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Top 10 states with the fewest underwater loans

by Michael Marsden

When reading money dot-coms recent article about how many mortgages are underwater in United States, I find that Connecticut has fared quite well. While there are 7.5 million homeowners underwater with their mortgages in the United States, Connecticut is lucky to find in itself in the top 10 states with the fewest underwater loans list. It turns out that there are 45 other states that have a much worse problem than we have here.


I'm finding an increase in buying activity in spite of all the negative news recently. This is no doubt because of the lower prices of homes today combined with the fabulous mortgage rates that are also available. In fact, I don't think you'll find home prices to be any lower in your lifetime relative to income.


If you have good credit, a steady job, and the money to put down, you'll not find a better time to buy a home.


Click here to read the entire money.com article.

Mortgage Buydowns

by Michael Marsden

NAR Pushes for Mortgage Interest Buy-Down 
A federal mortgage interest buy-down program would help spark the housing market, the NATIONAL ASSOCIATION OF REALTORS® said in a letter sent today to James B. Lockhart, chairman of the Oversight Board of the Federal Housing Finance Agency. 

NAR seeks a 4.5 percent mortgage interest rate buy-down program financed through the U.S. Treasury Department’s Troubled Asset Relief Program. 

In the letter to FHFA, NAR shared three potential implementation procedures for a federal buy-down plan: 

  1. TARP would fund the payment of points at the individual level.
  2. The Federal Home Loan Banks would raise funds by selling below-market-rate loans to the Treasury Department for them to make the 4.5 percent interest rates available to lenders.
  3. Fannie Mae and Freddie Mac would purchase mortgages at the 4.5 percent interest rate but pay lenders the market rate.

“The buy-down program would complement other initiatives and help stabilize, stimulate and revitalize the housing market,” says NAR President Charles McMillan. “We must address the foreclosure crisis and increase housing demand. Lower interest rates and foreclosure mitigation are two sides of the same coin. Together they represent the key ingredients to stabilizing the housing market and preserving communities and homeownership.”

NAR has calculated that a 1 percentage-point decrease in mortgage rates would result in an additional 500,000 home sales.

In addition to suggesting that TARP assets be used to buy-down mortgage interest rates, NAR has recommended other principles that would help create long-term stability by ensuring that safe and affordable mortgages are available throughout the nation.
  • The higher loan limits passed in the economic stimulus bill earlier this year should be made permanent.
  • The federal government should ensure sufficient capital to support mortgage lending in every type of market.
  • The temporary $7,500 tax credit for first-time home buyers should be extended to all home buyers and the repayment requirement eliminated.

Pending Home Sales Holding in Stable Range

by National Association of Realtors


Pending home sales eased against a deteriorating economic backdrop but remain in a stable range, according to the National Association of Realtors®.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September, and is 1.0 percent below October 2007 when it was 89.8.

Lawrence Yun, NAR chief economist, said a review of the past year is instructive. “Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” he said. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”

Conditions remain uneven around the country, but some areas that are showing healthy gains in pending home sales from a year ago include many Florida and California markets, Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas. ²

The PHSI in the South jumped 7.8 percent to 95.9 in October but remains 2.9 percent below a year ago. In the Northeast the index rose 0.6 percent to 68.1 but is 14.1 percent below October 2007. The index in the Midwest declined 4.3 percent to 79.7 in October and is 6.8 percent below a year ago. In the West, the index fell 8.7 percent to 103.7 but is 17.4 percent higher than October 2007.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he’s hopeful about considerations by the U.S. Treasury. “Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy,” McMillan said. “We’re very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure.”

Yun expects growth in the U.S. gross domestic product (GDP) to contract through the first half of 2009, then stabilize and expand in latter part of the year – lifted by a home sales recovery. “Given the critical role of housing in an economic recovery, we’re confident sufficient stimulus will be offered to bring more buyers to the market,” he said.

Looking at middle-ground assumptions, existing-home sales are forecast to total 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010.

