Older Millennials Are Now the #1 Market Segment Buying Homes

The recently published 2019 NAR Home Buyers and Sellers Generational Trends Report takes a smart approach by segmenting the generation into two groups: 21 to 28 years old (“Younger Millennials”) and 29 to 38 years old (“Older Millennials”), and the research reveals some interesting differences.

In looking at the share of home buyers across all generations in the report, Older Millennials are now the largest percentage at 26%:

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As the next wave of home buyers, Older Millennials stand out in several ways…

  • Household Formation - Highest percentage of homebuyer households were married couples (69% compared with 63%, all ages) and most likely to have children under age of 18 living at home (58% compared with 34%, all ages)

  • Property Location - In addition to Suburbs/Subdivisions (53%), they tied with Younger Millennials for the highest percentage of homes in Urban area/Central city locations (17% compared with 13%, all ages)

  • Proximity - Smallest distance between home purchased and prior residence (10 median miles compared with 15, all ages)

  • Neighborhood Selection - More influenced by “Quality of the neighborhood” as top factor for choice of neighborhood (63% compared to 58%, all ages)

  • Finding an Agent - Less than 1% found their agent through a social media page (50% referred by friend, neighbor or relative) and only 9% texted as first contact (68% through phone, in person or email)

  • Downpayment - Similar to Younger Millennials, 24% said that saving for a downpayment was the most difficult task in the buying process. 40% delayed buying a home 5 years or more, because of saving for a downpayment.

  • Investment Perspective – 88% viewed buying a home as a “Good financial investment” highest of all age segments (84% for all buyers)

While interesting to look at these differences in generations, it’s important to mention I’m available to provide assistance with financing referrals to some of the best mortgage lenders in the industry as well as start an MLS drip for criteria you’re seeking in a new home. Please let me know what I can do for you!

Housing Market is in Good Health with This Report

Black Knight, an industry provider of integrated software, data and analytics solutions, recently reported their May Payment-To-Income Ratio by State, reporting that the income ratio has dropped to the lowest level in a year.

This is helped by lower rates and rising income and speaks to Affordability and the health of the housing market. Overall the average front ratio is 22%, vs the long-term average of 25%.

Lower interest rates and rising incomes are helping to lower this, but meanwhile, you should remember home prices are appreciating. As a result, we’re getting stronger gains in income and stronger benefits from lower interest rates, than there are in price appreciation. This is a really good sign.

Payment to Income Ratio by State May 2019.png

June 2019 Q & A

1. Question: A new tenant signed a six-month lease. Now, he claims he feels unsafe because of an incident at the property and wants to terminate the lease. The tenant claims he has a 72-hour period to rescind the lease after it is executed. Is this true?
Answer: There is no 72-hour right of rescission for residential leases.

2. Question: Is there a law on the length of time a resident must reside in an apartment not to be charged for paint or carpet when they move out? What are the guidelines?
Answer: No, the tenant can always be charged for painting or carpet cleaning and/or replacement that is beyond ordinary wear and tear.

3. Question: I served a three-day notice on my tenants and they paid $300 of the $1050 that was due. Do I have to serve another three-day notice to start the eviction? Should I have accepted payment? Answer: You did not have to accept partial payment but since you did, you must start over with a new notice.

4. Question: We have a one-year lease with a tenant that will expire in four months. If we sell the house now, and the buyer wants to move in, would we be able to break the lease?
Answer: The buyer “steps into the shoes” of the seller and the lease is binding upon the new owner.

5. Question: I allowed a tenant to move-in and pay the security deposit in several payments. They are not able to make the final payment. What can I do?
Answer: You can serve a three-day notice to perform conditions or covenants or quit. If the tenant fails to pay the deposit within three days from legal service of the notice, you can commence the eviction process (unlawful detainer).

6. Question: Is the procedure for evicting a tenant from a garage any different than for a tenant who lives in a residential unit? Is delivering a notice to a post office box legally acceptable?
Answer: The eviction process is the same. The notice should be mailed to the post office box and another copy attached to the door of the garage the same day. Even though it may not be delivered, send another notice via mail, same day to the garage, since the code literally requires mailing and posting to the rented premises.

7. Question: Is there any way to impose a rent increase on tenants with a lease or do you have to wait until the lease is expired? Can you raise rents on specific units and not all units?
Answer: You have to wait until the lease expires unless the lease term contained an automatic rent increase. Many owners increase the rent on the tenants’ anniversary dates.

8. Question: I have a tenant who has been late with the rent on a number of occasions. I charge him a late fee and he pays it. When his lease expires, do I have to renew?
Answer: Generally you are not required to show cause to not renew a tenant’s fixed term lease and do not need to have or state a reason for non-renewal. This general rule may not apply for subsidized housing, or if the unit is subject to rent-control or if the unit is in a just cause jurisdiction.

9. Question: We want to give notice to vacate to a renter of a garage who has been in occupancy for over one year. Can we give a thirty-day notice or does the sixty-day notice rule apply for garages as well?
Answer: You can give a thirty-day notice. Sixty-day notices are only required for residential property when the tenant has been in possession for one year or longer and the rental agreement is month-to-month.

