & Northeastern          86

With a Compete Score of 88, Maryland’s home of College Park comes out on top in Round 1, defeating the housing markets of both VCU’s Richmond and Northeastern’s Boston, which both tied for second. While the runner-ups have very respectable scores, it wasn’t enough to beat Bruno Fernando and the Terps.

Compete Score is Redfin’s proprietary metric that helps homebuyers understand how challenging it is to get a home under contract in a given market. The higher the score, the more likely a homebuyer is to encounter a bidding war and to have to use strategies like waiving the inspection or financing contingency in order to get their offer accepted.

Round 2 – Average Sale Price

Washington            $670,000
Northeastern         $610,000

In Round 2, we see two Huskies battle it out, leaving the Washington Huskies and the Seattle market to claim their first victory over Northeastern in Boston. Boston may have a high average sale price of $610,000 but that’s nothing compared to Seattle, host to one of the highest home sale prices in the country.

Round 3 – Average Price per Square Foot

Northeastern     $504 / square foot
Washington        $442 / square foot

Immediately avenging themselves, the Boston-based Northeastern Huskies defeats the Washington Huskies’ Seattle market in a decisive $62 margin of victory. In doing so, they also manage to sail over the tightly contested housing markets of Maryland and the Ignas Brazdeikis-led Michigan, who themselves were neck and neck at $213 and $211 per square foot, respectively.

Round 4 – Shortest Average Time on Market

Northeastern, VCU, & Buffalo       25 Days
Maryland                                                  27 Days

With the average home spending just 25 days on the market, Buffalo has claimed its first victory, tying with both housing markets of Northeastern’s Boston and VCU’s Richmond, with all three claiming a narrow victory over the Maryland Terrapins.

Round 5 – Walk Score

Northeastern       81
Washington          73

Considered one of the most walkable cities in the nation, Northeastern’s Boston easily walks away with the win, defeating Washington for the second time. Boston can thank their victory primarily to its lack of hills and the very walkable North End and Bay Village neighborhoods, both of which boast Walk Scores of 98.

Round 6 – Bike Score

Minnesota            82
Washington         70

The Minnesota Golden Gophers come away with their first win thanks to their hometown of Minneapolis being one of the most bikeable cities in the country. Easily edging out Washington, Minneapolis can also boast the second largest number of bike commuters in the USA (right behind Portland, OR).

Round 7 – Transit Score

Northeastern       72
Washington          60

Once again defeating Washington’ Seattle market, Northeastern’s housing market of Boston has managed to secure another win in what has become a battle of the Huskies. Measured by the amount of public transportation available in an area and the distance to which the average commuter can travel in 30 minutes, Boston owes their score to an impressive 113 bus lines, five light rails, three subways, and two ferries!

Northeastern Wins!

In an impressive display of dominance, Northeastern’s home city of Boston, MA has won four of the seven housing market categories. While this result would be the upset of the century should it occur in this year’s March Madness, Boston’s strong seller’s market is one of the best in the country and, clearly, amongst the NCAA Tournament competitors as well.

Methodology for choosing teams

Criteria for selecting the twelve teams were based on:

  1. If the team is competing in March Madness 2019
  2. The hometown of each team ranked among the highest for each category considered

Methodology for choosing categories

In keeping with the spirit of competition, these categories were chosen as a means of determining which school is located in the most competitive seller’s market. In all but one category (shortest average time on market), the highest score wins the round.

The data was pulled on March 18, 2019, and is subject to change over time.

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Together, Lyft’s Employees Could Buy Every Single Home for Sale in San Francisco With Their IPO Cash

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San Francisco already has sky-high home prices and a lack of inventory. Public offerings from Lyft and other tech companies is likely to put even more pressure on its real estate market.

With the wealth created through Lyft’s upcoming IPO, current and former employees of the ridehailing business could purchase every single home listed for sale in the company’s hometown of San Francisco in cash—and still have $100 million left over.

Based on a public offering price of $65 per share, the midpoint of the range Lyft set on Monday, current and former employees hold $1.397 billion worth of stock in the company. For the following analysis, we calculated how much Bay Area real estate that money could hypothetically buy based on list prices of homes for sale as of March 19, 2019 and assuming buyers pay all cash.  

If all $1.397 billion of the total stock wealth were to go into the San Francisco Bay Area real estate market once Lyft goes public (and the IPO lockup period ends), current and former employees would be able to buy:

  • All 624 homes for sale in the city of San Francisco for $1.3 billion, with roughly $100 million left over.
  • Nearly half of the least expensive homes for sale—2,224 homes—in the San Francisco-Oakland-Hayward metropolitan statistical area for $1.36 billion.
  • The top 2% of homes for sale by list price—100 homes—in the San Francisco-Oakland-Hayward metropolitan statistical area for $1.27 billion.
  • Nearly one-third of the least expensive homes for sale—3,120 homes—in the entire Bay Area (the San Jose-San Francisco-Oakland combined statistical area) for $1.35 billion.
  • The top 0.7% of homes for sale by list price—77 homes—in the entire Bay Area (the San Jose-San Francisco-Oakland combined statistical area) for $1.35 billion.
Bay Area map

The fact that current and former Lyft employees could hypothetically purchase every single active listing in San Francisco with their upcoming stock wealth is representative of the huge impact this year’s tech IPOs could have on the Bay Area housing market. Lyft is just the first of several San Francisco-based tech companies that may go public this year, with filings from Uber, Slack and Pinterest expected to come down the pipeline soon and Airbnb rumored to go public sometime in 2019 or 2020.

