From WSJ.com
The Education of the Luxury Buyer
Veteran high-end homeowners approach the real-estate market differently than first-timers; learning to take the long view
By SANETTE TANAKA
Seasoned home buyers—people who described themselves as owning a "high-end luxury home"—approach the purchasing process much differently than those venturing into the high-end market for the first time, according to an online survey conducted by Realtor.com in March. These experienced high-end buyers focus less on extra space and glitzy home features and more are willing to pay over their budget to get a sound investment.
Generally, seasoned luxury buyers look at the long-term prospects for a property, says Christian Benites, associate real-estate broker with Town Residential in New York.
Still, seasoned buyers and first-time buyers agree on some things. They both cited views and chef kitchens as the most important luxury-home features, according to the survey. Seasoned folks saw luxury pools as third most important, whereas other buyers cited outdoor living areas.
First-time buyers ranked square footage and extra bedrooms, as well as smart home and eco-friendly features, higher than did current luxury homeowners. Of those currently planning to purchase a luxury home, 20% of seasoned buyers marked privacy as a top feature, compared with 13% of first-time buyers.
"They are not looking for golf simulators and children's playrooms and those kinds of amenities—they are looking for what the building has to offer and the reputation of the developer," Emily Beare, a real-estate agent with Core in New York City, says of seasoned luxury condo buyers. These buyers are more concerned with features like windows and humidification systems that protect high-end furniture and art.
Well-known architects and developers with a reputation for building good quality buildings are appealing for these buyers, says Leslie Wilson, senior vice president of sales at Related Cos.
First-time buyers tend to prioritize finishes and layouts because they want to move in right away without having to gut the property or conduct a lengthy remodel, says Ms. Beare. "It's a totally different mentality from a seasoned buyer. The seasoned buyer is more interested in purchasing a trophy property in the right building at the right address," she says.
Of those planning to purchase a luxury home, 40% of current high-end homeowners said they would be willing to pay over budget, compared with only 29% of nonluxury homeowners, according to the Realtor.com data.
There’s more, read all about it - The Education of the Luxury Buyer
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And this is big, and also from WSJ.com
Mortgage Lenders Ease Rules for Home Buyers in Hunt for Business
Banks Ease Standards Enacted After the Housing Boom Turned to Bust in Sign of Rising Confidence
By NICK TIMIRAOS and ANNAMARIA ANDRIOTIS
The credit freeze is starting to thaw.
Mortgage lenders are beginning to ease the restrictive lending standards enacted after the housing boom turned to bust, a sign of their rising confidence in the housing market.
While standards remain tight by historical measures, lenders have started to accept lower credit scores and to reduce down-payment requirements.
One such lender is TD Bank, Toronto-Dominion Bank's TD.T +0.25% U.S. unit, which on Friday began accepting down payments as low as 3% through an initiative called "Right Step," geared toward first-time buyers and low- and moderate-income buyers. TD initially launched the program last year with a 5% down payment. It keeps the product on its books and doesn't charge for insurance. Borrowers also don't need to put down any of their own cash if a family, state or nonprofit group provides a down-payment gift.
The changes also are a recognition by lenders that the business of refinancing old mortgages, which had been a huge profit center for banks, is nearly tapped out. To generate future profits, banks will have to compete for borrowers who may not have perfect credit or large down payments.
With refinances down sharply, "everybody is fighting for a smaller portion of the originations pie," said Mike Copley, executive vice president of lending at TD Bank. He said the bank believes the loans will perform well.
Mortgage originations, which reached $1.8 trillion last year and $2 trillion in 2012, are forecast to hit $1.1 trillion this year by the Mortgage Bankers Association. The expected 36% decline this year is due to less refinancing. "With volume dropping as much as it has, many lenders are looking to expand their credit box," said Michael Fratantoni, the MBA's chief economist.
The credit thaw has been led by community banks, credit unions and other lenders that largely shied away from the U.S. subprime market during the past decade.
Valley National Bank, a community bank based in Wayne, N.J., lowered down-payment requirements to 5% from 25% this month on mortgages for certain buyers in New York, New Jersey and Pennsylvania. Next month, Arlington Community Federal Credit Union, based in Arlington, Va., will begin accepting 3% down payments on mortgages up to $417,000, down from 5%.
Low-down-payment mortgages never went away after the housing bust. Instead, they shifted from private lenders to the Federal Housing Administration, which insures loans with down payments of just 3.5%.
Over the past year, however, more than one in six loans made outside of the FHA included down payments of less than 10%, the highest share since 2008, according to figures from data firm Black Knight Financial Services. That still is lower than the nearly 44% of the market they accounted for at the peak of the housing bubble in early 2007.
There’s more - Mortgage Lenders Ease Rules for Home Buyers in Hunt for Business
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