My website: www.sandralew.com

By the end of 2015, millennial buyers may represent the largest group of home buyers, taking over from Generation X. They prefer smaller units closer to the urban core.  For years millennial buyers preferred renting over homeownership but this may change next year. Prices have returned to a normalcy with a growth rate of around 3 percent predicted for next year rather than the 6 percent seen recently. This affords buyers the time to choose more wisely & be picky with less urgency. People with regular jobs and 20% down finally will have a chance to get into the housing market. Baby boomers continue to downsize as well selling their larger homes to be closer to family which allows for more inventory. This is great news as the housing markets continues to recover.

What Real Estate Trends to Expect in 2015

By Susan Johnston 2 hours ago

 

As housing recovers, prices in many markets across the U.S. have shot up. In fact, RealtyTrac reported that the median sale price of U.S. single-family homes and condos in October had reached its highest level since September 2008. Price appreciation and the lure of foreclosures created a feeding frenzy for real estate investors willing to pay cash and made it harder for traditional buyers to compete. 

But experts say that 2015 will be marked by a return to normalcy and balance for real estate markets across the country. Stan Humphries, chief economist for Zillow.com, predicts that home value growth will slow to around 3 percent per year instead of the 6 percent seen recently, and that will make real estate less attractive to many investors. "It's been a tough market for buyers," he says. "I think it's going to get easier in 2015. Negotiating power will move back to buyers and away from sellers. It will be a much more balanced market." (Too many buyers and too little inventory, or the opposite, contribute to an unbalanced market.) 

Redfin.com's chief economist Nela Richardson agrees. "It's been a clear pattern that the investor activity has been shrinking over time," she says. "Investors like to go in where they can buy low and sell high. Price growth is starting to slow dramatically, so they can't sell much higher than what they buy. Investment property is less compelling in 2014 going into 2015." 

More inventory and less competition from investors means even traditional buyers are becoming "more picky, and they're willing to let a home go if they don't think it's a good fit for them," 

Richardson adds. "Buyers are less worried that they'll miss out on something. Houses are more like buses now. If you miss one, another one will come along." Whereas buyers might waive contingencies in the recent past to make their offer more attractive to sellers, they're now more likely to insist on contingencies for financing and inspections. 

That said, foreign investors may still find high-end American real estate appealing because of economic turbulence in their home countries. For instance, the U.K. is toying with a so-called "mansion tax" that would apply to those who own properties worth more than 2 million British pounds (or over $3 million), and China has placed restrictions on homebuying in large cities. Some foreign investors also worry about currency fluctuations devaluing money they hold in their home countries. "That section of the market is still all cash -- people buying up these huge places because it's safer here than in their own countries," says Herman Chan, real estate broker with Bay Sotheby's International Realty in San Francisco. 

Buyers from outside the U.S. may use their properties as a rental, a pied-à-terre (a secondary residence used for travel) or a residence for children studying at American colleges. But for buyers looking for more moderately priced homes, 2015 could offer a respite from bidding wars and all-cash offers. "People who've been on the fence about selling are finally going to pull the trigger, which is great for buyers [because it creates more inventory]," Chan says. "Now people with regular jobs and 20 percent down finally have a chance to get into the market." 

For years, many millennials have postponed homeownership in favor of renting, but that may also change next year as a growing number of Gen Yers start families and seek more stability. "By the end of 2015, millennial buyers will represent the largest group of homebuyers, taking over from Generation X," Humphries says. "They prefer smaller units closer to the urban core, so it will be interesting to see whether they follow the time-honored path towards the periphery of the metro." 

Baby boomers are also likely to make a move in 2015. Chan says he's "gotten so many calls from baby boomers recently saying, 'We're downsizing, and we're moving to be closer to our grandkids or our son or daughter.'" With fewer homes underwater, they're finally in a position to sell. 

While mortgage rates may not remain at the historic lows seen recently, more people may qualify for home loans as issues like foreclosures or short sales age out of their credit reports and Freddy Mac and Fannie Mae ease mortgage eligibility. Freddy and Fannie recently announced a new mortgage program for buyers with a down payment as low as 3 percent. "Freddy and Fannie have always been the industry leaders, and they're saying, 'It's OK to lend to people who don't have 5 percent down. It's OK to extend credit in a reasonable and safe manner," Richardson says.

Source: http://news.yahoo.com/real-estate-trends-expect-2015-144806401.html

 

My website: www.sandralew.com

Good news for Silicon Beach. Google is expanding again this time in Playa Vista near Marina Del Rey. This is phenomenal as it further makes and brands the area as the tech and innovation capital of Los Angeles. It's a real key move and will continue to attract talented people to the area as the entire area is already booming. Google is projected to bring as many as 6,000 well paid workers to the area. Yahoo is also expected to lease 130,000 square feet of office space in a separate deal in Playa Vista too. Wow! Lots of positive news for the area.

Google buys 12 acres in Playa Vista, vastly expands presence in L.A.

 

Google is expected to lease the historic hangar where aviator Howard Hughes built his famous “Spruce Goose” airplane. (Annie Wells, Los Angeles Times)

By Roger Vincent and Andrea Chang 

December 3, 2014 

 

Google Inc. is making a bold move to expand in Southern California, the nation's nexus of technology and entertainment.

The tech titan has spent nearly $120 million on 12 vacant acres next to a historic hangar where aviator Howard Hughes built his famous "Spruce Goose" airplane in the Playa Vista neighborhood near Marina del Rey. The land is zoned for nearly 900,000 square feet of commercial space that could house offices or studios, vastly more room than Google now occupies in a handful of buildings in Los Angeles County.

Google is also expected to lease the Hughes hangar built in 1943. The 319,000-square-foot building has recently housed sound stages for movie and television production.

"This is phenomenal news for the Westside and for the Los Angeles economy," said City Councilman Mike Bonin, who represents the Playa Vista area. "It really makes and brands Playa Vista as the tech and innovation capital of Los Angeles."

The Mountain View, Calif., company wouldn't detail its plans. But if Google is to develop the land as zoned, the Playa Vista site and the Hughes hangar could be home to as many as 6,000 well-paid, highly educated workers. Internet firms such as Google commonly set aside about 200 square feet per employee.

Local entrepreneurs and investors say they're excited about the possibilities that a stepped-up Google presence could bring.

More Google offices mean more quality engineers, many of whom may eventually launch their own ventures in Los Angeles, which in turn will lure more investors and more developers, said Paige Craig, a prolific angel investor who lives in Venice. That self-perpetuating cycle will boost the tech economy, he said.