With a median home sale price of $1.3 million, San Francisco is the most expensive large housing market in the U.S. and it could become even more costly with the influx of liquid wealth being created with this year’s tech IPOs. And the city’s housing supply, already relatively low—for the sake of comparison, 624 homes are currently for sale in San Francisco versus 1,491 in the city of Seattle, which has a slightly smaller population—could fall even further.

“San Francisco is already experiencing a crippling housing shortage. Outdated zoning regulations have stifled construction of new multi-family units, so there just isn’t enough housing for everyone,” said Redfin chief economist Daryl Fairweather. “The influx of cash brought by the upcoming Lyft IPO will put even more pressure on home prices in San Francisco and the Bay Area as a whole.”

Bay Area IPOs Could Also Impact Other Real Estate Markets

The San Francisco Bay Area topped the list of metros people were looking to leave in the fourth quarter of 2018, with 23.8 percent of local Redfin.com users searching for homes outside the metro area. Of the Bay Area-based Redfin users searching for homes outside the metro, the most popular destination was the Sacramento metro area, where the typical home sells for $385,000. The most popular out-of-state destination was the Seattle area, where the typical home sells for $546,000. Of Bay Area-based Redfin users looking for homes, 18.7 percent were searching in Sacramento and 15.9 percent were searching in Seattle.

If the recipients of Lyft’s IPO wealth were to purchase homes outside San Francisco, their cash could have an even more dramatic impact on the real estate markets that are popular with people looking to leave the Bay Area.

If all $1.397 billion of the stock wealth were to go into the Sacramento real estate market, current and former Lyft employees could purchase all 1,173 homes for sale in the city of Sacramento for $526 million, with roughly $870 million left over. They could buy 99 percent—1,477 homes—of all homes for sale in Seattle for $1.31 million.

“We’ve seen more and more people looking to leave the Bay Area, and this year’s IPOs could accelerate that trend and potentially push home prices up in other parts of the country too,” Fairweather said. “Some employees from Lyft and other tech companies still won’t have enough cash for a down payment on a typical San Francisco home, and they may leave the area to buy a home in more affordable West Coast areas like Sacramento, Seattle or Portland.”

Methodology

For this report, we used Lyft’s S-1 filing, combined with Redfin data, to determine the number of homes (single-family homes, townhouses and condos) current and former Lyft employees could hypothetically purchase with their stock wealth once the company conducts its initial public offering. Current and former Lyft employees held approximately 8,600,322 shares underlying RSUs that will have satisfied vesting conditions upon the IPO’s completion and that will be left after obligatory tax withholding in connection with vesting. We multiplied the number of shares by $65, the midpoint of Lyft’s proposed public offering price range of $62 to $68, to get $559 million. Current and former Lyft employees also hold $838.7 million worth of vested stock options as of December 31, 2018. $559 million + $838.7 million = $1.397 billion. We looked at all of the active listings in the city of San Francisco, the San Francisco-Oakland-Hayward metropolitan statistical area and the San Jose-San Francisco-Oakland combined statistical area. Then, we took the aggregate value of the Lyft stock wealth and created a running total of list prices in each of those regions until the $1.397 billion was exhausted. We repeated the process for the city of Seattle and the city of Sacramento.

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Want Outdoor Space? These Are the Top 10 Cities to Find a Home with a Deck

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It’s the first day of spring and Ocean City, NJ tops our list of the most–decked out–metro areas.

 

Hurray, we made it! It’s the first day of spring, and while most of us may still be sporting winter parkas and facing a threat of snow, the end is at least in sight. Slowly but surely, temps will start to thaw nationwide and the bridge to summer draws nearer. And as that mercury climbs, so does our desire to be outside.

Coveting an outdoor space to call your own? Perhaps a peaceful backyard deck? We looked at the top 10 metro areas with at least 100 homes for sale and ranked them according to the prevalence of the word “deck” in home listing descriptions. These are the top metro areas for homes with decks, just in time for spring:

Top Places for Homes with Decks

Metro Area Percentage of Listings Mentioning ‘Deck’
Ocean City, NJ 49%
Barnstable Town, MA 43%
Wausau, WI 41%
Des Moines, IA 40%
South Bend, IN 39%
Duluth, MN 37%
Santa Cruz, CA 36%
Asheville, NC 35%
Burlington, VT 34%
Worcester, MA 34%


Interestingly, the data shows decks are most common in somewhat unexpected areas. Only one sunny spot in California made the list. Most of the top 10 was filled with colder inland and East Coast cities, perhaps a nod to the fact that cities with harsher climates are also places that greatly appreciate the turn of temperatures come springtime.

For while long walks and leafy parks are always a good bet, there’s something extra sweet about savoring the first sign of warmer air from the comfort of your own home. Whether sipping coffee on a terrace, or firing up a grill on the deck, homes with outside amenities are about to be in even higher demand.

