Understanding Today's Renters: Insights from Zillow's 2023 Survey

The rental market continues to evolve and staying informed is crucial for real estate investors, especially as the new year approaches. Zillow's 2023 Consumer Housing Trends Report offers valuable insights into the current state of the rental market on a national scale. Here's what you need to know. An Update on Renter Demographics  The typical U.S. renter is changing. While renters have traditionally been younger, the average age is now 39, which is older than the average first-time homebuyer, who is 35 years old, according to the National Association of Realtors. This shift is in line with the challenges of homeownership affordability (mostly due to rising interest rates) and limited housing inventory. Regional differences are significant. For instance, renters comprise 39% of household decision-makers in the Northeast, compared to 24% in the Midwest. This variation is largely due to differences in income levels and housing costs across regions. Financial Realities Renters' income levels are an important factor. Nearly half of renter households earn under $50,000 annually, highlighting a strong link between income and renting. This is further influenced by regional economic disparities.  Current Rental Costs The median rent for a one-bedroom apartment in the U.S. is approximately $1,253 per month, but this varies widely by region. Coastal areas tend to be more expensive, while the South offers more affordability, except for the Sun Belt cities that were part of the pandemic-era migration where rent remains high. Renters' Satisfaction and Preferences A significant portion of renters (67%) feel their homes need updates, with 18% saying a major renovation was necessary. This dissatisfaction is often due to the age and condition of available rental properties. Most rentals in the U.S. are apartments in small buildings, single-family homes, or condos, which tend to be older properties that need more repairs. However, renters living in large multifamily buildings feel their homes are in the best condition. For example, 45% of these renters said their apartment was “like new,” while only 27% rated their single-family home the same way. Despite the preference for updated homes, most renters still gravitate towards apartments in smaller buildings. Of the renters who preferred a rental property in an apartment building, 42% wanted a building with fewer than 10 units and 36% would like a medium-sized building of 10 to 49 units. This preference is a key consideration for investors when deciding on what type of investment property to purchase.  Moving Plans and Homeownership Aspirations A large majority of renters (72%) plan to move within the next three years, often with the goal of homeownership. This trend is particularly strong among millennials, who currently face the challenge of affordability. Use of Digital Tools in the Rental Market Despite the increasing use of digital tools in the rental sector, they have not replaced in-person tours. 74% of renters do one to four in-person tours, and only 8% do more than that. However, the willingness to sign a lease without seeing a home in person has decreased from 21% in 2018 to 19% now. A majority still sign their leases on paper, although the same percentage prefers to do it online. Digital lease signing demand is growing slowly and is not yet essential. In contrast, digital rent payments are on the rise, with 60% of renters paying online, and 69% preferring to do so, likely due to the inconvenience of checks or cash payments. Post-Pandemic Preferences The pandemic has left a lasting impact on renter preferences. There's still an increased desire for walkable neighborhoods (61%), community feel (42%), and access to leisure activities (56%). These shifts align with broader post-pandemic migration patterns, which have seen a move away from the largest cities towards smaller but vibrant metro areas. Renters today are seeking more than just a place to live; they desire a fun and friendly community to call home. This evolving preference landscape should be considered by real estate investors when selecting the location of their next investment property.  Key Takeaways for Investors In the Zillow report, a significant insight for real estate investors is that despite financial challenges, renters are aware of their options. They prefer renting well-maintained homes in desirable neighborhoods with a strong sense of community. Affordability remains a primary concern. Investors who can meet these preferences – offering affordability for the area, well-maintained properties, and locations in good neighborhoods – will benefit from lower tenant turnover, higher rental income, and reduced vacancy rates. Additionally, it's crucial for investors to understand the specific dynamics of their regional market. With one in three U.S. adults being renters, this segment is expected to grow. To make informed investment decisions, investors should identify their typical renters' characteristics. This includes determining their age, housing preferences (i.e., detached homes or apartments), and income ranges. By gaining insight into these key factors, investors can make more strategic and profitable investment choices. If you are interested in learning about the rental market in St. Augustine, Florida, then give me a call. As a seasoned real estate professional and owner of several rental properties in the area, I can provide the expert localized advice you’re looking for. Your success in real estate is my priority.