"The real key to this is Google is going to attract talented people to come to L.A.," Craig said.

The deal also underscores the region's growing influence as a breeding ground for new forms of digital entertainment.

That's especially important as the technology and entertainment sectors continue to converge. These days, companies such as Amazon.com Inc. are churning out original programming, celebrities are launching their own gaming apps, and Apple Inc. recently spent $3 billion to acquire Beats, which included its online music streaming service.

Playa Vista has become a major hub of innovation in recent years. At first, the neighborhood's appeal largely stemmed from its location near major freeways, the Westside and Los Angeles International Airport. Now a vibrant community encompasses media companies, ad agencies, start-ups and established titans.

Last year Microsoft Corp. opened a roughly 20,000-square-foot space in Playa Vista to house 130 employees who had previously been in downtown L.A. Facebook Inc. has operations nearby. The neighborhood boasts the headquarters of online advertising platform Rubicon Project, consumer electronics and accessories maker Belkin International and ICANN, the nonprofit organization that is responsible for assigning Internet domains.

Playa Vista is also home to USC's Institute for Creative Technologies, which has attracted several top virtual reality researchers. The institute is where Oculus Rift founder Palmer Luckey once worked as a designer.

A juggernaut like Google would help bring even more attention, developers and investment to the booming area.

"It increases the quality of the work, it increases the ability to network, it increases the ability to attract more people here," said Kieran Hannon, chief marketing officer at Belkin, which has 450 employees in Playa Vista. "It has a complete knock-on effect."

Google's Playa Vista acquisition and pending lease deal reflect a rapid buildup of bricks-and-mortar facilities for the Internet company.

Google has already bought or rented about 6.2 million square feet of space this year in the Bay Area, bringing its total there to 15 million square feet, according to real estate brokerage statistics.

Three years ago, Google increased its Southern California presence by opening a campus in Venice, where it leased 100,000 square feet in three buildings for about 600 employees. One of those buildings is the Binoculars Building, a three-story office on Main Street designed by architect Frank Gehry.

Google also rents a 41,000-square-foot video production facility for subsidiary YouTube in a renovated former Hughes building in Playa Vista.

A Google spokeswoman said the company, which typically likes to expand near its existing properties, will continue to rent the 69,000-square-foot Binoculars Building. Google views the Playa Vista land purchase as a long-term investment and has no particular design in mind for the site, she said.

Google and property seller Lincoln Property Co. did not disclose how much Google paid for the land, but real estate experts familiar with the transaction who were not authorized to speak about the deal valued the sale at nearly $120 million.

Lincoln is the largest commercial developer in Playa Vista, having built five office buildings including a new West Coast headquarters for big-screen cinema purveyor Imax Corp. that is under construction next door to the new Google property.

Lincoln is also building the Runway, a $260-million retail, housing and office project that will become the commercial heart of Playa Vista when it opens early next year. Other developers are in the process of building an additional 2,600 housing units.

The introduction of potentially thousands of affluent Google workers to Playa Vista, a self-contained neighborhood of about 6,500, would drive the development of new shops, restaurants and housing.

More newcomers are expected to flood Playa Vista in the coming months. Google competitor Yahoo Inc. is expected to lease about 130,000 square feet of office space at Playa Vista in a separate deal with landlord Tishman Speyer, said Jeff Worthe, who co-owns an office complex in the area.

"There is a giant consolidation of the tech industry and content creators coming together, and Playa Vista is the direct beneficiary," Worthe said.

Tenants in Worthe's converted former industrial complex, called the Reserve, include TMZ, Warner Bros, Microsoft, Sony PlayStation and Verizon.

Mike Jones, founder and chief executive of Santa Monica incubator Science, said Google's proximity to existing start-ups in L.A. might entice it to go on a buying spree. That would lead to more technical jobs and set an example for young entrepreneurs on how to successfully create and grow a company in L.A., which would drive more entrepreneurship, he said.

The hope is that Google will invest heavily in Los Angeles and develop an appetite to acquire more companies in Los Angeles, said Jones, the former chief executive of Myspace.

"L.A. needs to turn into a city of acquirers," he said, "not a city of the acquired."

Source: http://www.latimes.com/business/realestate/la-fi-playa-property-sale-20141203-story.html#page=1
 

 

 

 

My website: www.sandralew.com

Beach close properties are still the hottest!! While housing market is a bit sluggish the high end is hopping!! The number of homes bought for $2 million or more in recent months has been the highest ever on record. Low mortgage rates and wealthy international investors contribute as well as does doing well. California's real estate market is a bargain compared to New York or London.

Quotes:
"High-end home sales are surging in "Silicon Beach," too, with tech entrepreneurs and Bay Area transplants scooping up multimillion-dollar homes in Santa Monica, Venice and Marina del Rey. Many of the buyers work in the area, said Miller, and prefer walkable neighborhoods, relatively close to work, to the traditional hubs of Westside glitz."

 "Then there's the formerly sleepy South Bay. The average sales price in Manhattan Beach through the first nine months of the year topped $2.2 million, said Barry Sulpor at Shorewood Realtors. That's up from $1.85 million in the same period last year. Even empty lots in the beach town's "Tree Section" are going for $1.3 million."

As you get closer to the beach prices go higher. There seems to be no end in rising prices for the high end market.

High-end home sales are surging in Southern California

 

The number of Southern California homes bought for $2 million or more in recent months is the highest on record. Above, Rafael Lopez, left, and his wife, Jacqueline, step out of a model luxury home in Irvine's Orchard Hills community. (Cheryl A. Guerrero, Los Angeles Times)

 

By Tim Logan ; November 23, 2014

 

By most measures, the housing market these days is a bit sluggish. Prices are flat. Sales are drooping. A lot of people are priced out.

 

But not everyone. The high end is hopping.

Luxury home sales in Southern California are hitting levels not seen in decades. The number of homes bought for $2 million or more in recent months is the highest on record. Sales worth $10 million or more are on pace this year to double their number from the heights of the housing bubble.

"It's pretty mind-blowing, to be honest," said Cindy Ambuehl, an agent with the Partners Trust in Brentwood. "The luxury market has been completely on fire."

Low interest rates, a strong stock market and waves of cash sloshing in from overseas are boosting demand for high-dollar homes. A record 1,436 homes worth $2 million or more were sold in the six-county Southland in the second quarter, according to CoreLogic DataQuick.

In the more recent third quarter, 1,431 were sold. That was up 14% from the third quarter of 2013, and well ahead of any three-month period in the housing bubble years of the mid-2000s. This comes even as the broader market has plateaued, with prices in the Southland still about one-fifth below their pre-crash highs and sales at less than two-thirds their 2005 pace.