Feel like getting decked out? Check out one of our favorites from the list:

383 Commerce Rd

Barnstable, MA
List price: $1,445,000
This stately Cape Cod Colonial is impressive in its own right, with five bedrooms, a chef’s kitchen, home gym and prime position overlooking signature Cape marshland. But the outdoor space is the crown jewel, with a private upstairs terrace off the master suite, complete with a hot tub for warming up chilly nights. There’s also a full covered backyard deck downstairs, fit for entertaining or resting sandy toes after a dip at the beach. Even still, atop the third floor, find a Widow’s Walk connected to the cherry wood-paneled library, for unparalleled ocean views.

 

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Bobby Berk, of Queer Eye, Reveals How He Found His Dream Home with Redfin

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Finding a place to call home has always been a dream for me and my husband, Dewey. It’s been a very long time coming, and to finally be in a home that feels like our own is something I am so excited about. We used to walk up and down neighborhood streets, hand-in-hand, looking at all the houses, imagining and dreaming of a time when we would be in our own home together.

As a designer, I feel nesting and settling into wherever you live is so important. Although I’ve done that with every new address, there is no better feeling than creating that space for my family, in a home that is all our own. Dewey and I finally have our place, our address, and our home together.

But finding that perfect home, in the perfect neighborhood, with the perfect…well…everything can be daunting and stressful. Especially when you’re in a different state like I was while filming Netflix’s Queer Eye. As one of the Fab Five, our shoot days were long and our schedules were very busy. This is where Redfin came in to help. I’ve always loved perusing Redfin.com and the Redfin app (and open houses when I was in town), but when we were actually ready to start our search and buy, Redfin became my go-to place to really dive deep and search for a home that made sense for us. Watch our home-buying story on video here!

Redfin Found Our Dream Neighborhood

We’re now proud residents of East LA, though we didn’t know we wanted to live there when we started our home search. We knew that we were ready to be in a home vs. an apartment, as we had previously done. We used to live in New York and craved an actual home. It was a big part of the reason why we moved to LA in the first place, where single family homes are more common. For that reason, we didn’t want to live in downtown LA, which while wonderful, is comprised of mostly apartments and condos. We dreamt of a house on the hill with views, a pool (which is coming very soon), and a beautiful outdoor space. We now finally have all of that in East LA, and this neighborhood feels like it has always been home.

With the Redfin app, we were able to physically draw circles around all the hills in LA where we knew we might want to live. The app then specifically searched in those areas for houses matching our criteria. We love the east side of LA with its neighborhoods and eclectic, artistic vibes. But we weren’t sure exactly where in the area we wanted to be. The app allowed us to circle multiple areas to help us find the perfect spot. The app also automatically sent emails with listings matching our search settings, meaning I didn’t have to constantly swipe through listings several times a day. Instead, I could quickly browse an email of pre-selected houses in one place.

Once You Know Where You Want to Live, Make a Wish List. Here was Ours:

  • A home with a view on a hill: We’ve both lived in New York and downtown LA and knew we wanted to finally have an actual house with views and some property to spread out. We also wanted to be on a hill so that we not only had a view, but would be positioned above, and away from, major streets below.
  • A home I could make my own: With my busy schedule, I knew I didn’t have time to worry about the kinds of issues that often come up with an older home. And while I loved the character of some of the older houses, we opted for a new home that wouldn’t require a ton of work, and would be a blank canvas for me to make changes over time as we settled in.
  • Plenty of space both indoors and out: We wanted to feel like we had space to roam (both inside and out). Our new house has multiple decks, with accordion-style doors and windows that can be folded back to open the entire space to the outside. With LA’s sunny weather, this feature meant we could enjoy twice the amount of space.
  • Lots of light: Everyone says they want natural light in their home, but I really meant it. It was so important to me, and our house has so much natural light pouring in due to its location and floor to ceiling windows.
  • An office space: With all the travel I do, I wanted to have a home office so I don’t always have to commute back and forth to my current office in downtown LA. It makes a huge difference when I only have a few days in town before heading out again.
  • A space for guests: Our friends always want to visit LA, and we wanted to make sure we had a few extra rooms so that when friends or family are in town, everyone has a place to crash.
  • A pool: LA is sunny 365 days a year (well almost) and we really wanted to be able to enjoy the warm weather with a pool. We don’t have one quite yet, but the lot and the house was already perfectly set up for the addition of a pool (which is coming very soon).

Redfin’s Technology Made Buying Seamless While Filming

They always say that you find love when you’re not looking–as if Kismet brings it into your life–and that is what happened with our home. With everything going on with filming and promoting Queer Eye, my schedule didn’t allow me to constantly search for newly available homes. But that was okay—because Redfin did the work for us.

We were able to set our search limits and desired home features, and then Redfin found us all the matching homes. Every time I received an email and notification on the app fitting our criteria, I’d easily forward it on to Dewey.

The app also intuitively knew what we would love based on listings saved in our favorites. That’s how we found our home. It was perfect, and right in front of us, thanks to Redfin technology.

To be honest, I’d almost given up on finding a home based on previous attempts. I was out of the state and so busy filming, and not seeing anything  I loved. Then, one day, this home (our home) appeared as a new home on the market fitting into our criteria and I thought, “this is our house!”

Our Redfin Agent Was Our Advocate

Almost the entire time I was looking for a house, I was filming in Kansas City. What made the Redfin app so great, and what made it so easy to buy a home was, I could communicate through the app with my husband and my Redfin agent. I didn’t have to make a list of houses I liked, the app did it for me. I instantly hit “share” to text listings to my husband. He said, “Yes. Let’s go see it. I love it. The views, the outdoor space.”

