Hottest Markets in the US

The key to real estate investing is finding the hot areas before they are too hot to afford and make more money on. In order to find these about to be hugely hot areas, it is always wise to look at the hottest markets around so that you can view prices, see if you can afford to invest in already hot markets or create predictions for which markets will be hot next.

The ZIP codes 02176 (Melrose, Mass.), 43085 (Worthington, Ohio) and 58103 (Fargo, N.D.) have pushed past one of the nation’s most recognizable postal codes – 90210 – and 32,000 others across the U.S. to top realtor.com’s list of 10 Hottest ZIP Codes for 2015.

ZIP codes making the list are distinguished by healthy housing dynamics, strong local employment and neighborhood “it factors.”

The hotness ranking is determined by the time it takes properties to sell and how frequently homes are viewed in each ZIP code.

“Each locale on this list is emblematic of the key trends driving housing this year – healthy local economics, job opportunities and affordability,” said Jonathan Smoke, chief economist for realtor.com. “For first-time homebuyers, these communities provide great opportunities to enter the housing market, build a career, and raise a family; older generations are able to build wealth and enjoy a variety of lifestyles.”

Here’s how it broke down.

In each top-ranked ZIP code, supply and demand are about five times stronger than the rest of the country. Homes in these communities sell four to nine times faster than the national average, with days on market 45%, or 20 days, lower than their respective metropolitan statistical areas. Centennial, Colo., has the nation’s lowest median age of inventory, with homes selling in approximately two weeks. Listings in each area are viewed three to eight times more often than overall U.S. listings, and an average of 2.3 times more often than their respective metros.

Income and employment are also contributing to the strong housing markets in these ZIP codes. Median household income among the Top 10 is $71,000, 20% higher than their surrounding metropolitan statistical areas and 32% higher than the national average of $54,000. Moreover, the share of households earning $100,000 or more is 32%, 22% higher than their respective markets and one-third higher than the national average of 23%.

Unemployment rates in these metros have dropped five times faster than other metros in the country in just the last year. Detroit and St. Louis are the only metros experiencing unemployment rates above 5%. ZIP codes on this list have an average of 22% lower unemployment than their surrounding metro areas. 

Each of the neighborhoods on this list provides favorable conditions for millennials considering a home purchase. The median income of people ages 25-34 years old in these ZIP codes is 26% higher than their respective metros, and 50% higher than the national average. In half of these areas, millennials earn 35% more than other age groups in the same ZIP code. Novi, Michigan, the St. Louis suburb of Crestwood, Missouri, and Columbus suburb, Worthington, Ohio, rank high in affordability with the median household able to afford 60-70% of the inventory on the market.

“Choosing a neighborhood to call home is not just a product of economic factors; it’s an intensely personal decision,” Smoke said. “Non-economic ‘it factors’ such as strong school systems, short commutes and access to public transportation, as well as close proximity to shopping and restaurants, also play an integral role in each market’s popularity.”

Who made the cut?

Click below to find out.

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02176 – Melrose, Mass. is close to both Boston and Cambridge and has become a magnet for young professionals and families due to its relative affordability, access to public transportation and attractive downtown area.

  • Population: 27,690
  • Median income for households between the ages 25-34 years old is $88,000, 67% higher than the average millennial in the U.S.
  • Market unemployment dropped by 14% year over year in the last six months.
  • Median list prices in June 2015 were 5% higher than the surrounding metro, and grew 5% year over year in both May and June.

 43085 – Worthington, Ohio is a major relocation market. It benefits from being part of the Columbus, Ohio metro, which offers stable employment and is the headquarters of a number of financial services and insurance companies – such as Nationwide Mutual Insurance Company and Huntington Bancshares Inc. – as well as The Ohio State University.

  • Population: 13,837
  • Listings receive an average of 1,000 views per month – nearly three times more views than the rest of the metro, and seven times more than the national average.
  • Market unemployment is one of the lowest in the country – about 40% lower than the rest of the metro.
  • Median list prices in June were 26% higher than the surrounding metro, and grew 10% year over year during the first half of the year.

80122 – Centennial, Colo., a suburb of Littleton, is centrally located south of Denver at the intersection of I-70, which traverses the girth of the U.S. from Ohio to Utah, and I-25, which cuts a swath from New Mexico to Wyoming. Centennial boasts a major retail presence and proximity to the area’s largest employer, Lockheed Martin, and a new Charles Schwab campus opened in October 2014 that is expected to employ approximately 2,000.