It reflects a housing market that is now moving at two speeds, said Selma Hepp, senior economist for the California Assn. of Realtors. Fast for the high end, sluggish for the rest.

"It's just a completely different story between the two segments of the market," she said. "Those who are doing well are doing really well."

The biggest difference in the luxury market between now and a decade ago is that the world is smaller, said Drew Fenton, an agent who specializes in high-end homes at Hilton & Hyland in Beverly Hills. Wealthy international buyers are scooping up second homes, investment properties and safe havens for their cash. And it's easier for them to scout — and travel — the world to do so.

"Everything's just more global now," he said. Ten years ago "it was much harder to reach those people and they didn't travel as much."

Now they are, and so are the agents who cater to them. Sandra Miller, a broker at Volker & Engels in Santa Monica, last week was jet-lagged from a trip to London, where she met with nearly two dozen brokerages that represent high-end buyers. At the end of the month, she's off to Kuwait. Every week, she has a conference call with international agents.

The Southland scores points with these buyers for its weather, its glamour and a population diverse enough that nearly any transplant can feel at home. And despite its reputation as one of the nation's least-affordable housing markets, Los Angeles can look like a steal compared with other high-end havens.

"We talk to private wealth managers around the world who think California is a very good market right now," Miller said. "Compared to New York or London, L.A. real estate is a bargain."

But it's not just foreign money that's heating up the high end.

A surging stock market has boosted portfolios for domestic buyers in recent years, especially for those who have money to invest. Low interest rates have made mortgages cheap. And banks — still risk-averse — are offering lower rates and better terms to deep-pocketed borrowers than to cash-strapped first-time buyers. Meanwhile, wealthier households have seen their incomes grow faster than average in recent years.

Builders are recognizing this. Aliso Viejo-based home builder New Home Co. has several developments underway in Orange County targeting high-end buyers, including 6,700 square-foot five-bedroom homes in Irvine and ocean-view condos in Newport Beach.

Sales have been brisk, said Joan Marcus Colvin, New Home's senior vice president of sales, marketing and design, especially at that Newport condo building, the Meridian, where 34 units have sold since February, at an average price of nearly $3 million. That's without even having a model home to show customers — the site is still under heavy construction. Renderings and drone shots of the views are all that's offered.

"It's quite a testament to the strength of the high end of the market," Colvin said. "These were bought sight unseen. We couldn't even stand people there and show them it."

But it's the first new home development in Newport Center in a quarter-century, Colvin said, so there's demand. And income growth has been strong in coastal Orange County, minting new buyers for high-dollar homes. The same trend is happening in places less associated with luxury than Fashion Island.

High-end home sales are surging in "Silicon Beach," too, with tech entrepreneurs and Bay Area transplants scooping up multimillion-dollar homes in Santa Monica, Venice and Marina del Rey. Many of the buyers work in the area, said Miller, and prefer walkable neighborhoods, relatively close to work, to the traditional hubs of Westside glitz.

"These people don't want to commute an hour and a half to Beverly Hills, which is a whole 13 miles away," Miller said.

Then there's the formerly sleepy South Bay. The average sales price in Manhattan Beach through the first nine months of the year topped $2.2 million, said Barry Sulpor at Shorewood Realtors. That's up from $1.85 million in the same period last year. Even empty lots in the beach town's "Tree Section" are going for $1.3 million.

"That's just lot value," Sulpor said. "And as you get closer to the beach it goes up from there."

Prices have been climbing so fast that even fairly recent buyers say they're lucky they got in when they did. About 18 months ago, Ray Ahn and his wife bought a place half a block from the beach, a pocket listing that was never widely marketed. Before the purchase even closed, the house's appraised value started climbing. And of the eight or so houses that neighbor Ahn's, three have gotten high-end remodels since he moved in.

"I probably wouldn't be able to buy here today," said Ahn, who works for an investment firm in downtown Los Angeles.

But to live by the beach, he said, it's worth it. So did Daphna Oyserman. She and her husband — professors who relocated from the University of Michigan to USC — spent $2.2 million in January for a house just a few blocks from the sand. They expected to pay a premium to live in a nice beach town, Oyserman said, and they did. But, although their house is "half the size at three times the price" of what they owned in Ann Arbor, Mich., Manhattan Beach offers amenities Michigan can't.

"We thought, if we're moving to L.A., we'd like to enjoy it," she said. "In the morning I go for a run on the beach. When we go to sleep we can hear the ocean."

These well-heeled professionals have played a big part in the South Bay's surge, said Sulpor, along with those in the tech industry who prefer a more laid-back scene than Santa Monica and a growing cadre of professional athletes. Then there are young buyers who walk in with trust funds or family money.

"A lot of folks in their 20s and 30s are coming in and taking properties off the table at $3 million or $4 million," Sulpor said. "Sometimes all-cash."

Ambuehl said her luxury buyers also are starting to skew younger. Among her clients, tech entrepreneurs and other wealthy shoppers in their 20s and 30s are gradually replacing baby boomers, who often weren't as young when they earned enough to afford a big-ticket house. They're looking for different kinds of homes — often with more outdoor space — and in different neighborhoods. And, she predicts, they'll be driving up the high end of the market for a long time.

"You've got 70 million baby boomers. You also have 70 million Gen Yers. They are a huge part of our buyer pool," she said. "It's a market we have to pay attention to."

Source: http://www.latimes.com/business/la-fi-luxury-home-sales-20141124-story.html#page=1

 

My website: www.sandralew.com

Good news! The US economy is predicted to have a 3 percent growth rate in 2015. Consumers are more upbeat and businesses confident which help foster improving economic growth.This optimism produces positive effects on our economy by adding more and higher paying jobs which provide the financial support for a continued sunny housing outlook.

5 Real Estate Predictions for 2015

Daily Real Estate News | Tuesday, November 18, 2014 

 

Expect the home-purchase market to strengthen along with the economy in 2015, according to Freddie Mac's U.S. Economic and Housing Market Outlook for November.

"The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better," says Frank Nothaft, Freddie Mac's chief economist.

 "Governmental fiscal drag has turned into fiscal stimulus; lower energy costs support consumer spending and business investment; further easing of credit conditions for business and real estate lending support commerce and development; and consumers are more upbeat and businesses are more confident, all of which portend faster economic growth in 2015.

And with that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity."