When we found one we liked, I hit “contact agent” through the app and it automatically messaged Nadine, a local Redfin Agent. The process was so seamless and she was able to schedule a home tour within the very short time frame I was going to be in town. From the moment I got in touch with Nadine, the process was simple and every single question or concern I had was answered.

Redfin paired me with a trusted local agent like Nadine, who is truly an expert in the neighborhood. She and other agents can help educate buyers on the latest market trends, other homes for sale, ones that recently sold, and how long homes typically stay on the market. She even recommended her favorite coffee shops and restaurants in the neighborhood!

Nadine came to us directly through the site and was our advocate and friend throughout the entire process. We could not have done it without her. From start to finish, Nadine helped us find and secure our perfect home. Even after the home closing, she stepped in to assist when we found a small leak. She reached out to the contractor that built the home to get it fixed for us.

Home Sweet Home

With Redfin, buying a home wasn’t the big scary ordeal I thought it would be. The ease the app brings in buying a home is something I haven’t found anywhere else. All you have to do is log into the app, select your filters, and get matched with an agent who’s on your side. That agent will guide you through the offer, negotiation, and closing process, and a few weeks later, you have a house. So easy!

We now have our house on the hill with the view, and I can’t wait to make it our own. Home buying can be scary and intimidating, but Redfin made the process so simple. I honestly don’t think we would be in this house or neighborhood without it. Our house will soon be our home and that is something that I cannot wait for.

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Eliminating Single-Family Neighborhoods in Minneapolis is Less “Revolution,” More “Smart Evolution”

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As population has begun to surge in Minneapolis, the city gets ahead of a potential affordability crisis in a way that other cities should emulate.

Minneapolis made national headlines in December when the City Council voted to completely eliminate exclusively single-family zoning throughout the city. This means that neighborhoods where new construction was previously limited to one single-family home per lot are now also open to the construction of duplexes and triplexes (two- and three-family homes). The move is part of a larger plan called Minneapolis 2040 that seeks to address a broad variety of issues including population and job growth, public health, the environment, and housing affordability.

Minneapolis is now the first major city in the United States to entirely eliminate single-family zoning. “It is a bold step by Minneapolis to end a policy that has historically contributed to segregation and inequality along economic and racial lines,” said Redfin chief economist Daryl Fairweather. “Eliminating strict zoning restrictions citywide rather than attempting to change regulations neighborhood by neighborhood is perhaps the most fair and efficient way to make room for healthy growth.”

The zoning change came just a month after another milestone: In November (latest data available from the Census Building Permits Survey), the share of permits to build single-family homes fell below 50 percent of total building permits in Minneapolis for the first time ever, following a general downward trend for most of the past decade.

Percent of Permits Single-Family in Minneapolis, MN

Eliminating single-family zoning in Minneapolis looks less like a revolution and more like smart evolution of a growing city that is doing a lot of things right.

As of 2017 (the latest year with income data available from the Census Bureau), a household in Minneapolis earning the median $55,270 income would spend just 19 percent of their monthly income on the mortgage payment of a median-priced $235,000 home. In Seattle, it’s double that: 38 percent, and in San Francisco it was a whopping 62 percent. Typically housing is considered affordable when it takes no more than 30 percent of your income.

In fact, Minneapolis is already one of the most affordable major cities in the U.S., as more than four out of five homes for sale in 2018 were affordable to locals earning the median household income. Minneapolis is also one of the cities with the highest rates of homeownership for low-income families.

Before the change, more than half of Minneapolis was zoned for single-family housing only. Now, homes as large as duplexes or triplexes will be allowed in all neighborhoods, tripling the potential capacity of the formerly single-family zones and doubling the city’s overall housing potential.

It’s easy to see why leaders in Minneapolis have been feeling pressure to expand the city’s capacity for housing. After nearly a decade of stagnation, the city’s population began growing rapidly in 2011, up 11 percent (41,000 people) between 2010 and 2017.

Over the last four years, the number of homes for sale on the market in the fall has dropped an average of 10 percent per year in Minneapolis, while home sales have risen as much as 7 percent per year as the population booms. As a result of this imbalance in supply and demand, home prices have risen an average of 7 percent per year since 2015.

Minneapolis, MN Population

The change comes at a critical time for the city. Although house prices in Minneapolis are currently lower than the national median, they have grown at a faster rate–up 8 percent year over year as of February–than in several other major cities with larger populations and less affordable housing.

Median home price and 12-month year-over-year growth in select cities

As of February 2019

City Year-Over-Year Change (12-mo avg.) Median Sale Price (all residential)
Atlanta, GA 8.7% $275,000
Memphis, TN 8.3% $128,000
Milwaukee, WI 8.3% $127,000
Phoenix, AZ 8.3% $252,000
Minneapolis, MN 7.8% $260,000
Boston, MA 7.5% $590,000
Denver, CO 7.3% $400,000
Raleigh, NC 7.3% $275,000
Philadelphia, PA 6.2% $185,000
Los Angeles, CA 5.8% $670,000
San Francisco, CA 5.5% $1,311,000
Seattle, WA 5.0% $675,000
Washington, DC 4.0% $570,000
Portland, OR 3.0% $423,000
Chicago, IL 1.7% $265,000
Dallas, TX -0.6% $300,000
National 4.3% $287,000

It remains to be seen exactly how this change will play out, but as demand for housing in Minneapolis continues to grow, enabling and encouraging the supply of housing to grow along with it is likely to help moderate home price growth in Minneapolis and avoid an extreme affordability crisis like the situations in San Francisco and Seattle.