10. Question: My tenant fixes his motorcycle in the living room of his apartment. I have warned him that he did not have a right to use our apartment as an auto repair shop. He says as long as he leaves the apartment clean, he has the right to work on his motorcycle. What should I do?
Answer: You should review your lease to see if he is breaching any particular condition of promise. If not, and you are on a month-to-month tenancy, you could threaten to serve him with a thirty-day notice to quit, or to change the terms of tenancy. If you are not on a month-to-month tenancy, you must find a breach and serve a three-day notice to comply. If he fails to meet the demands of the notice, the eviction lawsuit may be filed.

11. Question: Are the laws any different between "motels" and "apartments"? Where could I get a booklet or more information on this matter?
Answer: The laws are significantly different between motels and rental housing. For instance if a motel customer fails to pay, the police can be immediately called to remove the customer. In a residential rental dwelling such as an apartment, however, the owner must go through the tenant eviction process to regain possession. You may be able to obtain information from the California Lodging Association and the California Apartment Association.

12. Question: I have been asked by another property manager if a former tenant of mine caused any problems and if I would rent to him again. I suspected that he was a drug dealer or at least a drug user but I cannot prove it. What can I tell her?
Answer: If you are unsure, you should remain silent. From a legal point of view, it is always safest to say nothing. However, if you choose to do so, you should only reveal information, if any, that you know to be true and can be documented. When making a recommendation, you are always running the risk that the person you are referring to believes you are defaming their good name. Making timely notes of what you said and who you spoke to, will be valuable if you are questioned about the conversation in the future. Discuss only facts that pertain to compliance with your lease or rental agreement.

13. Question: I suspect there are at least five people living in a one-bedroom apartment in one of our units. The lease only allows three persons and they have not paid rent. I want to serve a three-day notice to pay rent or quit, but I do not know all of their names. What should I do?
Answer: If you serve a three-day notice, address it to the occupants for which you have the names and also to "all others in possession." If they pay the rent, however, you may have agreed to the additional people living there. If you do not intend to allow their occupancy, you could also serve a three-day notice to perform conditions and/or covenants or quit requiring that the additional people vacate within three days. If either or both of the notices are not complied with, you can commence with an eviction in court.

14. Question: A tenant of three years recently vacated with only a verbal two-week notice. Can she be charged for unpaid rent? She did not have a lease agreement and never signed anything stating that she would give a thirty-day notice.
Answer: If the rent is paid monthly and there is no term stated in the lease, written or verbal, the law presumes you are under a month-to-month agreement which requires a thirty-day written notice to terminate. If no written notice was given, the former tenant owes rent up to thirty days or until the time you relet the premises (you have to try), whichever occurs first.

This article is for general information purposes only. These legal alerts are provided on selected topics and should not be relied upon as a complete report of all new changes of local, state, and federal laws affecting property owners and managers. Laws may have changed since this article was published. Before acting, be sure to receive legal advice from our a qualified law professional.

© 2019 Kimball, Tirey and St. John LLP

China Hits Back at U.S. as Mortgage Rates Drop

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Two major developments this week have caused mortgage rates to plunge, potentially below 4% for some borrowers.

First, the Federal Reserve Open Market Committee meeting minutes released this week gave us a good idea of the stronger language regarding the committee’s position on interest rates. Patience is still the members’ firm commitment. Citing a lack of inflationary pressure, members said they believe rates will remain unchanged for “some time.”

The FOMC members also changed their position on where they believe the economy is going. Worries about recession have taken a backseat and the members are instead positive about growth this year, agreeing that growth is “solid.” Keep in mind, however, that this Fed meeting took place well before the recent trade issues with China.

The Fed minutes created a positive vibe on Wall Street which was quickly overshadowed by the shake up in negotiations with China. China’s Commerce Ministry said that trade talks cannot continue until the United States addresses its “wrong actions.” No specific actions were cited and no further talks are scheduled at this time.

That caused equities to take a dive. At its lowest point the Dow was trading down 400 points and finished 286 points down on Thursday. The S&P 500 tumbled by 1.2% while the Nasdaq Composite lost 1.6%. The S&P is now down just over 4% from the record highs. Crude oil also saw a big dropoff as the risk crept into other parts of the market.

This volatility in equities, combined with belief from investors that this trade war will last for much longer than anticipated, had another very important consequence for the housing market.

This Thursday, the benchmark 10-year Treasury yield hit its lowest level since 2017. It dropped 9 basis points to 2.308% (see chart below). Again, this is in response to the intensified trade war discussions between the U.S. and China. The yield on the 30-year Treasury bond dropped 8 basis points to 2.742%. Those are the lowest levels for those yields since November 2017 and December 2017, respectively.

The silver lining is that as bond yields dive lower, so do long-term mortgage rates. According to Freddie Mac, the average 30-year fixed mortgage rate was 4.06% this week.

This political drama continues the whirlwind of a month where President Trump accused China of reneging on a deal and then announcing he would raise tariffs. That was countered by China announcing higher tariffs on U.S. goods. Helping ease some of the tension was a move by the United States to allow Google to continue working with Chinese telecom giant Huawei.