Freddie Mac economists have made the following projections in housing for the new year:

1. Mortgage rates: Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.
2. Home prices: By the time 2014 wraps up, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015. "Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers," according to Freddie economists. "Historically speaking, that's moving from 'very high' levels of affordability to 'high' levels of affordability."
3. Housing starts: Homebuilding is expected to ramp up in the new year, projected to rise by 20 percent from this year. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.
4. Single-family originations: Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.
5. Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.

 Source: http://realtormag.realtor.org/daily-news/2014/11/18/5-real-estate-predictions-for-2015

My website: www.sandralew.com

California's peninsula on the bay area as well as Newport in Southern California made up the nation's top 9 out of 10 real estate markets for being the most expensive. Actually California made a virtual sweep for top markets that had at least 10 listings for 4bedroom, 2 bath homes which the study was based upon. Many high tech companies are located in these areas which continue to contribute to have positive economic effects. Location matters...

The 10 most expensive real estate markets in the US

 Robert Frank - CNBC November 13, 2014

Visions of America | UIG | Getty Images

 

If you think Apple or Facebook stock is expensive, look at the price of real estate near their headquarters.

Los Altos, California, in the heart of Silicon Valley, is now the most expensive real estate market in the country, according to a new report from Coldwell Banker. The average four-bedroom, two-bath home in Los Altos costs $1,963,100—about 30 times the average cost of a home in Cleveland, the country's most affordable market.

"The continued success of many tech companies throughout Silicon Valley has brought markets such as Los Altos into focus," said Joe Brown, managing broker of Coldwell Banker Residential Brokerage in Los Altos.

In fact, California has a virtual sweep on the 10 most expensive markets in the country, claiming all but one of the top 10 spots. Granted, Coldwell didn't include New York City in its data, so the results are skewed.

But the list shows just how big the economic ripple effects of the tech boom have become in California.

10 most expensive real estate markets in the U.S.

Rank	City	Average price
1	Los Altos, CA	$1,963,100
2	Newport Beach, CA	$1,904,083
3	Saratoga, CA	$1,867,980
4	Redwood City/Woodside, CA	$1,430,329
5	Los Gatos, CA	$1,307,408
6	San Francisco, CA	$1,294,250
7	Sunnyvale, CA	$1,267,185
8	Moraga, CA	$1,129,300
9	San Mateo, CA	$1,093,346
10	Wellesley, MA	$1,090,089

Source: Coldwell Banker

 

For the report, Coldwell Banker pulled average listing prices of four-bedroom, two-bathroom real estate properties on coldwellbanker.com between January 2014 and June 2014. Markets without at least 10 four-bedroom, two-bathroom listings on the website (such as New York City) between January 2014 and June 2014 were excluded from the ranking.  

 

Source: http://www.cnbc.com/id/102179051#.

My website: www.sandralew.com

El Segundo has another new mall coming to town next summer.  "This is a really affluent, educated, sophisticated pocket of Southern California " which borders on Manhattan Beach thus developers have found it challenging to find the right mix to appeal to the area that already offers so much.

This new location is between two existing established malls (one across Rosecrans in Manhattan Beach Mall and the other just to the North in El Segundo Plaza) and down the street (Rosecrans) from several mid to upper scale restaurants. This rules out a number of stores/restaurants... The selective list of signed tenants thus far are Lucky Brand, Atheleta, Mendocino Farms, Superba Food & Bread, ShopHouse and True Food Kitchen. Looks to me like the mix should be another success!

Developer selectively signing up tenants for El Segundo mall

 

Federal Realty Investment Trust is building the Point, shown in an artist's rendering, at the northeast corner of Sepulveda Boulevard and Rosecrans Avenue. (Federal Realty)

By Roger Vincent; November 5, 2014 5:00 am

An $80-million outdoor shopping and dining complex under construction in El Segundo has signed up nearly half of the tenants expected for the mall when it opens next summer.

Federal Realty Investment Trust is building the lushly landscaped center, called the Point, at the northeast corner of Sepulveda Boulevard and Rosecrans Avenue that it hopes will become a meeting place for South Bay families and workers.

As designed by Architects Orange, the Point will include a large outdoor grass courtyard, a children's play area, casual seating and fire pits.

So far, the developers have selected a mix of popular but not nationally prevalent eateries, retailers and an exclusive fitness studio.

It has been challenging to find tenants likely to appeal to the demanding South Bay audience, said Jeff Kreshek, head of leasing on the West Coast for Rockville, Md.-based Federal Realty.
"This is a really affluent, educated, sophisticated pocket of Southern California," Kreshek said.

Athleta, an upscale fitness fashion brand for women owned by Gap Inc., will sell apparel and gear for yoga and seasonal sports such as swimming and running. Athleta will also offer free in-store fitness classes with local instructors.

Los Angeles denim and fashion giant Lucky Brand will open its largest store in the country at the Point in what is intended to be a first-of-its-kind flagship location, Kreshek said. Also on the fashion front will be a location of Orange County retailer No Rest for Bridget, which specializes in trendy, affordable apparel for career women.

For diners, the mall landlords have signed Los Angeles artisan sandwich maker Mendocino Farms and Superba Food & Bread, a coffeehouse, wine bar, restaurant and marketplace created by the founder of Pitfire Artisan Pizza.

True Food Kitchen, created by boutique restaurant group Fox Restaurant Concepts, will offer dishes based on the principles of doctor and author Andrew Weil. Another Fox Restaurants eatery will be North Italia, a traditional Italian restaurant.

ShopHouse, which was developed by Chipotle, will serve an Asian interpretation of fast food. Other retailers are in negotiations for the remaining space, Kreshek said.

"We are trying to curate the right mix of tenants," he said. "We expect to open very close to full."

Source: http://www.latimes.com/business/realestate/la-fi-el-segundo-tenants-20141105-story.html

My website: www.sandralew.com

Personality traits may predict your real estate home buying decisions of buying vs. renting as well as preference for fixed rate mortgages vs. adjustable rate loans.

In Real Estate, Your Personality Makes You Predictable

Are you neurotic or agreeable? The answer matters, since your personality affects your home-buying decisions.

By Stefanos Chen    Oct. 29, 2014 11:04 a.m. ET

 

Are you efficient, organized, thorough, diligent and detail oriented? Then you’re a good candidate for a fixed-rate mortgage.

A new study finds that personality traits can help predict our real-estate decisions. Similarly, a second study finds that in states with a relatively predominant personality type, real-estate decisions often reflect that personality.

Researchers in the first study administered a widely used personality-assessment test to a diverse sample of 1,138 respondents. The test asks takers to rate themselves on a scale from 1 to 5 on questions that measure standard personality traits: Openness (think: artistic and imaginative), Conscientiousness (efficient, organized), Extroversion (sociable, energetic), Agreeableness (forgiving, undemanding) and Neuroticism (tense, moody).