  • Population: 30,457
  • Median income for 25-35 year old households is $88,000, 67% higher than the average millennial in the U.S. and 48% higher than the average millennial in the metro area.
  • Houses spend approximately two weeks on the market – the shortest number of days on market in the U.S.
  • Market unemployment dropped 20% year over year in the last six months.

75023 – Plano, Texas is a suburb of Dallas, and home to the corporate headquarters of Dell Services, Dr. Pepper Snapple Group, Ericsson and Frito-Lay Inc., as well as the future headquarters of Toyota Motors USA. Plano is also home to a new $2 billion, 240 acre mixed-use development, Legacy West, which is bringing more businesses and thousands of new jobs to the area.

  • Population: 46,733
  • Listings receive nearly 1,200 views per month on average, 2.4 times more views than the rest of the metro and eight times more than the national average.
  • Civilian labor force unemployment dropped 22% year over year over the last six months.
  • Share of $100,000 earning households is 36% and will increase to 40% by 2020 based on the latest five-year projections from Nielsen Demographics.

48375 – Novi, Mich. is near the General Motors Technical Center in Warren, Mich., the General Motors Proving Grounds in Milford, Mich., as well as the Ford headquarters in Dearborn, Mich., and is home to some of the region’s largest healthcare systems. It is centrally located with quick access to highways, the Detroit airport and a re-emerging downtown Detroit. The Novi Community School District is also a major draw for this ZIP code.

  • Population: 22,189
  • Median income for 25-34 year old households is $80,000, 50% higher than the average millennial household in the U.S.
  • Civilian labor force unemployment is 57% lower than in the rest of the metro, and has dropped by 30% year over year.
  • Median list prices in June were 22% higher than the metro.

78247 – San Antonio. Located in the city’s North Central district, 78247 is within San Antonio city limits that offers a suburban feel. San Antonio is home to the corporate headquarters of USAA, Valero Energy Corporation, Rackspace, NuStar Energy L.P. and Harland Clarke. Coined “Military City USA,” San Antonio has a large military presence with about 100,000 people employed by the armed forces.

  • Population: 49,514
  • Households and population have grown 7% in the past five years, two times faster than the rest of the country.
  • Share of $100,000 earning households is expected to grow by 15% by 2020.
  • Median list prices in June were 33% lower than the metro, and grew 7% year over year during the first half of the year.

63126 – Crestwood, Mo. is a suburb of St. Louis. Home prices and quality of schools combined to propel Crestwood to No. 7 on the Top 10 list. The average cost of a home is about half the price of the neighboring ZIP codes of historic Kirkwood and Webster Groves. Crestwood is the most inexpensive community that feeds into Lindbergh Schools – a district that has received national honors and several state awards.

  • Population: 11,942
  • Median income for 25-34 year old households in this ZIP code is $73,000, 40% higher than the average millennial household in the U.S. and 38% higher than the average millennial in the metro area.
  • Civilian labor force unemployment is one of the lowest in the country and about 40% lower than the surrounding metro.
  • Home ownership rate is one the highest in the country at 84%, almost 20% higher than the U.S.

78729 – Austin, Texas. One of 78 ZIP codes in Austin, 78729 is located on the city’s north side, incorporating the residential Jollyville neighborhood, which offers prime access to many of the city’s major tech companies, including Apple, IBM and Dell. Jollyville feeds into one of the best school districts in the area, Round Rock ISD, and offers affordably priced homes, perfect for first-time buyers.

  • Population: 26,906
  • Median income for 25-34 year old households in this ZIP code is $73,000, 40% higher than the average millennial household in the U.S.
  • Share of $100,000 earning households is expected to grow 23% by 2020.
  • Population of millennials ages 25-34 is 23%, 75% higher than the U.S. average.

58103 – Fargo, N.D. A ZIP code that incorporates many smaller residential neighborhoods, 58103 is just southwest of Fargo’s downtown district. It is located just miles from the North Dakota State University campus, and provides many housing options for first-time home buyers.

Ranked as the fourth fastest growing metropolitan area by the U.S. Census Bureau, Fargo is home to robust healthcare, technology, agriculture and education industries with corporate offices for Microsoft and Sanford Health.

  • Population: 48,859
  • Median household income has grown 7% year over year, and is forecasted to grow 17.5% by 2020. Nearly three times faster than the national average.
  • Civilian labor force unemployment is one of the lowest in the country.
  • Population of millennials ages 25-34 is 20%, 50% higher than the U.S. average.