Homebuyers are generally in favor of the policy change. “I talk to most of my homebuyers about the shift in zoning,” said local Redfin agent Dan Caudill. “It’s generally favorably received as a progressive and reasonable way to go forward. Our customers feel that Minneapolis is a desirable area and they’re not worried about the change in zoning affecting future home values. It’s a smart plan that will increase housing density and expand the Minneapolis workforce in a way that will help the city grow in a healthy way and keep commutes under control.”

According to MinnPost, “about three-fourths of the city’s population live in neighborhoods zoned primarily for single-family homes or small multifamily housing.” That’s about 138,000 households, based on 2017 Census estimates. If 5 percent of the single-family homes in these neighborhoods were replaced with duplexes and 5 percent with triplexes, that would result in an additional 20,750 homes–enough for an additional 47,500 people to live in the city. That’s more than the total population growth in Minneapolis between 2010 and 2017, even without accounting for growth in higher-density parts of town.

Even a more dramatic increase in housing under this change would not take as much new development as you might think. In a block of 20 single-family homes, replacing just three single-family homes with duplexes and one with a triplex would increase the total housing by 25 percent. Here’s how a 25 percent increase in housing might look like evenly-distributed across a mostly single-family neighborhood with 1,400 homes (source: Alfred Twu).

Evenly Distributed Increase of 25 Percent More Density

Of course, while keeping affordability in check is a huge benefit, increasing density does involve trade-offs. The lack of private yards can be a turn-off for young families, which could drive them to neighboring St. Paul, that still have neighborhoods exclusive to single-family homes, or to other parts of the country. On the flip side, higher-density communities tend to rely more heavily on shared public spaces like parks to satisfy their need for outdoor space, which has its own benefits such as increasing interactions between neighbors and bringing together people of different socioeconomic backgrounds.

Duplexes and triplexes aren’t for everyone, and this change doesn’t mean that whole neighborhoods will suddenly double or triple their density overnight. But, more housing choices and more housing overall is definitely a good thing and will allow Minneapolis to grow smartly.

The post Eliminating Single-Family Neighborhoods in Minneapolis is Less “Revolution,” More “Smart Evolution” appeared first on Redfin Real-Time.

In Microsoft’s Hometown of Redmond, WA, Just 22% of Homes Are Affordable to Its Own Engineers—The Company’s Affordable Housing Pledge Could Help Change That

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Microsoft’s $500 million commitment to affordable housing could help ease the Seattle area’s affordability crisis and make way for more diverse communities.

When Microsoft announced its $500 million commitment to affordable housing at the beginning of the year, the company acknowledged that even tech workers in the Seattle area can have a hard time purchasing a home. That’s especially true in Seattle’s Eastside suburbs where Microsoft is headquartered: Less than 25 percent of homes for sale in Redmond, Bellevue and Sammamish are affordable on an average Microsoft software engineer’s salary and less than 11 percent are affordable on a local median income.

Below is a breakdown of affordability in cities throughout King County, with the cities that will receive Microsoft’s initial investment in middle-income housing bolded. The list is ranked by the share of homes affordable on a median King County income, from largest to smallest.

City Median list price of homes for sale (1/1/2018 – 3/10/2019) Median monthly mortgage payment on homes for sale Share of homes for sale affordable on the average base salary for a Microsoft engineer in the Seattle area (1/1/2018 – 3/10/2019) Share of homes for sale affordable on the median King County household income (1/1/2018 – 3/10/2019) Drive time to Microsoft HQ in Redmond, WA (mins) (from Walk Score API)
Federal Way $369,950 $1,824 89.8% 68.4% 45
SeaTac $385,900 $1,902 86.3% 62.5% 29
Auburn $399,950 $1,972 87.3% 55.8% 39
Enumclaw $405,950 $2,001 78.3% 55.5% 60*
Des Moines $400,000 $1,972 80.8% 55.0% 35
Tukwila $399,950 $1,972 87.9% 54.9% 25
Covington $420,000 $2,070 83.7% 51.8% 45
Kent $424,990 $2,095 84.7% 49.2% 31
Burien $449,000 $2,213 79.7% 43.7% 30
Renton $498,000 $2,455 67.2% 33.6% 21
Black Diamond $499,950 $2,464 73.1% 25.0% 54
Bothell $695,000 $3,426 38.4% 25.0% 20
Maple Valley $499,950 $2,464 65.7% 23.6% 47
Shoreline $599,000 $2,953 48.1% 17.9% 25
Kirkland $788,500 $3,887 28.4% 17.3% 14
Kenmore $679,870 $3,351 33.3% 16.5% 26
Newcastle $800,000 $3,944 23.3% 14.2% 23
Issaquah $750,248 $3,698 29.6% 14.2% 22
Seattle $695,000 $3,426 34.9% 13.4% 16
North Bend $662,350 $3,265 36.8% 11.9% 39
Lake Forest Park $675,000 $3,327 31.7% 11.6% 30
Woodinville $850,000 $4,190 20.3% 11.2% 22
Redmond $849,500 $4,188 21.7% 10.6% 6
Bellevue $904,013 $4,456 19.2% 9.2% 12
Snoqualmie $696,668 $3,434 30.6% 8.7% 37
Sammamish $939,000 $4,629 15.0% 6.9% 21
Duvall $649,000 $3,199 35.9% 6.6% 31
Carnation $670,000 $3,303 36.6% 5.7% 32
Mercer Island $1,650,000 $8,134 8.9% 4.2% 24
Normandy Park $722,500 $3,562 27.4% 3.4% 36

*According to Google maps

Nearly half of Microsoft’s $500 million commitment is directed at developing middle-income housing, starting in Seattle’s eastern suburbs, a move that could make homes in Microsoft’s backyard more affordable to its own employees.