Once the researchers established the personality types of the respondents, they then asked five questions about their real-estate preferences, such as the type and duration of a mortgage, whether to rent or buy, and whether to invest in real estate or stocks. (The findings were controlled for variables like level of education, homeownership, age, gender and income.)



The results showed “a very solid correlation” between personality and real-estate choices, said co-author Danny Ben-Shahar, a professor at Tel Aviv University. Neurotic people, for example, prefer homeownership over renting. When they do buy, they opt for a mortgage with a lower loan-to-value ratio, which means the loan amount is low relative to the value of the home. Prof. Ben-Shahar suspects this is because neurotic people are more averse to risk.

In another example, conscientious people preferred investing in real estate over stocks. One explanation: They are more willing to postpone gratification and invest in something that is considered less risky and offers diversification to a portfolio.

The overall findings will be published in the Journal of Behavioral and Experimental Economics.
In a second study by the same team, researchers looked at existing results of the same personality test, but from a much larger sample—about 1.6 million people. Predominant personality types were then matched with housing data from the U.S. Census and the Federal Reserve Bank of New York. Here, too, the personality made a difference on real-estate choices.

States with relatively high marks for Openness—South Carolina, for instance—tend to choose fixed-rate mortgages. The more Agreeable ones, like Tennessee, prefer owning to renting. Neurotic states, like New York, choose lower loan-to-value ratios on the mortgage.

This isn't to say that every state’s real-estate profile lines up exactly with personality traits, Prof. Ben-Shahar said. Still, an individual personality can have real consequences on the way we choose to live, he noted.

Source: http://online.wsj.com/articles/in-real-estate-your-personality-makes-your-predictable-1414595055

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People are getting wiser weighing all their options and taking the time to plan before taking the leap to just buy as it has been engrained traditionally to those generations in the past. The upscale rental market is meeting the needs of the millennials, empty-nesters, and newly single as we are shifting to an accepted rental culture.

Having the flexibility to adjust to the changing needs of a new reality is important to many who don't want the long term commitment home ownership brings. Also when purchasing a home they may not be able to afford all the amenities they want in their price range. Rather than purchase a home far too early in their lives, they are taking their time to plan out their choices and options. Americans are looking at real estate with more rational eyes to meet their current needs.

Hot New Real Estate Trend

Mary Buffet Posted: 10/21/2014 3:24 pm EDT Updated: 10/22/2014 2:59 am EDT 

Why more Americans are aggressively entering into upscale rental marketplace.

As people begin to seriously think about where to live, there is a remarkable sea change afoot with millennials, empty-nesters, and the newly single. Instead of plunging in to buy a home, people are weighing other options. We all know how life is supposed to work. Boy meets girl, they graduate from college, get married, and spend an exciting turn in The Big City before they settle down to raise a family in the suburbs.

Developers instilled that home ownership was at the heart of creating a safe place for all families. After the first generation of 30-year mortgagees found their way into the marketplace, home ownership rates soared. Soldiers returning after World War II used the GI Bill to purchase their very first home with a down payment of a dollar.

In good times and bad, home ownership remained a safe bet even when the contours of life changed. Somebody always got the house in a divorce. Even after the children were fully grown and on their own, parents would keep the Big House and it would fill with grandchildren during the holidays.

Then everything went to hell. As the housing refinance industry became a financial behemoth, home values rose beyond the point of sustainability. We all know what happened after that. A sick housing market nearly killed the financial industry and we almost had the Second Great Depression. Only substantial federal intervention kept the nation from revisiting the breadlines of the 1930s. Worse, a generation of young teenagers saw the fear and anxiety on the faces of their parents as they fell behind on their house payments and stumbled into foreclosure.

Nearly a decade later, those same teenagers have graduated from college, entered the job market and are looking for places to live. However, unlike their parents, they are waiting before they purchase their first home. Meanwhile, empty-nesters are downsizing and looking to jettison square footage they no longer need. Those who are newly single or are taking a job in the Midwest, where there is job growth, need a nice place to live. Rather than go through all of the paperwork of purchasing a home, more and more of them are looking at upscale rentals. What's more, they are staying. The rate of home ownership, which crested at nearly 70 percent before the meltdown, fell dramatically to its current rate of 65 percent.

What is driving all of this? First, Americans are looking at real estate with more rational eyes than they did a decade ago. A herd mentality dominated the period between 1995 and 2007, where people bought any parcel to ensure they would not be left behind. The housing appreciation of that period seemed too good to be true. Homeowners soon refinanced their mortgages and many used it to underwrite their own extravagance as they lived beyond their means. Even after the economy has rebounded, millions still remain handcuffed to zombie mortgages that will remain upside-down for the rest of their lives.

Second, qualifying or refinancing a traditional 30-year mortgage is far harder today than it was during those go-go years. The days of "Alt A" loans other subprime tools are long gone. The times when you needed little more than a smile and a signature to purchase a home have been replaced by a stricter regulatory demand for full documentation for all phases of the loan origination process. Even Ben Bernanke, who, while chairman of the Federal Reserve, worked overtime to keep the nation from a complete economic collapse, was recently turned down to refinance his mortgage.

Third, we are shifting from an ownership to a rental culture. This has a greater social implications impact far beyond real estate and we can see it in our everyday lives. Instead of spending thousands of dollars on DVDs for home use, people are paying Netflix $8 per month for access to their entire film library.

"When it comes to choosing a home," remarked Jay Madary CEO of JVM Realty Corporation, a Chicago-area privately held multi-family investment and property management company, "many Americans now consider renting upscale apartments because they can get amenities they may not otherwise find in a home within their price range. They can have granite countertops, high ceilings, walk in closets, as well as access to private fitness centers and resort style pools and gathering areas." If they purchased a pre-owned home, chances are that it will be far older than an upscale apartment and if they wish to upgrade to those modern amenities, it will come out of their own wallet. With an upscale rental, you can get what you want today. Best of all, there is no long-term commitment and no ongoing maintenance obligation.

Homes can become "long in the tooth" after a decade. Appliances need to be replaced and exteriors as well as interiors need to be repainted. Older homes come with older problems. They were designed and built for what families wanted in the 1960s, '70s, and '80s, but you're living in 2014. Who knew what a "smart home" was back in 1973? Also major upgrades can quickly become expensive and these costs will compete alongside college tuition payments for children or extra support needed for aging parents. Besides having to pay back those college loans.