Another move keeping investors wary is a tension with Iran that has bubbled up in the last week. President Trump tweeted over the weekend that “If Iran wants to fight, that will be the official end of Iran.”

The Pentagon has dispatched additional ships and bombers to the Middle East while acting Defense Secretary Patrick Shanahan said that “This is about deterrence, not war.” It will be a situation closely watched by investors and analysts as it continues.

Adding to the geopolitical mess was U.K Prime Minister Theresa May resigning her position in the wake of the Brexit fiasco. She will officially leave her position on June 7 as the U.K. continues to struggle to figure out a deal to leave the European Union.

NEW YORK FED SPEAKS ON FUTURE OF HOMEOWNERSHIP

This week the New York Fed held a press briefing discussing homeownership in the United States. That coincided with the release of the group’s 2019 Survey of Consumer Expectations Housing Survey.

What the group found is that the future of homeownership in America depends on quite a few factors, first and foremost, how many people continue to enter into homeownership. If the economy stays stable, there’s a good chance the number of people owning homes will increase as the aging population is more likely to own a home. The study also found people would like to own instead of rent, but are held back by factors like student debt and tight credit.

Along those lines, new home sales data out this week shows that home sales declined by 6.9% in April with previous months being revised up. The most notable revision was adding 31,000 units to March’s report.

Existing home sales also declined in April, dropping by 0.4% month-over-month against expectations for an increase. It’s interesting to note that while single-family unit sales decreased, we did see increases in sales of condos and co-ops.

FANNIE, FREDDIE DISCUSSION CONTINUES

Federal Housing Finance Authority Director Mark Calabria sent a ripple through the housing world this week during the MBA Secondary Conference in Manhattan. He is itching for change and says the time for reforming the government conservatorship of Fannie and Freddie is now.

The process to get there isn’t very simple, however, and Calabria has suggested the groups explore initial public offerings (IPOs) as a way to raise the capital necessary to exit government control. “The centerpiece of this plan has to be a strategy to end conservatorship of Fannie and Freddie,” said Calabria. “I want to move to a new reform structure. One that’s more competitive and works for taxpayers and supports financial stability.”

The other part of his plan is to create more competition in the marketplace while helping Fannie and Freddie regain financial stability. In summary, he believes that companies should succeed because they are the best. Not because the rules are best suited for them.

About the Author: The Market Update is a weekly commentary compiled by a group of Movement Mortgage capital markets analysts with decades of combined expertise in the financial field. Movement's staff helps take complicated economic topics and turn them into a useful, easy to understand analysis to help you make the best decisions for your financial future.

May 2019 Q & A

1. Question: Can I accept rent after serving a notice for an issue other than payment? For example: after service of an unauthorized occupant notice.

Answer: You should always check with a knowledgeable attorney to determine whether you should accept rent or not if the notice served was for something other than payment. Accepting rent after serving a notice may waive the notice.

2. Question: At what point does my property require an onsite resident manager?

Answer: If your property has 16 units or more, you are required to have an on-site “responsible person.”

3. Question: A resident at my property was taken to the hospital and passed away. Since the lease requires a 30-day notice, what is the law as far as reimbursement of the deposit?

Answer: When a tenant passes, the month-to-month tenancy is terminated 30 days from the date of the decedent’s last rent payment. Therefore, you have 21 days from the termination date to account for the security deposit (assuming that you have regained possession of the unit). If anyone else claims a right to possession, you need to go through the eviction process.

4. Question: I served my resident a 30-Day Notice of Termination of Tenancy on the 15th of the month. My resident says I have to wait until the end of the month to serve the notice, is that correct?

Answer: No. Under California law, either party can serve an appropriate 30-Day Notice of Termination of Tenancy any day of the month. Your notice will expire 30 days from the date you served the notice, so make sure you do not accept rent beyond that point.

5. Question: I served a 60-day notice that expires on the 15th of the month. How much rent should I accept for the month in which the notice expires?

Answer: You can only accept 15 days of rent for that particular month.

6. Question: Per the rental agreement, rent is due on the first day of each month and, if rent is not received by the 5th day, then a late charge will be incurred by the tenant. If my tenant fails to pay rent, do I have to wait until the 5th day of the month before I serve a 3-Day Notice to Pay Rent or Quit?

Answer: No. You can serve a 3-Day Notice to Pay Rent or Quit the following day after the rent is due. Be aware that if the due date falls on a weekend or holiday, you must carry the due date to the following first business day.

7. Question: I recently purchased a triplex, and the escrow will be closing in a couple of days. The tenants are currently on a month-to-month rental agreement. Do I have to wait until the end of the month or can I serve a 30-day notice as soon as I take possession of the property?

Answer: You can serve a 30-day notice at any time during a month-to-month tenancy. You do not need to wait until the end of the month. You are also entitled to rent for the 30-day time period. If all of the tenants in the unit have been a resident for more than one year, a 60-day notice is required.

8. Question: I have heard five different answers from five different people. Please, tell me what I can legally deduct from my tenant’s security deposit.