92010 – Carlsbad, Calif., nicknamed the “Village by the Sea,” is a tourist destination known for its Legoland theme park. It has four ZIP codes, two of which are right on the coast and extremely pricey. Prices in this region have been steadily increasing over the last 18 months. Located farther from the beach than the others, 92010 offers buyers a big selection of multi-family units, which is a way to get into the real estate market for under $600,000.

  • Population: 14,986
  • Share of $100,000 earning households is 35%, 55% higher than the U.S. average.
  • Median household income in this ZIP code is $71,000, 16% higher than in the rest of the metro.
  • Median list prices were $664,000 in June, 33% higher than the metro. They also grew 10% year over year during the first half of the year.

Source: http://www.housingwire.com/articles/34761-these-are-the-10-hottest-us-housing-markets-by-zip-code-right-now

Mortgage Loans

In the height of the real estate crash in 2008, people were walking away from mortgages and banks were foreclosing on homes left and right. In the years since, we have been slowly but surely recovering and a recent study is showing huge improvements in mortgage loan delinquencies that are even better than before the crash.

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.3% of all loans outstanding at the end of the second quarter of 2015, according to the Mortgage Bankers Association.

This was the lowest level since the second quarter of 2007.  The delinquency rate decreased 24 basis points from the previous quarter, and 74 basis points from one year ago.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure.  The percentage of loans in the foreclosure process at the end of the second quarter was 2.09%, down 13 basis points from the first quarter and 40 basis points lower than the same quarter one year ago. 

Click to enlarge

(Source: Mortgage Bankers Association)

This was the lowest foreclosure inventory rate since the fourth quarter of 2007.

“It is not surprising that incidences of mortgage payment difficulties are falling to back to historical norms. Despite edging-up over the second quarter, mortgage interest rates are still very low by the standards of the past 20-30 years,” says Ed Stansfield, chief property economist for Capital Economics. “And with house prices currently rising by 5% to 6% year-over-year, the number of mortgages that are underwater will have seen further declines. Admittedly, job creation has slowed since the start of the year, and the unemployment rate was unchanged in July. But overall the economy is still creating jobs at a steady rate, supporting mortgage borrowers.

“The downward trend in borrowers experiencing payment difficulties should continue, as unemployment sees further declines and mortgage rates only increase gradually. In turn, that should increase lenders’ willingness to extend mortgage credit, providing further support to the recent increase in housing market activity,” Stansfield says.

The percentage of loans on which foreclosure actions were started during the second quarter was 0.4%, a decrease of five basis points from the previous quarter. The foreclosure starts rate was unchanged relative to the second quarter of 2014. 

The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 3.95%, a decrease of 29 basis points from the previous quarter, and a decrease of 85 basis points from the second quarter of 2014. This was the lowest level since the fourth quarter of 2007.  

“Overall delinquency rates and the percentage of loans in foreclosure continued to fall in the second quarter and are at their lowest levels since 2007,” says Marina Walsh, MBA’s Vice President of Industry Analysis. “Even more telling, nearly every state in the nation reported declining foreclosure inventory rates over the second quarter, reflecting a nationwide housing market recovery and strong job market that provide opportunities for distressed loans to be resolved rather than be put into foreclosure.

“The overall delinquency rate for FHA loans dropped to 9.01% in the second quarter from 9.1%, as the 90 day or more delinquent category declined. However, the 30-day and 60-day delinquency rate was up by a combined 10 basis points from the previous quarter,” she says. “In addition, the FHA foreclosure inventory rate rose to 2.68% in the second quarter, four basis points higher than the previous quarter but still 13 basis points lower than a year ago. As more recent loan vintages begin to age and as older vintages enter the foreclosure process, we may see volatility in FHA delinquency and foreclosure rates.”

While only 40% of loans serviced are in judicial states, these states account for a growing majority of loans in foreclosure, Walsh said.  For states where the judicial process is more frequently used, 3.41% of loans serviced were in the foreclosure process, compared to 1.15% in non-judicial states. States that utilize both judicial and non-judicial foreclosure processes had a foreclosure inventory rate closer that of the non-judicial states at 1.36%.

“Legacy loans continued to account for the majority of all troubled mortgages. 73% of the loans that were seriously delinquent, either more than 90 days delinquent or in the foreclosure process were originated before 2008, even as the overall rate of serious delinquencies for those cohorts decreased,” she said.