The price of a typical home in the Seattle area has more than doubled in the last seven years. In contrast, the median household income in the Seattle area rose about 15 percent from 2012 to 2017 (the last year for which numbers are available). Home prices rising faster than wages is contributing to an affordability problem throughout most of the Seattle area, where it has gotten more and more difficult for low- and middle-income residents to afford housing, especially housing that’s close to where they work.

The affordability gap is partly due to local tech companies’ growth. They’re adding high-paying jobs and bringing skilled workers and immense prosperity to the area. As a result, many parts of Seattle and its suburbs that were once affordable are no longer within reach for most middle-class residents. Microsoft’s affordable housing pledge was made partly to address its role in the issue. The commitment consists of $25 million in donations to programs combating homelessness in the area, $250 million in market-rate loans to build affordable housing for low-income families and $225 million in below-market-rate loans to develop middle-income housing (targeted toward those earning $62,000 to $124,000 per year).

The loans for middle-income housing will initially focus on Redmond, Bellevue, Kirkland, Issaquah, Sammamish and Renton. As you can see in the table above, in five of the six cities where Microsoft is directing its investment in middle-income housing, less than 30 percent of homes for sale are affordable on the typical salary for a software development engineer at Microsoft—and less than 20 percent are affordable for households earning the median income for King County. Note that a higher share of homes are affordable on a single Microsoft software engineer salary than the median household income for all of King County.

To come up with the share of homes affordable on a median King County income, we used the annual median household income for King County, which was $83,571 in 2017 (the most recent year for which the data is available). For the share of homes affordable to the typical Microsoft software engineer in Seattle, we used the Glassdoor average base salary of $116,494. The portion of homes affordable for each category is based on the general rule that homeowners should spend no more than 30 percent of their monthly gross income on housing and assumes a 20 percent down payment, a mortgage interest rate of 4.37% (the average for February 2019) and a 1.125% property tax rate.

Pressure on the Eastside Housing Market is Rising as Tech Companies Increase Their Presence

The Eastside suburbs are more accessible to Microsoft engineers than to the general King County population. But most of them—especially Redmond, Bellevue and Sammamish—are on the high end in terms of list prices and monthly mortgage payments, and they may be poised to become even more expensive, thanks to Amazon and Facebook potentially adding thousands of employees in the Eastside suburbs.

Kathi Kelly-Billings, a Redfin agent who specializes in the Eastside, said many of her homebuying clients work for tech companies such as Microsoft and Amazon. “Homebuyers these days are savvy. They’re mindful of their money and watch the real estate market closely. In some ways, affordability is personal and subjective,” she said. “Some of my clients on the Eastside, both single- and double-income families, end up buying at a lower price point than what they are approved for because they don’t want to max out their monthly expenditure. And some choose to make a longer commute to a more affordable city, like Bothell, to get a larger home for the same amount of money. But most of my clients who work for large tech companies are able to afford a home somewhere in the greater Seattle area.”

Microsoft’s loans, particularly those made with an eye toward developing middle-income housing, could help alleviate some of the pressure on the Eastside suburbs. Although Microsoft’s commitment is unlikely to push down home prices in the Seattle area, it could help mitigate the rise of prices and add inventory.

“Tech companies have to work really hard—usually by increasing salary and benefit packages—to attract workers with in-demand skills like software engineers, machine learning scientists and executives,” said Redfin chief economist Daryl Fairweather. “But these sought-after job candidates also care about being able to find housing and seek out communities with good access to education, healthcare and other amenities that require all different types of professionals, like teachers, nurses and non-profit employees, who aren’t officially part of the tech workforce. Microsoft is making a long-term bet that investing in the livability of communities where Microsoft employees live will pay dividends far into the future.

If Microsoft’s commitment is successful in catalyzing the construction of low-income housing throughout the Seattle area, it could also help curb socio-economic segregation. Cities in southern King County like SeaTac and Federal Way tend to have lower median incomes and lower-priced homes. Loans to build houses across King County, not just in low-income areas that already have relatively inexpensive options, could contribute to more affordable housing in historically high-priced areas like the city of Seattle and the Eastside suburbs. Income diversity in cities and neighborhoods can lead to greater economic mobility for residents.

The post In Microsoft’s Hometown of Redmond, WA, Just 22% of Homes Are Affordable to Its Own Engineers—The Company’s Affordable Housing Pledge Could Help Change That appeared first on Redfin Real-Time.

How to Build a DIY Fire Pit for Your Backyard

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Adding a DIY fire pit to your backyard is an excellent way to keep the fun going long after dark.