Answer: Rights and obligations regarding a residential tenants’ security deposit are governed by California Civil Code Section 1950.5. You can use the deposit at least for cleaning, delinquent rent and damages above ordinary wear and tear. What is considered ordinary “wear and tear” is subject to a variety of opinions by judges. In order to convince a court that the damages were extraordinary, move-in and move-out records of the condition of the apartment, pictures, receipts and opinions from those who did the work make the job of determining ordinary wear and tear easier for the court to decide.

9. Question: I have filed an eviction against one of my resident for failing to pay rent for the last two months. I served the notice on a Saturday and someone said I had to serve it on a business day. Are they right?

Answer: No. A 3-day notice for breach of the lease can be served on any day of the week. The tenant has three full days to comply, and the last day of the notice must end on a business day.

10. Question: I am a manager of a 56-unit complex. One of the tenants informed me that his girlfriend moved in. I gave him an application and told him to have her fill out and then return it to me. It has been ten days and I have not gotten it back.

Answer: If the lease prohibits the assigning or subletting of the premises without your permission, you can serve a 3-Day Notice to Perform Conditions and or Covenants or Quit, detailing the violation. The notice should require that they either turn in the application or she must vacate the property within the 3-day period. If they do not comply with the notice, you could commence eviction procedures.

11. Question: I served one of my tenants with a 3-Day Notice to Pay Rent or Quit. He did not comply so I served a 30-Day Notice to Quit. If the tenant does not move out by the 30th day, should I call the Sheriff to evict him?

Answer: The Sheriff will not evict your resident unless you have gone through the unlawful detainer lawsuit and produced a judgment for possession. You could have filed the unlawful detainer action after the 3-day notice expired; you did not need to give the tenant an additional 30 days.

12. Question: I recently received an application from a young married couple. He is twenty but she is only seventeen. I told her she was too young to sign the rental agreement and he had to qualify on his own even thought she was working. She said because she was married, she was qualified to sign. I never heard of this law. Is she right?

Answer: California recognizes an individual’s right to enter into binding contracts if they are eighteen years of age or older, in active duty in the military, married, or are emancipated by order of the court. You therefore should treat her the same way as you would any other adult applicant.

13. Question: A couple recently applied for one of our vacant units. They have jobs but do not quite qualify for the unit (they need to make three times the amount of the rent). They said that his father would be willing to co-sign as a guarantor in order to qualify. How should I work this arrangement on the lease?

Answer: Guaranty agreements are separate and distinct from the lease and may be rendered void if the lease is modified without the knowledge or consent of the co-signor or guarantor. Carefully drafted guaranty agreements can eliminate this risk.

14. Question: One of my two tenants on the lease moved out due to a job transfer. The remaining tenant would like to stay and pay the entire amount. Do I need to write up a new lease or simply prepare an addendum stating the remaining tenant is solely responsible?

Answer: You can amend the lease to remove the vacating tenant, or keep the current lease in place without amendment (in which case the vacating resident may remain rent responsible), or terminate the existing lease and enter into a new lease with the remaining resident.

This article is for general information purposes only. While this blog provides clients with information on legislative changes, our courtesy notifications are not meant to be exhaustive and do not take the place of legislative services or membership in trade associations. These legal alerts are provided on selected topics and should not be relied upon as a complete report of all new changes of local, state, and federal laws affecting property owners and managers. Laws may have changed since this article was published.

© 2019 Kimball, Tirey and St. John LLP

Ten Ways to Create a Welcoming Front Entrance for Under $100

Wouldn’t it be nice to approach your home’s entrance with a grin instead of a grimace? Take our tips for beating a clear, safe, and stylish path to your front door.

First impressions count — not just for your friends, relatives, and the UPS guy, but for yourself. Whether it’s on an urban stoop or a Victorian front porch, your front door and the area leading up to it should extend a warm welcome to all comers — and needn’t cost a bundle.

Here’s what you can do to make welcoming happen on the cheap.

#1 Get Rid of Overgrowth

The path to your front door should be at least 3 feet wide so people can walk shoulder-to-shoulder, with an unobstructed view and no stumbling hazards. So get out those loppers and cut back any overhanging branches or encroaching shrubs.

#2 Light the Pathway

Landscape lighting makes it easy to get around at night. Solar-powered LED lights you can just stick in the ground, requiring no wiring, are surprisingly inexpensive. We found 8 packs for under $60 online. 

#3 Paint Your Door

Borrow inspiration from London’s lovely row houses, whose owners assert their individuality by painting their doors in high-gloss colors. The reflective sheen of a royal blue, deep green, crimson, or whatever color you like will ensure your house stands out from the pack.

#4 Replace Door Hardware.

While you’re at it, polish up the handle on the big front door. Or better yet, replace it with a shiny new brass lockset with a secure deadbolt. Available for about $60. 

#5 Add a Knocker

Doorbells may be the norm, but a hefty knocker is a classic that will never run out of battery life, and another opportunity to express yourself (whatever your favorite animal or insect is, there’s a door-knocker in its image). 

#6 Plant Evergreens

Boxwoods are always tidy-looking, the definition of easy upkeep. A pair on either side of the door is traditional, but a singleton is good, too. About $25 at garden centers. In cold climates, make sure pots are frost-proof (polyethylene urns and boxes mimic terracotta and wood to perfection).