Let's not forget the disruption that comes with life's little surprises like marriages, divorces, blended families, job changes, or even periods of unemployment. Having the flexibility to adjust to your new reality is critical. Should you choose the upscale apartment option, you can simply move out at the end of your lease and resettle into something else that better suits the needs of the moment.

Yes, renters will lose the tax benefits that come with home ownership but if you rent an upscale apartment, you need to see the bigger picture. Before you sign that mortgage paperwork for that "fixer-upper" of your dreams, you need to take into consideration the additional costs of modernizing your new purchase. Those costs alone could quickly eat up any tax benefits. If you don't believe me, check out the cost of a basic kitchen remodel.

In this area, Americans have become wiser. Rather than purchase a home far too early in their lives, they are taking their time to plan out their choices and options. Rather than deal with the headaches that come with modernizing an older house, more and more of them are opting for a turn-key solution that comes within the upscale rental market where they have their cake and eat it too.

With this trend comes the opportunity for investors to balance their portfolio with holdings in a real estate fund.

Source: http://www.huffingtonpost.com/mary-buffett/hot-new-real-estate-trend_b_6023398.html

 

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For affluent buyers with well established credit there's an upside to the plunging stock market as mortgage rates have fallen again. With investors balling out of the stock market and moving their monies into treasury bonds it's pushing down the government's borrowing costs to the lowest level since June 2013. When treasury yields fall so do mortgage rates as cost of borrowing is lower. This is good news for those looking still to refinance too. Mortgage rates for 30 year loans are predicted to drop to 4%. Construction loan rates should follow and drop as well. Lower rates for home loans boost new construction as well as purchases. Though with lower rates may create demand for home sales again and may drive home prices up again as well.

Lower mortgage rates a silver lining of stock market drops

 

With investors piling into ultra-safe U.S. Treasury bonds, fixed mortgage rates are trending down, which could perk up the lethargic real-estate industry. (Keith Srakocic / Associated Press)

 

By E. Scott Reckard October 15, 2014  4:08pm

If there's an upside to a plunging stock market, it's that mortgage rates are falling too.

Investors bailing out on stocks have piled into ultra-safe U.S. Treasury bonds, pushing down the government's long-term borrowing costs on Wednesday to the lowest level since June 2013 — about 2.1% annual interest on the 10-year Treasury note. That yield was more than 2.5% at the end of September.

That means fixed mortgage rates, which tend to track the long-term Treasury yield, also are trending down. And that could perk up the lethargic real-estate industry.

This is roughly the decline in fixed mortgage rates from the start of the year, from 4.5% to 4%. - Mark Zandi, chief economist at Moody's Analytics

 

First-time homebuyers and those with less than perfect credit histories still struggle to qualify for loans, a byproduct of the mortgage meltdown. But the lowest-risk buyers and refinancers have been enjoying loans at 4% — or even less — in recent months. That's a surprise during a period when the Federal Reserve has been winding down its program aimed at lowering long-term rates.

Mortgage broker Roger Kumar delivered good news this week to a refinancer with plenty of home equity: a 30-year loan at a fixed rate of 3.875% with almost no fees.

"The only cost was a $480 appraisal fee," said Kumar, president of Trident Mortgage Group in Solana Beach.

The latest market movements may mean that low rates could become the norm again, according to Barclays Research analysts who track the market.

"If [Treasury] rates stay where they are currently, we believe it is only a matter of time before primary mortgage rates drop sharply, too," the analysts wrote in a note Wednesday to investors who buy mortgage bonds.

They projected the average rate for a 30-year home loan could drop to 4%. The rate, they said, has averaged 4.3% since the middle of last year — the point at which mortgage costs shot up on word that the Fed would pull back on its economic stimulus program which involves massive monthly bond purchases.

Barclays analysts said buyers of 30-year mortgage bonds backed by Fannie Mae were getting a stream of payments equivalent to a 2.75% annual return as of Wednesday morning — the lowest level since May 2013.

Lower rates for home loans boost new construction as well as purchases, said Mark Zandi, chief economist at Moody's Analytics. A decline of half a percentage point in mortgage rates ultimately lifts home sales by close to 250,000 a year, Zandi said, and a half-point cut also increases housing starts by 110,000 units per year.

"This is roughly the decline in fixed mortgage rates from the start of the year, from 4.5% to 4%," Zandi said.

To be sure, other factors can keep mortgage rates from immediately following trends in Treasury yields. For example, lenders sometimes resist cutting rates to boost profit when they sell their loans.

Mortgages at higher rates command higher prices, assuming all else is equal.

The nation's leading home lender, Wells Fargo & Co., said in its earnings report Tuesday that its third-quarter profit on mortgage sales rose by $266 million, or 38%, compared with the second quarter, even though it wrote only 2% more home loans, largely because it maintained higher rates.

The biggest question, though, is whether lenders will loosen their mortgage standards, enabling more borrowers to take advantage of the low rates.

First-time and marginal borrowers continue to be rebuffed by lenders that set standards higher than those required by Fannie Mae, Freddie Mac and the Federal Housing Administration, which buy or guarantee nearly all non-jumbo mortgages.

The reason, Wells Fargo Chief Executive John G. Stumpf said in a call with analysts Tuesday, is that these government-backed operations have made unreasonably high demands that bankers buy back soured loans. Banks can be required to take back bad loans even in the absence of serious underwriting mistakes, he said, and even on loans that borrowers had paid for years.

In an interview, Wells Fargo Chief Financial Officer John R. Shrewsberry said stricter regulation has in effect created two mortgage markets, only one of which — the one for affluent borrowers with well-established credit — serves borrowers well.

"Every bank wants that customer," Shrewsberry said. "But the first-time buyer, or someone with recovering credit, may have enough income to repay a loan but have a hard time getting one."

Source: http://www.latimes.com/business/la-fi-mortgage-rates-20141016-story.html?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29

 

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Home sales in mid-September have begun to pick up gains again. It's a sign the housing market is reaching an equilibrium after years of big swings which is better for realistic serious buyers. Home prices have been heading towards a better balance than in the past few years. Median price is up on average about 8.1% compared to a year ago with double digit gains. The market now has something to offer both sellers and buyers. It's prime time to get back in the market and when many do the market may pick up again.

Home sales post gains

 

Higher prices have pushed many investors and cash buyers out of the market, while still-low interest rates and an improving economy are luring more so-called regular buyers. Above, a home for sale in Long Beach. (Cheryl A. Guerrero / Los Angeles Times)

By Tim Logan - October 13, 2014 , 5:18pm

Home sales in the six-county Southland grew for the first time in a year in September as prices moderated from last year's torrid gains, according to figures out Monday.

