Monday, August 13, 2012

4 Strong Reasons to Buy a Home Now

4 Strong Reasons to Buy a Home Now

“It’s hard to argue against buying a house now, assuming you can get a loan,” writes John Waggoner, a columnist with USA Today. Sure, Waggoner says that getting a credit check for approval of a mortgage can be a “only slightly less intrusive than a CIA background check,” but for those who are able to qualify, a lot of analysts say that now can be a good time to purchase a home.

1. The price is right. The median single-family home price hit its lowest in more than a decade when it reached $154,600 in January, according to the National Association of REALTORS®. That was the lowest since October 2001. During the height of the housing market in July 2006, the median home price for a single-family home was $230,900.

2. It’s cheaper to buy than rent. In nearly every major metro market, it is cheaper to buy a home than rent. Rents have been on the rise the last few years and are predicted to continue to rise. Meanwhile, home affordability is at record highs, which means that buying a home is more within reach to the median income family.

3. Inventories of for-sale homes are shrinking. Ned Davis Research estimates that excess inventories of homes to be eliminated by the end of next year. “When excess supply dries up, people start building more new houses, which has the virtuous effect of reducing the unemployment rate and increasing the economy generally,” according to the USA Today article.

4. Mortgage rates are at record lows. Mortgage rates have hovered near record lows for weeks, which has helped pushing housing affordability higher. For example, the average 30-year fixed-rate mortgage, which is the most popular among home buyers, is 3.59 percent, according to Freddie Mac—just above its record low set on July 26 of 3.49 percent average. “It’s conceivable that at some point in the next 30 years, your interest rate would be less than the rate of inflation,” writes Waggoner for USA Today.

Tuesday, July 17, 2012

The Housing Market Has Turned-At Last!

The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. "We finally saw some rising home prices," S&P's David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.
The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing, according to David Wessel on The News Hub. (Photo: Bloomberg News)
Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months' worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006.
The reduced inventory of unsold homes is key, says Mark Fleming, chief economist at CoreLogic, a housing data-analysis firm. For the past couple of years, house prices have risen in the spring and then slumped; the declining supply of houses for sale is reason to believe that won't happen again this year, he says.
Builders began work on 26% more single-family homes in May 2012 than the depressed levels of May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth. In the first quarter, it accounted for 0.4 percentage points of the meager 1.9% growth rate.
"Even with the overall economy slowing," Wells Fargo Securities economists said, cautiously, in a note to clients, "the budding recovery in the housing market appears to be gradually gaining momentum."
Economists aren't always right, but on this at least they agree: A new Wall Street Journal survey of forecasters found 44 believe the housing market has reached its bottom; only three don't. (The full results of the Journal's July survey will be released at 2pm ET)
Housing is still far from healthy despite the Federal Reserve's efforts to resuscitate it by helping to push mortgage rates to extraordinary lows: 3.62% for a 30-year loan, according to Freddie Mac's latest survey. Single-family housing starts, though up, remain 60% below the 2002 pre-bubble pace. Americans' equity in homes is $2 trillion, or 25%, less than it was in 2002 and half what it was at the peak. More than one in every four mortgage borrowers still has a loan bigger than the value of the house, though rising home prices are reducing that fraction slowly.
Still, the upturn in housing is a milestone, a particularly welcome one amid a distressing dearth of jobs. For some time, housing has been one of the biggest causes of economic weakness. It has now—barely—moved to the plus side. "A little tail wind is a lot better than a headwind," says economist Chip Case, the "Case" in Case-Shiller.
From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses. "Manufacturing had led growth and construction had lagged," JPMorgan Chase economists said last week."Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life."
Plenty could go wrong. The biggest threat is a large shadow inventory of unsold homes, homes which owners won't put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices. Or the still-dysfunctional mortgage market could get worse. Or overly zealous regulators or a post-election change in government policy could unsettle mortgage lenders or home buyers.
But the housing bust is over.

Wall Street Journal- 7/11/12

Wednesday, February 15, 2012

Why you should use a FULL SERVICE REALTOR!

For most people, real estate transactions are one of the biggest financial investments made in their lifetime. Considering the small cost and the large risk, it would be foolish to consider a deal in real estate without the professional assistance of a full service real estate agent, or Realtor®.