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St. Augustine, FL: The Chosen Gem for the 2024 HGTV Dream Home

St. Augustine, Florida – a city steeped in history and adorned with natural beauty – has been selected as the location for the 2024 HGTV Dream Home! This marks a significant milestone for our beloved city, known for its picturesque coastline and rich cultural heritage. St. Augustine is the perfect choice for this renowned project and I’m excited to share some of the incredible features of the property that one lucky winner will soon call home.  What is the HGTV Dream Home? The HGTV Dream Home is the American cable network Home & Garden Television’s annual project house and sweepstakes, held since 1997. Each year, HGTV builds an incredible “dream home” to give away in a nation-wide online sweepstakes. The sweepstakes for the 2024 HGTV Dream Home begins on December 22, 2023, at 9:00am ET, and ends on February 15, 2024, at 5:00pm ET. The winner will also receive a 2024 Mercedes Benz E-Class Sedan as part of the prize package!  A Blend of History and Modern Luxury St. Augustine, the Nation's oldest city, is a tapestry of colonial Spanish architecture, pristine beaches, and vibrant communities. HGTV’s decision to choose St. Augustine for its 28th dream home aligns perfectly with the city's reputation for combining historical charm with modern coastal living.  A Dream Location: Pelican Reef The 2024 HGTV Dream Home is located on Anastasia Island in Pelican Reef, which is a gated waterfront neighborhood where residents enjoy a peaceful and serene lifestyle. The community is small and tight-knit, with friendly neighbors who often gather for social events. It is situated on the eastern side of the Intracoastal Waterway, offering residents stunning views of the Matanzas River and easy access to boating, fishing and other water activities via the community dock and marina.The neighborhood is known for its luxurious waterfront properties, with many homes featuring private docks and boat lifts. Pelican Reef is conveniently located near a variety of amenities and attractions. St. Augustine’s beautiful beaches and the historic downtown district are just a short drive away. The neighborhood is also located near several parks and nature preserves, providing ample opportunities for outdoor recreation. The St. Augustine Amphitheater, where incredible artists like John Legend have performed, is just 1 mile away.  The Home of Your Dreams The 2024 HGTV Dream Home reflects St. Augustine's coastal elegance and is packed with high-end design. Features include: Spacious Living: 3,300 sq. ft. with three bedrooms and four bathrooms.   Timeless Elegance: A mix of blue, white, and gray hues combined with natural wood tones and industrial metal accents are used throughout the property to create a soothing coastal feel that will never go out of style. Interior Designer, Brian Patrick Flynn, took “inspiration from beach houses all over the world to give this house a one-of-a-kind, laid back Floridian look.” Flynn “wanted to make the home feel like its own breezy paradise with calming colors and an ample amount of natural light that the winner would dream about coming home to.” Relaxed Waterfront Living: Coastal living is easy and inviting with a private marsh oasis that offers incredible western waterfront views. The large doors that open from the indoor space to the adjacent screened-in covered porch provides seamless transitional living that embraces every season.  Sustainable & Durable Design: The designer emphasized the importance of eco-friendly construction and energy-efficient systems throughout. A mix of stones and a custom-built rock were used on the exterior to withstand the ebb and flow of tides, and seaside storms. Dreamy Outdoor Living Spaces: Set against the marshes and estuaries of the Intracoastal Waterway, the backyard offers unobstructed views of the surrounding natural beauty that makes St. Augustine so special. The expansive outdoor areas were built for entertaining featuring a private pool, full-service outdoor kitchen & bar, covered gathering space, and a screened-in outdoor patio. A built-in bar fireplace adds ambiance and warmth, making it a favorite place to relax and enjoy the sunset even on cool, breezy evenings. Local Artistry: Work from local artisans were incorporated to reflect the city's artistic community. Impact on the Local Real Estate Market The selection of St. Augustine for the HGTV Dream Home is more than just a nod to the city's beauty; it's a testament to the robustness of our local real estate market. This project is likely to spark increased interest in St. Augustine properties, highlighting the area as a desirable location for both primary residences and vacation homes. Community and Economic Benefits The HGTV Dream Home project brings with it a flurry of economic activity. Local contractors, designers, and artisans played a pivotal role in bringing this dream to life, showcasing the talent we have right here in St. Augustine. Additionally, the national exposure from HGTV will shine a spotlight on our local businesses and tourism, providing a welcomed boost to the economy. Embracing the Spotlight As St. Augustine welcomes the HGTV Dream Home, we as residents and professionals in the real estate sector should embrace this opportunity. It's a chance to showcase our community's warmth, diversity, and the unique lifestyle that St. Augustine offers. Conclusion The selection of St. Augustine for the 2024 HGTV Dream Home is a proud moment for our city. It reaffirms what we, as locals, have always known: St. Augustine is not just a place to live; it's a lifestyle that most people dream of. For those interested in learning more about the real estate opportunities in St. Augustine, or for a chance to call this historic coastal city home, feel free to reach out.