#7 Make Your House Numbers Stand Out

Is your house number clearly visible? That’s of prime importance if you want your guests to arrive and your pizza to be hot. Stick-on vinyl numbers in a variety of fonts make it easy, starting at about $4 per digit.

#8 A Nice Door Mat

A hardworking mat for wiping muddy feet is a must. A thick coir mat can be had at the hardware store for less than $20. Even fancier varieties can be found well under $50.

#9 Porch Lights

Fumbling for keys in the dark isn’t fun. Consider doubling up on porch lights with a pair of lanterns, one on each side of the door, for symmetry and twice the illumination. Many mounted lights are available well under $100.

#10 A New Mailbox

Mailboxes run the gamut from kitschy roadside novelties masquerading as dogs, fish, or what-have-you to sober black lockboxes mounted alongside the front door. Whichever way you go, make sure yours is standing or hanging straight, with a secure closure, and no dings or dents. The mail carrier will thank you.

April 2019 Q&A

1. Question: How many protected classes are there in California?

Answer: In addition to the seven federal protected classes (race, color, religion, national origin, sex, familial status and disability) California has thirteen protected classes, some of which are unique to California. They are: marital status, age, ancestry, sexual orientation, source of income, medical condition, gender, gender identity, gender expression, genetic information, citizenship, immigration status and primary language spoken. California also prohibits discrimination based on the perception that someone is from a protected class or is associated with someone from a protected class. Finally, it prohibits discrimination on any arbitrary basis.

2. Question: What is a request for a reasonable accommodation?

Answer: A reasonable accommodation is a change or exception to the property’s rules, policies, practices or services that is necessary to afford a person with a disability full and equal use and enjoyment of the rental property.

3. Question: What are some examples of a reasonable accommodation?

Answer: Common examples are allowing a resident to have an assistive animal, reserving a special parking space for a resident, allowing a resident who needs to move due to a disability to terminate a lease without further obligation for rent, or modifying a rent due date to coincide with the receipt of disability payments.

4. Question: What is a request for a reasonable modification?

Answer: A reasonable modification is a physical change to the apartment or the common areas that is necessary to afford a resident with a disability full and equal use and enjoyment of the rental property.

5. Question: Who pays for a reasonable modification?

Answer: Modifications are usually at the resident’s expense unless the property receives federal financial assistance in which case the landlord must make and pay for the modifications. The other exception is that if a newer property (built for first occupancy 3/13/91 or later) wasn’t built in compliance with accessibility laws in place at the time of construction, the landlord must pay to make it accessible.

6. Question: What is an assistive animal?

Answer: According to HUD, an assistive animal “is an animal that works, provides assistance or performs tasks for the benefit of a person with a disability, or provides emotional support that alleviates one or more identified symptoms or effects of a person’s disability. Assistive animals perform many disability-related functions, including but not limited to, guiding individuals who are blind or have low vision, alerting individuals who are deaf or hard of hearing to sounds, providing protection or rescue assistance, pulling a wheelchair, fetching items, alerting persons to impending seizures or providing emotional support to persons with disabilities who have a disability-related need for such support.”

7. Question: Can I require a tenant pay a deposit for their assistive animal?

Answer: No. It is unlawful to condition the granting of a reasonable accommodation, such as allowing a resident to have an assistive animal, on that person paying a fee or deposit. However, the resident can still be held liable for any damage to the unit above ordinary wear and tear that is caused by the animal and those damages can be taken out of the regular security deposit that the resident paid for the unit.

8. Question: A tenant wants to move in with a companion dog. Our property only allows cats as pets. Can I tell the tenant to get a companion cat instead?

Answer: No. You cannot apply pet restrictions to assistive animals. An assistive animal is not a pet. You must allow the tenant to get the type of assistive animal that best meets his/her disability-related needs.

9. Question: I just received a Notice of Filing of Discrimination Complaint from the California Department of Fair Employment and Housing. What do I do?

Answer: You only have 20 days to respond to a fair housing complaint from either HUD or the DFEH. If you do not respond to the complaint in that time frame the agency will proceed with the case without your input which could result in a finding of discrimination against you. You should contact our office right away and also notify your insurance company of the complaint.

10. Question: Someone told me that a guest of a resident can file a fair housing complaint, is that true?

Answer: Yes. Guests have standing to bring a fair housing complaint or lawsuit if the guest receives discriminatory treatment while visiting a resident at your property. A common example would be refusing to allow a guest to bring his assistive animal with him when he visits your resident at the property.

11. Question: An applicant came into my office and is clearly pregnant. Do I count the baby to determine whether her household meets our occupancy standards?

Answer: No. You should not count the baby until it is born. You should also have a reasonable policy about what happens when the addition of a minor to the household during the tenancy puts the household over occupancy. A suggested policy would be that the household gets to stay through the end of their lease or a certain number of months, whichever is longer. We recommend that the number be a minimum of six months, but you may want to consider a longer period of time in order to help ensure that an enforcing agency would find the time period to be reasonable.