But if you're still not convinced of the value of a Realtor®, here are several more
reasons to use one:

  • Without a Realtor©, when you’re not home:
    1. Your property can’t be shown and
    2. People can’t get information
  • With a full-service Realtor©, your property can be shown whenever a buyer is available and when it is okay with you to show your home.
  • Without a Realtor© there is no real way to qualify buyers before allowing them to come through your house. Full-service Realtors© will pre-qualify buyers before they show them homes.
  • Without a Realtor© you may seem eager or even desperate when following up with prospects. A full-service Realtor© can follow up on every showing.
  • Without a Realtor© buyers aren’t likely to give you honest feedback because they don’t want to be rude. With a full-service Realtor© most of our feedback will come from agents who will tell us what their buyers thought and how your house compares to all the other homes they’ve shown to their buyers.
  • Without a Realtor, lack of experience and expertise in writing and negotiating a legally binding residential contract may mean the prospective buyer can get out with no consequences. Realtors© write many contracts each month. Agents work closely with brokers and often attorneys, as well.
  • Without a Realtor© you may be exposed to legal liability (have you adequately disclosed everything? Could someone accuse you of discrimination under EEO guidelines? Lawsuits are not always brought for legitimate causes. A full-service Realtor© has experience and the availability of corporate counsel to help you sleep easier.
  • Without a Realtor©, your family’s safety and security of your home and possessions could be at risk. With a full-service Realtor©, no buyer will ever be in your home without an agent. Our lockbox registers the time, date, and agent’s name and company when they access your home. Lockboxes can be on timed access so there can be no late entry at night.
  • Without a Realtor© relocating buyers, perhaps the best buyers, would rarely see your home. With a full-service Realtor© your home is listed in the Multiple Listing Service (MLS) database and other Realtors©, including those working with motivated buyers from out-of-town, will have access to information about your property.

Monday, January 30, 2012

Buy a House or Bury Your Money??

If you’re given a choice to either invest $1,000 in a two-year bank certificate of deposit or bury that money in your backyard, don’t spend too much time thinking about it, because for all practical purposes you’ll come out the same either way.

Researchers at the University of Alabama at Birmingham (UAB) say you’ll earn 83 cents more with the CD than burying your money, so the CD’s probably the better deal. But after you factor in the gas to get to the bank to buy your CD you’re probably better off going with the buried money and just taking advantage of inflation.

So, where should you put your money? Andreas Rauterkus, an assistant professor of finance at the UAB School of Business, says you should buy a house.

“First-time home-buyer rates are around 3.8 percent for a 30-year mortgage, so if you can afford a $1,000 mortgage payment monthly for 30 years then you can buy a $250,000 home right now,” says Rauterkus.
Lary Cowart, an assistant professor of real estate and finance at the school, says you don’t want to wait too long, though. Because once prices start moving, it won’t take long before price changes affect the advantage of today’s low rates.

“Holding out to try and find the lowest price is not a good strategy because if the house were to go down 10 percent but the interest rate goes up 1 percent you are not gaining anything,” says Cowart. “If rates go up 1 percent, say from 4 to 5 percent, that is a 25 percent increase in the interest rate; so the mortgage payment goes up by more than 10 percent and the amount of house that can be purchased goes down by more than 10 percent. People fail to realize that and it is another little thing that will cost them big over the 30-year life of the loan.”

Of course, whether you can buy at all depends on lenders’ willingness to make a loan today to anyone except those with the best credit profile and plenty of money for a downpayment, and that’s a big question today. It makes you wonder if the reason banks aren’t lending is because they don’t have any money available because it’s all buried in the bankers’ yards.

1/30/2012 By Robert Freedman

Friday, January 20, 2012

Relief for Homeowners Behind on Mortgages!

If you or someone you know has lost a job and are in danger of falling behind on mortgage payments, here's some potentially important news for you: The two largest players in home mortgages, Fannie Mae and Freddie Mac, are revising their policies on forbearance when unemployment interferes with your ability to stay current on your loan.

Forbearance means that a lender or mortgage servicing company will either suspend — cut to zero — or reduce required monthly payments for a specific period of time. On loans they own or have securitized, Fannie and Freddie are now directing servicers to forbear when a borrower can show the loss of a job.
Unlike the companies' earlier rules, servicers can grant a half year of reduced or suspended payments without getting special permission in advance. If unemployment continues beyond six months, and if the servicer believes additional forbearance for up to another six months would be appropriate, it can ask Fannie or Freddie for approval to do so. During any unemployment forbearance period under the rule revision, borrowers will not be subject to foreclosure, even if they had fallen behind on payments before the forbearance began.

Fannie Mae's policy becomes mandatory for all loan servicers on March 1. Freddie Mac's policy takes effect Feb. 1. Though no estimates were available on how many borrowers could be assisted under the new guidelines, the numbers nationwide are likely to be substantial at a time when the unemployment rate is at 8.5 percent.