The data are the latest sign of a housing market that's reaching equilibrium after years of big swings, economists say.

Today's home shoppers are more likely to find a less-crowded market with fewer intense multiple-offer situations and more serious, realistic buyers. - CoreLogic analyst Andrew LePage

 

Higher prices have pushed many investors and cash buyers out of the market, while still-low interest rates and an improving economy are luring more so-called regular buyers. And while prices aren't climbing at the 20%-plus pace of last year, they're still rising enough to keep sellers interested in selling.

"It seems like we're heading toward more of a balance," said Mark Gonzales, an agent with Redfin in West Los Angeles. "As long as we can get pricing right in line with people's expectations, we're in balance."

That balance helped drive the number of sales across the region up 1.2% compared with a year ago, according to San Diego-based CoreLogic DataQuick. It's a modest bump, but the first growth of any kind since September 2013, and a big swing from the 18% slide CoreLogic recorded in August.

Sales growth was strongest in Los Angeles and Orange counties, instead of in less-expensive markets farther east. And prices actually fell a bit, with the region's median slipping to $413,000 from its post-crash high of $420,000 in August.

Compared with a year ago, the median price is up 8.1%, and September was the first month in two years that none of the six counties CoreLogic tracks notched a double-digit annual gain.

The market right now has something to offer both buyers and sellers, said CoreLogic analyst Andrew LePage.

"There are still upward forces on home prices: Jobs are being created and families started at a time when the supply of homes for sale … remains relatively low," he said. "Today's home shoppers are more likely to find a less-crowded market with fewer intense multiple-offer situations and more serious, realistic buyers."

It's unclear, though, how long this equilibrium will last.

The California Assn. of Realtors last week forecast that price gains will keep slowing in 2015, and that sales will increase — after falling in 2014 — as buyers have a better chance to catch up to the new higher price points. But in a market in which many buyers struggle to afford a house, the prospect of higher interest rates is a constant threat, said the trade group's chief executive, Joel Singer.

"Any increase is going to have a substantial effect on the number of sales," Singer told a roomful of agents last week at the association's annual convention in Anaheim.

Right now, though, rates are as low as they've been all year. The job market is improving. Even gasoline prices are down, which is putting would-be buyers in a better mood, said Syd Leibovitch, president of Rodeo Realty. His firm, one of the largest brokerages in Southern California, is starting to see both prices and sales pick up again for deals that will close later this fall.

"It was really unexpected," he said. "August was a slower month. It seemed like homes were starting to sit and we were going into a more normalized market. Somewhere around mid-September it picked back up again. We started getting more multiple-offer situations."

Gonzales has been seeing things quicken too. Calls and visits to Redfin's website by prospective buyers were up 50% in September, and those house hunters are now out shopping.

"They were frustrated with the way the market was going. A lot of them took a break," he said. "Now it's a prime time to come back in."

And as they do, the pace of home sales should pick up even more speed, analysts said.

Source: http://www.latimes.com/business/la-fi-home-sales-20141014-story.html

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Real estate is taking shape of a more traditional market for 2015 as we transition to a slower price appreciation environment. The slow down in price gains should help would be buyers to get into the market. It helps improve market affordability as housing inventory continues to improve and a modest uptrend for 2015 is predicted rather than in past few years of median home prices rising as much as 27.5 percent.

REAL ESTATE: Slower gains predicted in 2015 for home sales, prices

Boost in inventory will lead to modest upward trends, economist says.

 BY DEBRA GRUSZECKI / STAFF WRITER  Published: Oct. 7, 2014 Updated: Oct. 8, 2014 1:17 p.m.

Reset, California.

That could be the theme of a real estate forecast that California Association of Realtors chief economist Leslie Appleton-Young delivered Tuesday for 2015, as the real estate industry takes the shape of a more traditional market.

Next year promises to be far less frothy than it has been when it comes to price.

The association’s forecast is projecting a 5.8 percent increase in existing home sales in 2015 to 402,500 units. Median home price for California is expected to rise 5.2 percent to $478,700 in 2015, less than half the projected 11.8 percent rate in 2014.

Sales in 2014 will be down 8.2 percent from the 414,300 existing single-family homes sold in 2013, the state trade association said.

“We are transitioning into a slower price appreciation environment,” Appleton-Young acknowledged in a conference call.

The real estate scene going forward may seem dull, but is characteristic of a market that hit a tipping point after the rocket ride of 2013, she said. Median home prices rose 27.5 percent. Investors swooped in, scooping up foreclosure stock. Inventory was crimped. Cash was king.

That dynamic has significantly impacted housing affordability in California and forced some buyers to delay their home purchase, association president Kevin Brown said. Any slow-down in price gains will help would-be buyers get into the market.

“I don’t think it’s out of the question that within two years from now we could see some declines or retreats in terms of prices,” Appleton-Young said.

Appleton-Young said it may look ho-hum to some, but it will be a good pause for people who have gotten exhausted by multiple offers and competition in the past couple of years.

The percentage of properties fetching multiple offers has dropped to 53 percent from 70 percent in 2013, she said.

“We believe the change will be driven by the increase in inventory we are already experiencing, as well as improvement in the macro-economy and job creation,” Appleton-Young said.

The association predicts 3 percent growth in 2015 in the nation’s gross domestic product, up from 2.2 in 2014. “With the U.S. economy expected to grow more robustly than it has in the past five years, and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015.”
Source: http://www.pe.com/articles/percent-751496-appleton-home.html

 

State O' the Market : LA's Housing Market is Second Most Bubblicious in the US

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Los Angeles's housing market seems to have stabilized for the time being yet it's still the nation's second most overvalued market.

LA's Housing Market is Second Most Bubblicious in the US

Wednesday, October 1, 2014, by Bianca Barragan

Does Los Angeles's housing market still feel way overpriced? It is, but at least it doesn't seem to be getting any worse (or better) right now. Third quarter results are in from Trulia, and they've found the LA market is holding strong at 15 percent "overvalued" (Meaning that the value of a house now exceeds its "fundamental value," based on "historical prices, incomes and rents." Don't consider the idea of "fundamental value" too long or you'll end up living alone in the desert.). That makes LA the nation's second most overvalued market, after Austin, TX, up from third place in the second quarter. LA is rising in the ranks mostly because the rest of the area is headed back toward reasonableness: Orange County was previously at the top of the list, but has moved down to number three, and the Inland Empire (Riverside and San Bernardino areas), last at number four, has slid down to number five. The slower gains in housing prices have likely helped those two regions tumble down the overvalued list, points out the LA Times.