Instead of an unsightly dirt fire pit, spend a day making a new statement piece for your yard. If you’re wondering how to build a fire pit — we’ll show you how!

When selecting and building your DIY fire pit, make sure you avoid using wet stones. If you are using river rocks, be sure to give them several days of direct sunlight to properly dry.

1. In-Ground DIY Fire Pit

The in-ground fire pit is becoming increasingly popular among DIY fire pit builders. Before digging into the ground, make sure you call 811, the federally mandated “Call Before You Dig Number.” Someone will come to mark the approximate location of any underground lines, pipes, and cables so you can dig safely. Once you dig your fire pit to the desired size, line the dirt walls with stones or brick. Follow these additional steps to get started:

  1. First, want to create a bottom layer of gravel, then cover it with the “bottom” of your fire pit — larger stones or bricks or an even covering such as quick drying cement.
  2. Be sure to have drainage or it will turn into a mosquito pond.
  3. Create your top rim by making small cutouts in the dirt for your bricks or stones.
  4. Finally, dry stack your desired additional layers, or create a small wall using fire resistant adhesives or quick drying cement.

 

2. Overlaid Stone DIY Fire Pit

For an artistic-looking fire pit, instead of evenly shaped bricks, grab several unique rough rocks, and construct an overlaid stone fire pit. If your pieces are hearty enough (pictured is Pennsylvania Blue Stone) you won’t need any cement for this pit either — but use common sense when building up your walls. Here are some additional tips to secure your structure:

  • If the stones do not feel secure, add in some non-flammable masonry adhesive, landscape adhesive or Liquid Nails.
  • For the center, line the bottom of your fire pit with one or two inches of sand.
  • The outside of your fire pit should be lined as well, and no grass or other yard matter should be within two feet of your pit.

3. Tin DIY Fire Pit

Using whatever barrel-shaped scraps you can find, you can create this all-in-one tin fire pit. Tin fire pits are extra safe as they ensure your fire is adequately contained, and are much preferred in areas with wide open plains and active winds such as El Paso.

You can spruce up your repurposed tin barrel nicely with some high-heat paint (like Rust-Oleum) and stencils.

4. Gravel DIY Fire Pit

There is no digging required for this DIY fire pit design! Select some handsome gravel for your foundation, spread it out to create your overall fire pit space, then stack your fire pit stones. The fire pit pictured was built with crushed concrete rock with some additional aesthetic details.

The pit’s stones ought to be more than heavy enough to be dry stacked — no need for adhesive or cement. Hang some outdoor lights above your fire pit to finish off your welcoming ambiance for backyard guests.

5. Raised DIY Fire Pit with Fire Bowl

If you want an elevated fire, this is an ideal design for you. You can build up your fire pit walls to the desired height (only use even bricks for this design, not the rough stones mentioned above) and then top off with a fire bowl.

Ensure that your fire pit is the proper size for the bowl by building the first layer of the wall around the screen top of your fire bowl. When purchasing a fire bowl, make sure it has holes for drainage in the center (dumping out fire bowls filled with water is a hassle).

6. Grate Drum DIY Fire Pit

For a less formal, down-home fire pit look, simply add a smoker fire basket (sometimes also called a vertical drum) to the mix. You can either buy one pre-made, or you can craft one yourself using flexible metal grating from the hardware store and a few bolts to fasten it into a circle. Quite a few Hometalk DIYers like to use old washing machine drums, which cost about $10 from used appliance stores. Then insert your drum into the center of your fire pit. If you choose to build a solid wall design like the fire pit pictures, make sure you leave a drainage route for rainwater.

Whichever style you choose, just make sure you enjoy responsibly. Hometalk breaks down all the necessary safety precautions before, during, and after building your fire pit in “Stop! Your Must Have Handbook for Building DIY Fire Pits.”

The post How to Build a DIY Fire Pit for Your Backyard appeared first on Redfin Real-Time.


With Market Share Near 7% in Phoenix, iBuyers Contribute to the Area’s Relatively Strong Home Price Growth

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A local Redfin agent said at least half of her prospective clients ask about iBuyers, which are increasingly common in Phoenix and may be contributing to ongoing price growth.

Institutional buyers, known as iBuyers, are taking up a growing share of Phoenix home sales. iBuyers are companies—like RedfinNow, Zillow and Opendoor—that make instant cash offers to home sellers and close within days without any listings or showings, with the intent to re-sell for a profit.

In Phoenix, iBuyers purchased an estimated 6.9 percent of homes that sold in December 2018, according to a Redfin analysis of public records. That’s up from 4.2 percent in December 2017 and it makes Phoenix home to the largest iBuyer market share of any metro area in the U.S.

Overall, iBuyers had an estimated 4.8 percent market share in Phoenix last year, versus 2.7 percent in Dallas and 2.2 percent in Atlanta, two other markets that have been popular with iBuyers.

iBuyer market share in Phoenix

Local Redfin agent Katie Shook said Phoenix’s popularity with transplants and snowbirds is one reason the area is so popular with iBuyers. One-third of searches for homes in Phoenix on Redfin.com were from users outside the metro in the last quarter of 2018, up from 16.4 percent a year earlier. Phoenix was the second-most popular migration destination in the U.S. late last year, having been at or near the top of the list in the first, second and third quarters of the year.