Forbearance, it should be noted, does not mean a forgiveness or reduction of the principal balance on the mortgage. Think of it instead as a timeout. Whatever amounts go uncollected during the forbearance period must eventually be repaid. Say, for instance, that you owe $2,000 a month on your loan. Suddenly you lose your job and that payment becomes impossible. An unemployment forbearance agreement might allow you to pay nothing on the mortgage while you search for a new job. Or, if your spouse still has a job and you can afford it, your monthly payment might be cut to $1,000.

If your job search ultimately took four months, you'd owe $4,000 on the partial reduction plan or $8,000 on the suspension plan at the end of the forbearance period. You'd be expected to resume your regular $2,000 payments and work out an arrangement with your servicer to repay the deferred amounts in affordable increments. If this happened to be $500 extra a month, your repayment would take eight months on the reduction plan, 16 months on the suspension.

Not everybody owning a home with a Fannie or Freddie mortgage will be eligible for the expanded job-loss relief. To begin with, the house will need to be a principal residence, not a second home or investment property. Fannie's guidance to servicers specifically rules out assistance when the home was financed with an FHA, VA or Rural Housing mortgage. Most important, there must be a documented "financial hardship" caused by the employment loss and there must be a reasonable chance that without forbearance, the borrowers could sink into default and eventually lose the house.
In cases where borrowers are being considered for an extension of an existing forbearance plan, borrowers will also have to document that they don't have cash reserves -- bank accounts, other liquid assets -- that exceed 12 months worth of their monthly housing expenses. In other words, if you've got money socked away that you could use to pay the mortgage, don't expect another forbearance. Also under Fannie's rules, borrowers' monthly housing expenses must be more than 31 percent of their monthly income, excluding unemployment benefits. Put another way: Only borrowers whose mortgage bills are consuming an inordinate amount of their total household budget need apply.
Tracy Mooney, Freddie Mac's senior vice president for single family servicing, said the purpose of the expanded forbearance is to "provide families facing prolonged periods of unemployment with a greater measure of security by giving them more time to find new [jobs] and resolve their delinquencies."
How do you get a pause on your mortgage payments? The first step is to communicate with your servicer as soon as you learn of your job loss. Don't wait until you fall behind on a payment. Ask the servicer whether Fannie or Freddie owns or has guaranteed your mortgage, then walk through the rules and numbers: Are we eligible for a forbearance plan? How much can we afford to pay and how much will be deferred? What alternatives may be available such as a loan modification?
Check it out. It just might help save your house.

The Hartford Courant
January 21, 2012

Thursday, December 15, 2011

The Holidays is a GREAT time to SELL your home!

While many people are taking their home off the market, because they believe that there are no home buyers out there, they are just making the odds of selling your home better.
Your home will never look better, or smell better.  With all the Christmas trimmings your home will invoke pleasant memories of happy times for potential buyers.
You may think that having your home on the market will interrupt your festivities.  But if you really think about it you are probably only entertaining one or two days during that time.  It would be better to decline and reschedule showings rather than to take the home off of the market for a month or more.
People looking during this season are serious.  Most people are very busy during this time and will not waste time looking at home unless they need to move.  So while you may have fewer showings they will likely be more serious buyers.
Many corporate relocations are starting new jobs in January as the new budget year begins.  These buyers will be looking in November and December, and there will be fewer homes to choose from, making the odds of selling your home better.
 If you are serious about selling you keep your home on the market until it sells.  You never know when the right buyer for your home will come along. 
My husband and I found our current home during the week between Christmas & New Years.  He had a little time off- as do many buyers during that time.  The holidays always reminded me that I wanted a larger home to entertain in- we ended up getting exactly what we wanted.  Had the home not been on the market, it may not have pushed us to act quickly.
Staging Your Home During The Holidays.
Selling your home over the holidays is a balancing act.  You want to enjoy the holidays with all of the trimmings; however you need to be careful not to clutter the house up so that buyers can see the features of the home.
We would suggest that you focus on no more than three areas of the home to decorate for Christmas.  The Front Door. 
A fresh wreath or some greenery will make a welcoming backdrop to the whiteness of winter.  A garland along the rail or over the door can be very attractive.  Stores now have smaller outdoor trees that they sell in pairs to place on either side of the front door. 
The Fireplace. 
If you are lucky enough to have a fireplace, this is a great place to add some greenery.   If not add a table cloth to the dining table and some seasonal trim that will accent the colours of your home. 
The Christmas Tree.
If your family has a Christmas tree make sure that it does not clutter up the room, you may need to make room by removing a chair or other item of furniture.  Make sure that it does not block any doorways.  Try to use a theme of no more than three colours for your decorating, such as red, gold and green or blue, silver and white.   If you wrap your gifts in these colors as well it will really add to the theme of the home.
If you do not have a tree, a poinsettia will add a splash of colour and warmth to any room and is also non-denominational. 
If you have time to bake your home will smell great for showings, if you are like most people and don’t throw some vanilla in a pot of water and let it simmer before a showing.  You can also touch the light bulbs with vanilla for a welcoming scent as buyers come in the front door.  Please avoid artificial scents as they just make people wonder what you are trying to hide. 
Remember to leave the lights on, especially at the front door.  With it being dark early you don’t want a buyer tripping as they come up the front steps. 
If you can wait until at least December 1st (the 15th would be better) before putting up the tree, and make sure that you have it down by January 6th, you can have your traditional Christmas and have your home on the market,  just in case that RIGHT buyer shows up.