12. Question: What is the difference between ADA and fair housing laws? Does the ADA apply to my property?

Answer: The ADA (Americans With Disabilities Act) applies only to places of public accommodation. Fair housing laws apply to private residential rental housing (and housing sales). Only the areas of your property that are open for the public to come and do business with you are covered by the ADA, such as your rental office and future resident parking. The other areas of your property, such as the rental units, common areas and amenities are covered by fair housing laws. There are some substantial differences between the ADA and fair housing laws, so if you are unsure about which laws apply and what your responsibilities are, you should contact our office.

This article is for general information purposes only. These legal alerts are provided on selected topics and should not be relied upon as a complete report of all new changes of local, state, and federal laws affecting property owners and managers. Laws may have changed since this article was published. Before acting, be sure to receive legal advice.

© 2019 Kimball, Tirey and St. John LLP

Jobs Rebound - Give Markets Fresh Confidence

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Investors cheered the jobs news on Friday morning as March employment activity bounced back from a sour February performance, according to the monthly federal report. The news that employers created 196,000 net new jobs in March beat expectations and gives markets that had wavered a fresh indicator that job creation hasn’t lost all momentum.

The strong showing contrasts with just 20,000 net new jobs in February, although that number was revised up to 33,000 on Friday, which is still far below expectations. Those disappointing February results prompted some analysts to wonder if the now decade-long expansion in the labor markets was drawing to a close. March results suggest that’s not true just yet.

The national unemployment rates remains at 3.8%, on par with expectations. The good news in March was possible thanks to 49,000 new workers in health care, professional and technical services gains of 34,000 and restaurants and food service adding 27,000. Construction rose by 16,000 jobs, but manufacturing saw 6,000 jobs lost in March.

Wage growth was less impressive. Wages increased just 0.14% in March and is now up 3.2% over the last 12 months. Analysts expected year-over-year wage growth to hit 3.4%.

The results released Friday give new hope for continued economic growth. The Atlanta Fed is now projecting first quarter GDP to rise 2.1%, after much smaller estimates a few weeks ago.

Fed officials continue to keep a close eye on jobs as they weigh monetary policy moves. The Fed has paused its rate hikes as it awaits more economic data. Some had speculated after the disappointing jobs report in February that the Fed may be forced to reduce rates later this year. However, the good report Friday likely puts those concerns on hold. Investors will now watch other key indicators to see how long the Fed holds rates steady. No changes are predicted in the coming months, unless economic data shifts drastically.

Ten-Year Treasury yields leveled off around 2.5% in early trading Friday. Treasury’s traded off this week after bottoming out a 2.35% last Friday, ending March on a downward trend that sent the mortgage market firmly into refinance territory. While Friday’s news will likely calm the rally in bonds in the very near term, don’t expect a real rise in rates anytime soon. The refinance opportunity for many mortgage borrowers that purchased homes last year remains in place while low rates should continue to push the spring buying season into a renewed frenzy.

China trade deal?

Markets are also digesting new developments in the ongoing trade war with China. This week, a delegation from China met with President Trump and discussed a deal that could end the tit-for-tat tariffs that have roiled international trade between the two largest economies.

Trump said he expected to know whether a deal will happen over the next four weeks. A summit between Trump and Chinese President Xi Jinping has been floated but is not likely until a trade agreement has been reached. The two leaders have reportedly made progress in the ongoing talks about a comprehensive trade deal. However, lingering differences on tariffs, technology and other key point of tension still must be resolved.

The stakes are high, and investors are watching closely for developments. Over the last year, the two nations have introduced hundreds of billions of dollars in new tariffs on each other. The results have been problematic for growth in both countries and has spilled over into global markets. A solid trade deal could bring fresh momentum to economic growth, but continued impasse may eventually contribute to global recession.

Housing continues to slow

Home price gains continue to slow down as the overall housing market cool down persists. The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index released this week fell 0.22% month over month in January and increased 3.58% year-over-year, below expectations of 3.8%. Home price appreciation also decelerated for the 10th consecutive month, hitting its lowest level since September 2012. The widespread and accelerating slowdown in housing has caused the S&P CoreLogic Case-Shiller US National Home Price Index to drop below 5% to 4.26% last month.

According to the Case-Shiller report, 14 of the 20 cities that make up the 20-City composite index saw home prices decline month over month. Seattle, Portland, San Diego, Chicago, Minneapolis, Cleveland and Detroit have all declined for 4 consecutive months or more. Denver, Washington and San Francisco have each declined in 5 of the last 6 months. Meanwhile, Dallas was the only city to reach a new all time high.

The slowdown in home prices is attributed to affordability concerns choking off new buyers into the marketplace. Rising property taxes in cities with more pronounced price declines is also a concern.

Still, home prices broadly remain below the highs seen in the 2007 housing crisis, and many cities with lower cost of living and population growth are still seeing home prices increase, even if at a more sustainable pace. Market watchers will be curious to see how lower interest rates, which can help with affordability, will affect the housing market in the spring and summer buying season ahead.

About the Author: Movement Staff

The Market Update is a weekly commentary compiled by a group of Movement Mortgage capital markets analysts with decades of combined expertise in the financial field. Movement's staff helps take complicated economic topics and turn them into a useful, easy to understand analysis to help you make the best decisions for your financial future.