Source: http://www.housingwire.com/articles/34762-mortgage-delinquencies-foreclosures-continue-to-drop-in-2q15

Closing Costs Dropping

Closing costs are something that many real estate investors or those who just need to sell their homes, do not plan for. It is something that can end up being very costly depending on the situation but recently, it seems that the market is dictating that closing costs are dropping drastically as people are purchasing more homes.

Mortgage closing costs declined 7% over the past year and now average $1,847 on a $200,000 loan, according to Bankrate.com.

Hawaii’s average closing costs of $2,163 are the highest in the nation, followed by New Jersey ($2,094), Connecticut ($2,033), West Virginia ($1,971) and Arizona ($1,969).

The cheapest closing costs are in Ohio ($1,613), Idaho ($1,682), Wyoming ($1,689), Utah ($1,697) and Maine ($1,727).

Nationwide, the average origination fee declined 22% to $1,041 and the average third-party fee rose 22% to $807.

“Homebuyers have more say over closing costs than they think,” said Holden Lewis, Bankrate.com’s senior mortgage analyst. “Costs vary between lenders, so everyone should compare at least three different options. You don’t have to go with the lender your agent suggests.”

Click here to view the average closing costs in all 50 states and Washington, D.C.

Bankrate surveyed up to 10 lenders in all 50 states and Washington, D.C. in June 2015. Researchers obtained online good faith estimates for a $200,000 mortgage to buy a single-family home with a 20% down payment. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals. The survey excludes discount points, taxes, title fees, property insurance, association fees, interest and other prepaid items.

Source: http://www.housingwire.com/articles/34665-mortgage-closing-costs-drop-7-to-1847

Chad Chiniquy

Chad Chiniquy on Chicken Soup For The Soul

Here is a great video of Chad Chiniquy being interviewed by Mark Victor Hansen of Chicken Soup For the Soul.  Chad Chiniquy discusses his family, real estate, his success and how you can learn and implement the amazing strategies that have helped him become successful in the real estate industry.

I Want a Mortgage Loan and I Want it Now!

This would be a perfect new catch phrase for the newly re-defined J.G Wentworth as they branch out into the mortgage lender business. When most people want to diversify their financial portfolios, they move into real estate and this is a perfect example of a company doing just that. I’ll be interested to see how this diversification does for J.G Wentworth.

The transition of The J.G. Wentworth Company (JGW) into a mortgage lender is now complete.

In March, J.G. Wentworth, the purchaser of structured settlement payments, annuity payments, lottery payments and other receivables that rose to fame with the “It’s my money and I want it now” advertising campaign, announced its intention to acquire WestStar Mortgage, a privately-held residential mortgage company specializing in conforming mortgage lending.

According to a release from the companies, the acquisition is now complete.

The final purchase price was $53.2 million in cash and $13.5 million in J.G. Wentworth shares, for a total purchase price of $66.7 million.

WestStar is based in Woodbridge, Virginia, and is licensed to operate in 40 states. The company was founded in 2000 and currently has more than 300 employees spread over 15 states.

With the deal finalized, WestStar will now operate as J.G. Wentworth Home Lending, a newly-rebranded division in the J.G. Wentworth family of brands.

The addition of WestStar’s 300 employees will nearly double J.G. Wentworth’s workforce.

“Diversification to deliver ‘Cash Now’ is a fundamental part of our strategy for growth,” said Stewart Stockdale, chief executive officer, J.G. Wentworth.

“The acquisition of WestStar is strong evidence of this strategy in action,” Stockdale contined. “Together with our structured settlement payment purchasing business and other key initiatives, we are delivering financial products and solutions that allow our customers access to funds that will help them achieve their goals.”

Stockdale said that J.G. Wentworth is excited to welcome the WestStar team to the company.

In 2014, WestStar closed $1.5 billion of new loan originations, and the company sold or securitized approximately half of the loans it originated to government-backed organizations and half to third-party institutional investors in the secondary market, the companies said in an earlier release.

WestStar’s executive vice president, Roger Jones, will serve as president of the J.G. Wentworth Home Lending division.

“The team at WestStar is excited to join an established direct-to-consumer leader like J.G. Wentworth, and we look forward to bringing a new suite of product solutions to J.G. Wentworth’s established and growing customer base,” Jones said.

Source: http://www.housingwire.com/articles/34672-jg-wentworth-completes-transition-into-mortgage-lender