Source: http://la.curbed.com/archives/2014/10/las_housing_market_is_second_most_bubblicious_in_the_us.php#more

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US home sales hit its highest level in more than six years last month! This offers confirmation that the housing recovery remains on course. In August, the West soared 50% in sales to its highest level since January 2008. Despite the increase in sales, supplies have also increased giving buyers more choices as the market is reaching healthy levels of supply and demand.

U.S. new home sales at six-year high; supply increases

September 24, 2014 10:33 AM ET

By By Lucia Mutikani

WASHINGTON (Reuters) - Sales of new U.S. single-family homes surged in August and hit their highest level in more than six years, offering confirmation that the housing recovery remains on course.

The Commerce Department said on Wednesday sales jumped 18.0 percent to a seasonally adjusted annual rate of 504,000 units. That was the highest level since May 2008 and marked the second straight month of gains.

Economists polled by Reuters had forecast new home sales rising to only a 430,000-unit pace last month.

While the new home sales segment accounts for only 9.1 percent of the housing market, the increase last month should allay fears of renewed housing weakness after a surprise decline in home resales last month.

Existing home sales fell in August for the first-time in four months as investors, who have been supporting the market, stepped away. Some economists, however, think the departure of investors, who have been bidding up prices, is a positive development for housing.

A survey last week showed homebuilder sentiment hit its highest level in nearly nine years in September, with builders reporting a sharp pick-up in buyer traffic.

But housing continues to be hobbled by relatively high unemployment and sluggish wage growth.
In a separate report, the Mortgage Bankers Association said mortgage applications fell last week. The decline, however, followed a jump in the week ending Sept. 12.

U.S. financial markets were little moved by the data, but housing shares tumbled after home builder KB Home reported earnings that missed Wall Street's expectations.

KB HOME shares fell 6.89 percent, while Pulte Group slipped 1.74 percent. Toll Brother dropped 1.27 percent.

In August, new home sales soared 50 percent in the West to their highest level since January 2008.
Sales in the populous South increased 7.8 percent to a 10-month high. In the Northeast, sales rose 29.2 percent, but were flat in the Midwest.

Despite the rise in sales, the stock of new houses on the market hit its highest level in four years, giving buyers more choice. At August's sales pace it would take 4.8 months to clear the supply of houses on the market. That compared to 5.6 months in July.

Six months' supply is normally considered a healthy balance between supply and demand. The median new house price increased 8.0 percent in the 12 months to August.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
(c) Copyright Thomson Reuters 2014. Click For Restrictions - http://about.reuters.com/fulllegal.asp

Source: http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140924&id=17958898

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A record number of younger Americans have been living with their parents, which has greatly reduced household formations in recent years. But as the economy improves, more are finally venturing out on their own. Growth has been greatest in the rental market. This generation has spent more per person than any other time opting for affordable rents rather than high home price purchases to start off with.  Renting is the first step to leaving the nest. Los Angeles leds the pack as one of the most desirable places for Millennials to live. 

Millennials start leaving Mom and Dad's nest

Diana Olick - Tuesday, 16 Sep 2014 | 12:59 PM ET

 

As the U.S. economy improves and adds jobs, younger Americans—millennials—are slowly starting to move out from their parents' basements, where a record number of them have been living for the past few years. They're not buying homes as much as they are renting them, but how much and where is crucial to know in order to understand where the housing recovery is headed.

 

Over the past year, all the growth in net household formations has been among renters, according to the U.S. Census. For those 35 years old and younger, their home ownership rate has fallen from 44 percent to 36 percent over the past decade, which is why construction of multi-family apartments is at the highest level in a quarter-century this year.

 

But back to that migration from the basement. How big is it? Millennials will spend $1.6 trillion on home purchases and $600 billion on rent over the next five years, more per person than any other generation with more of them opting for more affordable rents versus paying the big price tags to buy homes, according to a new report from The Demand Institute, a non-profit think tank operated by The Conference Board and Nielsen. Millennials will form just over eight million new households, albeit most of them rental households.  

 

One important difference between millennials and young adults in previous decades is the unique financial challenges of home ownership today, resulting from graduating into a weak job market with growing student loan debt," said Jeremy Burbank, a vice president at The Demand Institute and Nielsen. "Many millennials are open to alternative approaches to housing finance, including single-family rentals and rent/own hybrid contracts such as lease-to-own."

 

And where will millennials move? The locales are now trickling in. When it comes to big cities, who better to ask than the moving companies? United Van Lines tallied up the results of the busy summer moving season and found that Chicago, Washington, D.C., Atlanta, Boston and Los Angeles led the pack of the most popular moving destinations. Washington also ranked as the No. 1 city that people are leaving, but such is the transient nature of the top political town.

While those are the major metropolitan markets, some millennials are looking for mid-size cities with great quality of life. Where should they go?

Top 5 livable cities, where millennials might consider moving

Rank	City	Population	Median household income	Median home price
1	Madison, Wis.	234,586	$53,958	$217,500
2	Rochester, Minn.	106,903	$63,490	$165,300
3	Arlington, Va.	209,077	$102,459	$577,300
4	Boulder, Colo.	99,177	$56,206	$489,500
5	Palo Alto, Calif.	64,514	$122,482	$1,000,000

Source: Livability 

 

Madison, Wisconsin; Rochester, Minnesota; Arlington, Virginia; Boulder, Colorado, and Palo Alto, California, are the top five most "livable" small to mid-size cities, according to a new report from Livability.com. Researchers there looked at 2,000 cities and their amenities, demographics, economy, education, health care, housing and transportation.

Millennials will drive the future of the housing market, and while they may have just started to move out of Mom and Dad's house now, investors should know where they're headed.
—By CNBC's Diana Olick.

Where people moved to this summer

Rank	City
1	Chicago, ll.
2	Washington, D.C.
3	Atlanta, Ga.
4	Boston, Mass.
5	Los Angeles, Calif.

Source: United Van Lines

 

The report found the millennials do aspire to home ownership, just as previous generations did, and they will be important drivers of the housing market. The difference between them and other generations, however, is that their time horizon for home ownership will be shorter, and their aspirations have been altered somewhat simply by the fact that they came of age in the Great Recession.

Where people moved from this summer

Rank	City
1	Washington, D.C.
2	Dallas, Texas
3	Atlanta, Ga.
4	Houston, Texas
5	Phoenix,	Ariz.																																						Source:	http://www.cnbc.com/id/102004872