Ten Features That Can Make a Home Sell Faster

Homeowners are spending more to spruce up their homes. They spent an average of $12,361 in discretionary funds on remodeling in 2017—the highest since 2006, according to the latest report by the Harvard University’s Joint Center for Housing Studies.

But which household projects can actually better their chances of selling their home one day?

“Any time a buyer can walk into a house and see it already has the features they want, that’s a huge bonus for the seller,” Anna Maria Mannarino, who runs a design firm in Holmdel, N.J., told realtor.com®. “If buyers feel they need to add key features or designs, they’re going to calculate how much it will cost and then lower their bid.”

Realtor.com®’s research team pinpointed home features that can help sell a home in the fastest time for the best price. They analyzed more than 1 million single-family listings on realtor.com® in February and identified the home features found in homes most often with the highest list prices and that went under contract most quickly.

The 10 most profitable home features for sellers banking on quick sales, according to realtor.com®, are:

  1. Chef’s kitchen/gourmet kitchen

  2. Theater room

  3. Home gym

  4. Three-car garage

  5. Solar panels

  6. Quartz counters

  7. Exterior lighting

  8. Tennis court

  9. Home office

  10. In-ground pool

OK, let's take a closer look at trends that could help you make bank when it comes time to cash in and sell your home.

Kitchen makeovers bring in the dough

Kitchen

Once upon a time (say, when you were growing up), most kitchens were drab, unsexy spaces that folks didn't spend much time in beyond preparing and consuming dinner. But as the open kitchen trend has exploded, they've become centerpieces of the home—way more visible, personalized, luxurious, and important to buyers. Homeowners have upgraded to chef's and gourmet kitchens (No. 1 on our list), making them glamorous showpieces where they can entertain their friends.

These days, trendsetters are choosing dark and moody color palettes, like black and navy, over the more bland white, gray, and neutral shades. They're opening the rooms to the outdoors by installing walls of windows or double doors that open to the yard. And open shelving (versus the classic kitchen cabinets) is gaining more traction.

"Even if you don’t consider yourself a big foodie or a master chef, higher-end kitchens have a huge appeal," says Jamie Novak, a Los Angeles–based professional organizer and author of “Keep This Toss That.” She works with homeowners who are planning to stay put as well as those getting ready to list their properties. "When the appliances are pretty and functional, it’s a win-win.”

Homes with chef's kitchens sell for a median $599,000—more than double the national median of $295,000. Chef's kitchens generally feature an open layout big enough to accommodate plenty of cooks in the kitchen, a large island, a gas cook range built for larger, hotter flames, a Sub-Zero refrigerator and freezer, and multiple sinks and ovens. Popular brands include Viking ovens and ranges, Bosch appliances, and Kohler and Moen faucets and sinks.

The average kitchen overhaul cost $12,300, while major kitchen overhauls usually cost upward of $40,000, according to the Harvard University study.

"People look at a kitchen, and if they don't like it—they'll often pass on the house," says Lori Wellman, owner of Lincoln Cabinet, a Lincoln, NE–based remodeler.

Quartz counters (No. 6) are also in high demand. The engineered variety (a fancy word for enhanced) doesn't chip as easily as the natural kind, doesn't require much upkeep, and is difficult to stain or damage. Plus there are hundreds of colors, patterns, and textures to choose from.

It was the material of choice for home renovators, rising from a 41% market share in 2017 to 48% in 2019, according to Houzz data.

“[Engineered] quartz is a very, very versatile material," says Nino Sitchinava, the site's principal economist. "You can control palettes and colors and textures really, really well."

Specialty rooms: Why go out when you can stay in?

Rooms

Tony Frenzel

Properties with dedicated specialty rooms, like theater rooms (No. 2) and home gyms (No. 3), showed up in only a small percentage of listings (1.5% and 1.1% respectively). And while they're not as popular as they once were, say design experts, homes that come equipped with such rooms sell for about twice as much as the national median of $295,000. They're fun to enjoy, too!

"At the high end there's real cachet in having those specialized spaces," says Jenni Lantz, manager of DesignLens, a design resource for developers, builders, architects, and interior designers. "Of course you need to have the space for them."

Folks without big bank accounts can also create these spaces on a shoestring, DIY budget. Dark basements can become theater rooms, for example, with the addition of an oversize screen, wireless speakers, and a comfy couch. Popcorn makers are a bonus!

Unlike theater rooms and gyms, mudrooms (No. 11) have been gaining in popularity in recent years, say design experts. These small rooms are where coats and dirty shoes are kept are typically located toward the front of homes, and more homeowners are retrofitting them into their abodes. They're becoming more stylish with rustic, wood benches to store those muddy boots under and fancy coat racks.

"Mudrooms are a fantastic transition from an outdoor space to your indoor living [space]," says organizer Novak.

They cost an average $12,000 to install, according to Fixr, a company that connects owners to home-related services.

Home offices (No. 9) have also become increasingly sought-after as more people work remotely or go freelance. The key is natural lighting, perhaps a window view for the desk, and doors that can shut out the clamor of the kids playing in other parts of the home.

Outdoor features are in

The trend today may be all about indoor-outdoor living. But it wasn't beautifully inlaid patios, outdoor kitchens complete with pizza ovens, or trickling fountains that came out on top for outdoor features. That honor went to three-car garages (No. 4).