New-home sales for 2008 should total 486,000 this year, decline to 393,000 in 2009 and then grow to 446,000 in 2010. Housing starts, including multifamily units, are projected at 934,000 units in 2008 and 731,000 next year before rising to 772,000 in 2010.

“Price projections are challenging in an environment with so many variables and divergent local conditions,” Yun said. “The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration.”

The 30-year fixed-rate mortgage will probably decline to 5.6 percent in the first quarter, rise slowly to 6.0 percent by the end of 2009, and average 6.2 percent in 2010. NAR’s housing affordability index is likely to remain quite favorable, averaging 138 in 2009.

The unemployment rate is estimated at 7.2 percent in the first quarter, rising to 8.3 percent by the end of 2009. Inflation, as measured by the Consumer Price Index, is seen at 0.7 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.5 percent in 2009.

# # #

¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

²Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.

Existing-home sales for November will be released December 23; the next Pending Home Sales Index will be on January 6.  For more information, visit: Pending Home Sales



List now or wait until Spring

by Michael Marsden

Each winter I get the question from many a potential (and sometimes unsuccessful present sellers) as to whether they should wait until Spring to put their homes on the market. Certainly a seller's near term and personal goals will influence their decision the most, my pat answer to this question is that there are buyers in the market 12 months each year. You may miss your buyer thinking Spring is the best timing.

There is no doubt many people feel that Spring is the best market to sell their property results in lower inventories during the winter months. That said, doesn't it make sense to try and sell in a time when there's fewer choices? 

Winter buyer's are serious buyers. Who else braves the elements and cold, interrupt their holiday time off looking at homes? They're the ones who are the most serious and motivated. 

Has anyone checked the mortgage rates lately? The lower the mortgage rates, the lower the buyer's payment which means that more buyers will qualify for your price point and maybe you end up with a closer to asking price contract.

The bottom line is that if your home is not on the market, there's little to no chance that it will sell. So if you want to sell sooner than later, then list your home now and take advantage of lower inventories and the great mortgage rates. When you wait until Spring, those buyers will be just starting the process of shopping for a home. Those who brave the dark, cold winter months, will be working with those well into the process and who knows...you may be our next contract for a January closing. What better Christmas present could one want. 

Wall Street Journal Article Says Professional Photos Make a Difference

by Michael Marsden

Some say we're lucky to have all the listings we have now and have had in 2008. The River to Shore Group at Page Taft has enjoyed at one time this year having over 50% of the office listings. At one time this year we had over 30 listings, but as of this post, we've got about 18. We've actually sold more than we've replaced with new listings. 

But attracting listings and have success selling them is not luck really, it's our marketing online and in print. When I speak of print, I am not talking about the dinosaur known as the newspaper, but beautiful marketing pieces for buyers to take away with them after the showing. This is the first year where we've had people come to us to list their homes directly from the internet, and we've been told we've won a listing because of the quality of our work, group approach, as well as the fabulous websites we produce for every listing regardless of price point. 

Most REALTORs® have had a long professional career doing something else before coming to the business and i am no different. I am fortunate that my background seamlessly integrates with my present career, which I happen to love doing. In fact, I can't imagine getting up in the morning and doing anything else. Anyway, as former art director and graphic designer coupled with my over 30 years experience as a photographer I bring a unique set of in-house skills to the table. I also have years of experience as an IT consultant so I have a solid command of the technical side of things which is today's delivery platform for all the tasty work we do. 

When I read this article in the WSJ, it certainly resonated with the River to Shore Group at Page Taft GMAC Real Estate. It's been my personal hallmark for the past 4 years. Taking great photos and designing great marketing online in the way of fully featured websites and for tasty take-away marketing brochures to separate our homes from the many in buyer tours have certainly made a difference for our sellers. 

CLICK HERE TO READ THE WSJ ARTICLE: "MAKE EVERY PIXEL COUNT"


Real Estate Downturn

by Michael Marsden

A colleague sent this YouTube link to me. It's a video parody on the current investment and real estate markets. I am a big believer in how comedy and a good laugh can heal. So maybe it will bring a smile to your face. 

 




Displaying blog entries 1-6 of 6

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