Sunday, December 4, 2011

Do's & Don'ts of Outdoor Holiday Lighting

Driving through neighborhoods, admiring the bedazzled roof lines and ridges, it's easy to spot the eyesore that ruins it for the entire block.
It's the house with 10,000 blinking, multicolored lights set to Yuletide carols with a giant inflatable Rudolph in the front yard.
There will always be the "bigger is better" crowd when it comes to holiday decorating. They want wattage. Lots of eyeball assaulting, bright lights. But resist the urge to make it a National Lampoon's Christmas.
"I've always been a firm believer that less is more," said Bill Hughes, the manager for the lighting department at Amini's Home, Rugs and Game Room in Chesterfield. "Tasteful never goes out of style."
We consulted with some of the area's outdoor lighting experts for their tips on how to get the most bang for the least amount of money and effort.
More consumers are switching to LED lights for decorating outdoors, according to several local installers.
The upfront price is about twice as much as conventional incandescent lights. But the energy-efficient LED lights use less power and require far fewer repair and service calls, installers say. Over time, they can be a better investment.
Plus, the technology has improved, so the LED color, which used to cast a bluish hue, is truer to white.
"Within the last year, the color temperature and color rendering of the LEDs has improved," said Mark Sullivan, owner of Sully's Landscape Lighting and Design in Kirkwood. "People don't like that cool blue look."
For DIYers, he suggests choosing LED lights marked "warm light" rather than "cool light." The color rendering index should be above 80, he said.
Michael Rottler, president of Rottler Pest and Lawn Solutions, says he won't mix LEDs with incandescent lights because his wife can spot the difference.
"My wife notices little details," he said.
Sullivan says the advantage of wrapping tree branches in conventional lights is that they can be cut and thrown away at the end of the season, with much lower labor costs for those hiring professional installers.
But the trick is to put some time into planning and thinking about the design before bringing out the ladder and boxes of decorations. They don't have to be hung the same way every single year.
Here are the experts dos and don'ts of outdoor lighting to make sure your display spreads holiday cheer not eye strain headaches.

• Use more light if your house sits farther back from the street to enhance its curb appeal.
• Leave at least a foot between the edge of the driveway and staked lights when lining your driveway. If a driver backs out too close to the edge, he shouldn't take out a row of lights.
• Create a flow of light that moves the eye from one area to the next. Avoid "hot spots" of lights bunched in one area.
• Illuminate more than just the facade of your home to create depth.
• Use special lighting effects sparingly, such as a red or green gel pack that can filter the color of a white light.
• Incorporate seasonal lighting with your outdoor landscape lighting. Consider how the pre-existing lights can be used to enhance or complement the holiday lighting.
• Carry the design style from within your house to the outside.
• Add pre-lighted wreathes and garlands to doors and columns. Pre-lighted candles in windows are a classic look.
• Highlight architectural features such as roof lines, chimneys, peaks, windows and ridges.
• Get your spouse's input before installing. There's no quicker way to lose the holiday spirit than getting back on a ladder to redo the lights.

• Don't mix LED and conventional lighting, especially on the same structure. If you choose to do your house in LEDs, and wrap the trees or drape bushes with conventional lights, the difference in hue may not be as jarring.
• Don't stick with all green or red lights, which can look commercial rather than homey.
• Don't try to make hanging icicles work on a modern home. They look best on a bungalow-style house.
• Don't use as many lights if decorating with LEDs as opposed to traditional halogen lights. The lights are brighter, requiring fewer in number.
• Don't light everything.

Courtesy of STLToday, Aisha Sultan.