“Because iBuyers provide a convenient service, they’re able to capture a lot of business from people moving in and out of Phoenix who want to sell their homes quickly, particularly if they’re vacation homes and the seller’s primary residence is in a different state,” Shook said.

There are several other reasons why iBuyers target Phoenix. Not only is the housing market strong, but taxes are low and homes are relatively inexpensive, so buying a home in the area requires less upfront cash. Phoenix is also home to a lot of new housing developments, a plus for iBuyers because it’s easier to value homes that are similar to one another and new homes require less repairs and maintenance.

iBuyers typically buy homes, make repairs and improvements, then put them back on the market for a small premium. In Phoenix, that premium tends to equal about $5,000 to $10,000, according to Shook. That premium, paired with the additional demand for homes iBuyers bring to the market, could help explain why the Phoenix area is retaining relatively strong price growth compared to nationwide growth. In February, Phoenix-area home sale prices were up 4.1 annually to a median of $267,000. Although that’s the smallest year-over-year gain Phoenix has seen since December 2011, it far outpaces the meager 0.6 percent nationwide price increase posted last month.

“The market is looking different this year, partly because iBuyers are starting to have a real impact in Phoenix,” Shook said. “I’m asked about iBuyers by at least half of the prospective sellers I talk to about listing their home. I explain that iBuyers pay close to market value for homes, maybe a little less, but you pay a fee for the price of convenience. If you want to pick your close date and eliminate the hassle of showings and repair work, it’s a great option.”

Shook also mentioned a less direct role iBuyers play in the market. Buyers sometimes prefer to accept offers from iBuyers over traditional homebuyers because they tend to be all cash and reliable.

Even though iBuyers may be helping Phoenix continue to see price growth, it’s still the slowest rate posted in eight years—and there are other signs the Phoenix market may be shifting toward buyers’ favor.

2019 has brought double-digit declines in the number of Phoenix-area homes sold, down 10.2 percent year over year in February after falling nearly 16 percent in January. Meanwhile, the supply of homes in Phoenix was up 2.7 percent year over year, the third consecutive month of inventory increases following two straight years of declines.

Homes listed in the Phoenix area are taking longer to sell than they were last year. The typical home that sold in Phoenix in February spent 53 days on the market, six days more than the same month last year.

And Phoenix home sellers this year have been more likely to drop their prices than they were last year. In February, 28.6 percent of listings saw price drops, up from 23.8 percent a year earlier.

“There are fewer buyers out there searching,” Shook said. “Homebuyers are able to be more discerning. Last spring, buyers would jump on a home even if it had flaws and needed improvements, but this year, they’re able to bargain prices down or keep waiting.”

The softening market in Phoenix is likely to have similar repercussions on institutional buyers as it does on traditional homebuyers and home sellers. Like traditional homebuyers, iBuyers are able to take advantage of relatively low price growth in Phoenix—but when they are going through the selling process, it may be more difficult to find a buyer or get top dollar for a property than it was last year.

The post With Market Share Near 7% in Phoenix, iBuyers Contribute to the Area’s Relatively Strong Home Price Growth appeared first on Redfin Real-Time.

Summer Like a Star in Actor William Forsythe’s Arkansas Vacation Home, Just Listed on Redfin

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William Forsythe, the actor known for roles in “The Man in the High Castle” and “Boardwalk Empire Star,” listed his lakefront home for $295,000.

 

Stars, they’re just like us–they have family vacation homes with loads of sentimental value that are hard to say goodbye to when the time comes.

That’s the case with actor William Forsythe, best known for his roles in “The Man in the High Castle,” “Boardwalk Empire,” “Raising Arizona,” and “Dick Tracy.”

Forsythe just listed his longtime family summer home on Arkansas’ Greers Ferry Lake on Redfin. “It was our family hideaway for 22 years,” he said. “It’s a loved property and home, but the time has come for a new owner.”

Priced at $295,000, the cedar-built property originally belonged to Forsythe’s late father, and covers nearly 14 sprawling acres. “It’s a fabulous, one-of-a-kind place, remodeled in the last year,” he said.

The house, a three-bedroom ranch, feels like a cozy, woodsy cabin, with stone flanking the entrance, wood-paneled interiors and a central fireplace.

“This property is a hidden gem, located directly on one of Arkansas’s favorite water playgrounds,” said Redfin agent Bonnie Nixon. “It has enough space to entertain friends and family, but is still small and secluded enough to get away from the hustle and bustle of life, and take in some rest and relaxation.”

William Forsythe

A lakefront address means serious summer fun. “Bring your pontoon, canoes, jet skies, four wheelers and your animals,” Forsythe said.

“It’s an awesome place, just under 14 acres, with a park-like setting of open land, forest and lake,” he said.

While it’s listed as a three bedroom, there’s an extra room that could easily be used as a fourth bedroom.

We could certainly picture packing a picnic for a day on the lake in this rustic kitchen.

Come winter, curl up near the fireplace in one of two living areas. Want added warmth? There’s also a connection available for a wood-burning stove.

In back, there’s also a large barn for parking, storage, livestock, or other activities. Said Forsythe, “it was even used as a boxing camp one season.”

Above all, the country home is a place to make memories, Fosythe said. “Make it yours. I hope you dance.”

 

The post Summer Like a Star in Actor William Forsythe’s Arkansas Vacation Home, Just Listed on Redfin appeared first on Redfin Real-Time.





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