"Americans love their garages," says Rick Foster, a managing broker and license partner at Engel & Völkers Annapolis, in Maryland.

Buyers aren't just looking for a place to park their cars. "Having extra storage space is a big benefit," adds Foster.

Certainly prestige comes into play—for many, bigger is indeed better.  But unlike some outdoor features, this one is difficult and costly to add after the fact. Buyers want one already in place.

Other popular outdoor features on our list include solar panels (No. 5), tennis courts (No. 8), and in-ground pools (No. 10).

Solar panels are hot (yes, really) thanks to demand from both climate-conscious buyers and those simply hoping to cut down on their electricity bills. Homes with these features sell the fastest of all of the amenities on our list, at a median 51 days. About 2% of homeowners undergoing remodels have been installing them each year from 2015 to 2017, according to Houzz data.

But be warned: They're not cheap. Installing a 5-kilowatt system, the standard system of about 20 panels, costs around $25,000 to $35,000, according to www.solarpowerauthority.com.

“Solar is a very regional preference," says Sitchinava of Houzz. They're particularly appealing in places that get a lot of sunshine but have high AC bills, such as California, Arizona, and Texas. "The long-term payoff is pretty phenomenal.”

Tennis courts are also appealing, but they can set homeowners back more than $50,000, according to Quality Court Industries, a tennis court construction firm that operates throughout the Southeast.

Even having a shared court open to residents of a community can boost property values. The same goes for in-ground pools, which can be private or shared as well.

Built-in pools are polarizing features in some parts of the country—attracting some buyers while repelling others due to maintenance or liability issues. The cardinal rule for this feature: Install it for your own enjoyment first, resale value second.

"They're consistently popular," particularly in warm-weather areas, says design expert Lantz. "People still like to lay out by the pool.”

Smart home features and other electronics can pay off

Smart home technology (No. 14) is a catchy umbrella term people use to describe everything from a few interconnected appliances or internet-controlled thermostats to fully wired homes. The expensive, built-in approach has waned a bit, but the more ad hoc approach is booming, thanks to smart devices that can be used as simple control centers, like Amazon Echo and Google Home.

"The convenience is unparalleled, and the technology is getting so easy to use," says organizer Novak.

Security systems (no. 12), often smart ones integrated with mobile and other devices, are gaining traction as must-have features. Just 10% of homeowners undergoing remodels had a security system installed in 2015, according to Houzz data. By 2017, about 15% did.

Folks used to have to hire a security company to come in, assess the property, and then install a system that could run anywhere from $600 to more than $1,000. And that doesn't include the monthly monitoring fees. Now, homeowners can pick up a simple, smart home security system from companies like Ring for around $150.

"People really like having an app on your phone and knowing if someone's at your home and being able to speak to them," says Craig Grant, CEO of the Real Estate Technology Institute, an online portal where folks can learn about real estate technology.

Classic indoor amenities have lasting appeal—and a new look

Indoor features

Tony Frenzel

Some things never go out of style. Fireplaces remain a highly sought-after amenity, although today's sleek, electronic models don't have much in common with the ashy traditional hearths. These newer fireplaces are often installed right into wall.

"No matter where your home might be, fireplaces are always welcome," says Nancy Fire, the design and trend forecasting expert behind the HGTV HOME brand.

Other timeless features that boost home values are spacious, walk-in closets. Sometimes folks will even tear down an adjacent bedroom to build that massive closet with floor-to-ceiling shoe and accessory walls, a ladder to store and fetch rarely used items, and seating to make it easier for friends and family to share their outfit opinions, says remodeler Wellman.

Walk-in closets, while still popular, aren't as in-demand as they used to be—and the decluttering movement (and its guru Marie Kondo) can partly be blamed.

"If you’re trying to pare down your clothing, then you don’t want a big walk-in closet to fill," says Novak, whose clients prefer smaller, sliding-door closets. "It just becomes a big mess.”

Is Single-Family Real Estate Still a Good Investment?

Most of us in the property management field already know that, despite occasional risks and business challenges, single-family rentals are good investments. But with the market uncertainties that are now appearing, are these still the right assets to have in your portfolio? The sentiment of high-net-worth investors suggests a resounding “yes.” According to a recent survey by financial services company Millennium Trust, a staggering 90% of people are inclined to invest in alternative assets of which real estate is the top choice. 

Single-family rental properties are at the top of real estate and of interest to a whopping 73% of high-net-worth real estate investors, as stated in the Millennium trust study. Some trends believed to be causing the interest (and continued growth) include downsizing baby boomers, as well as millennials choosing to rent longer so they can keep their options open.

What does the future hold? Some experts believe, in the long term, 13 million additional homes will hit the market by the year 2030, adding to already existing 16 million assets. And in a recent US News and World Report article, Quinn Palomino, co-founder and principal at Virtua Partners in San Diego, believes that the near future is bright.

In the article, Palomino states “demand is high, and supply is still constrained, particularly for entry-level housing. We anticipate rent increases will outpace the overall commercial real estate market, landing in the 5 to 7 percent range.” She also believes that single-family rentals will beat the stock market in 2019 due to low rates and low unemployment.