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The Return of the Assumable Mortgage

In today's ever-evolving real estate market where interest rates are at record-breaking highs, understanding the various pathways to homeownership is crucial. One such path that’s gaining renewed attention in the current market is the assumable mortgage. Let’s explore what assumable mortgages are, why they’re becoming popular again, and how they can benefit both buyers and sellers. Understanding Assumable Mortgages What exactly is an assumable mortgage? Simply put, it's a type of loan that allows a homebuyer to take over the seller's mortgage under its existing terms, rather than obtaining a new loan. This concept isn't new, but it has evolved significantly over the years. Unlike traditional mortgages, assumable mortgages can offer unique advantages, especially in a market where interest rates are on the rise. However, not all loans are assumable, and there are specific criteria and processes involved. The Benefits of Assumable Mortgages for Buyers For buyers, assumable mortgages can be a golden ticket. Many homes purchased in recent years have mortgages with interest rates significantly lower than the current market rates. This translates into significant savings over the life of the loan. Additionally, the qualification process can be more straightforward and you can often avoid some of the typical closing costs associated with obtaining a new mortgage making home ownership more affordable up front. These benefits make assumable mortgages an attractive option, especially for first-time homebuyers. Sellers’ Advantage: Why Offer an Assumable Mortgage? From a seller's perspective, offering an assumable mortgage can be equally advantageous. In a high-interest-rate environment, your property becomes more attractive as buyers seek to capitalize on your lower rate. This can widen your pool of potential buyers, increase your negotiation power, and possibly even expedite the selling process. It's a win-win for both parties. In addition, some sellers may have mortgages with prepayment penalties. Assumable mortgages can allow sellers to avoid these penalties and sell their homes more freely. Navigating the Process: Steps to Assume a Mortgage Assuming a mortgage isn't as daunting as it sounds. The first step begins with finding a property with an assumable mortgage. Once you've found it, understanding the lender's requirements is key. You'll undergo a similar application process to a traditional mortgage but with a focus on taking over the existing terms. Legal and financial considerations are crucial at this stage, and it's always wise to seek professional advice to ensure you are making the right decision. Potential Pitfalls and How to Avoid Them While assumable mortgages offer many benefits, they're not without their challenges. Legal complexities can arise, particularly around the transfer of the loan. Financial risks, such as assuming a loan that doesn't align with your long-term financial goals, are also a consideration. Doing your due diligence and consulting with real estate professionals are your best defenses against these pitfalls. The Future of Assumable Mortgages in Real Estate Looking ahead, the role of assumable mortgages in the real estate market seems promising. As market conditions evolve and interest rates fluctuate, these types of loans may become more prevalent. Buyers and sellers looking to leverage this option should stay informed about potential regulatory changes and market trends as we move into 2024.

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