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Friday, 29 February 2008
Daily Real Estate News | February 28, 2008
Bernanke Prepared to Cut Key Rates Again
Federal reserve Chair Ben Bernanke told the House Financial Service Committee during an appearance on Wednesday that the Fed is prepared to lower key interest rates again to bolster economic growth.
The Fed "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks," he said.
Bernanke was asked when he thought the housing market might stabilize. It's possible, he said, that by "later this year it will stop being such a big drag directly" on the economy. But home prices probably will decline into next year, he added.
"It is very difficult to know, and we've been wrong before," Bernanke said.
Source: The Associated Press, Jeannine Aversa (02/27/08)
Wednesday, 27 February 2008
The Girdwood Forest Fair Committee would like to present their plan for the 2008 Forest Fair to the local business community.
What: Forest Fair Committee Presentation
Where: Glacier City Hall
When: Monday, March 3 at 7:30pm
Please RSVP to Terri Adkins at Teri.Adkins@bp.com by Friday, Feb 29.
Tuesday, 26 February 2008
There are significant changes being issued by Freddie Mac and, most likely, by Fannie Mae which will significantly impact the way in which ALL lenders must price Conventional loans. These changes will take effect as early as March 31, 2008.
Some changes are:
- For ALL loans with the loan to value of 80% or higher, a LOAN LEVEL PRICE ADJUSTMENT of .30% will be imposed if the credit score is under 740
- 100% financing suspended for Freddie Mac; 97% is the maximum CLTV
- If loan to value is more than 60% and credit scores UNDER 720, additional LOAN LEVEL PRICE ADJUSTMENTS of .5% up to 2.75%, depending on the credit score will be assessed
- 100% financing available ONLY on "Home Possible" loans
All lenders will be required to follow the Investor guidelines and must charge the fees; some lenders will reflect the fees in a higher interest rate while others will disclose them as additional closing costs. The information I'm providing to you is based on a preliminary review of Investor memos, and may not be complete at this time.
Monday, 25 February 2008
Second Homes: Condos Pay Off As Second Homes
by Broderick Perkins
Make a condo, townhome or other community association property your second home and, chances are, you'll be pretty happy with your choice.
More than seven in 10 condo and townhome residents say they are satisfied with their purchase, according to a recent survey conducted by Zogby International for the Foundation for Community Association Research.
The foundation periodically conducts the survey to keep tabs on the perceptions of those who live in condos and townhomes and to identify recent trends in the condo world.
Satisfaction is a big trend in housing communities governed by homeowners associations due to a host of reasons.
Compared to single-family homes, condos are generally less expensive.
That's particularly true in areas where condo speculation once ran rampant, including Florida, Nevada, California and other areas which are now loaded with bargains not seen in years. Cheaper prices make condos cheaper to operate as a vacation home, because property taxes, homeowners insurance and utility bills cost less.
The National Association of Realtors (NAR) reported that in November, a 13-month supply of condos had swamped the market. That was the biggest backlog since NAR began keeping condo statistics in 1999. The National Association of Home Builders expects the oversupply to last through 2009.
Condos are also easy on your back.
Landscaping chores are managed not by you, but by the homeowners association. And, given the average condo has a smaller square footage footprint than the average single-family home, keeping the interior spic and span is easier too. Again, if your property is a vacation home, you'll spend much less time and money on upkeep than you would with the average sized single-family home.
What's more, the homeowners association, as the community's on-site governing body, is there to serve the best interests of the community. The association protects your home's value, provides security for the community and uses a professional management company to keep on top of operations.
With a single-family home, not only could you spend more, but you are also pretty much on your own keeping things in tip-top shape. That's tough when you've got vacation home guests coming and going.
It's key for buyers to understand that buying a second home in a community association is a lot like buying a share in a closely held, publicly traded, real estate holding company run by a board of directors -- typically volunteers with little experience.
"Community association living isn't perfect, and for some it's just not a good fit, but it's reassuring to know that most residents believe their associations are functioning effectively," said foundation President Robert Browning.
But most buyers do get it and have no qualms about how a condo community operates. The Zogby survey said more than 90 percent of those who buy a condo either were not put off by the living style or were motivated to buy because of it.
More than 60 million Americans live in an estimated 300,000 homeowner associations, condominium communities, cooperatives and other planned developments, up from 45 million residents in 223,000 communities in 2000, according to Community Associations Institute.
The Zogby survey also found:
- Eighty-eight percent of community association residents believe their association board members strive to serve the best interests of the community.
- Seventy-three percent of residents say management companies provide value to their communities.
- Seventy-four percent believe community association rules "protect and enhance" property values.
- Homeowners in homeowner association governed communities pay assessments for services and amenities such as landscaping, trash pickup, street lighting, pools and tennis courts. Nearly 80 percent say they get a good return for their assessment.
- Eighty-six percent said they knew they were moving into a homeowner association governed community when they decided to purchase; 61 percent had no qualms about the association's existence, 30 percent said the association made them more likely to buy or rent.
Published: February 21, 2008
Friday, 22 February 2008
Not All Markets Are Equal
by Lawrence Yun, NAR Chief Economist
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Though the national headlines have been pounding out the news of a housing market meltdown, implosion, and collapse, all markets are not equal. In NAR’s latest metro price survey, roughly half of the country experienced a price increase. Upstate New York is one example. While folks in the area have been kicking through the snow, home prices in the final quarter of 2007 rose 9% in Buffalo, 8% in Rochester, and a whopping 15% in Binghamton. The Texas market has been also doing its two-step dance with Corpus Christi, Austin, and San Antonio experiencing price gains of 6%, 6%, 8%, respectively. Not to be outdone, Amarillo home prices soared 11% higher.
And yes, there were some areas that weren’t dancing. Price declines are occurring no doubt, and quite notably in some coastal states and in markets with a high prevalence of subprime loans. Prices fell 13% in Cape Coral, 14% in Detroit, and 19% in Sacramento.
Significant Variations Across Markets
What the data clearly illuminates is that there are significant variations across markets. As real estate practitioners know very well, there are further measurable differences across neighborhoods within a metro market. No doubt there are some people under great financial stress. Subprime products that should never have entered the marketplace have wreaked havoc on many communities around the country. Homeowners unable to meet payments are losing their homes and falling home values have cut the equity of those homeowners who make their mortgage payments on time. Investors taking a walk may not feel the same financial squeeze but they are getting hit on credit scores – that is, many investors using low documentation loans bought multiple properties and are now simply walking away from those properties in declining markets. The calculus was simple – heads I win and tails I don’t lose. Prices rise, get the profit. Prices decline, then walk away – and let the lenders take the loss.
As I travel around the country speaking with many REALTORS®, I hear their side of the state of housing. Now, anecdotal information should always be read with caution. However, what does it mean when several REALTORS® in Columbus, Ohio say they have never seen such an upturn in foot traffic in open houses after the New Year? One of them said he had over 30 visitors in January, when just a few months earlier he had about only one or two onlookers. A similar buzz was in evidence during my recent visits to Maryland, Virginia, and Arizona. What was lacking from the buzz was the actual eagerness to sign contracts. Buyers were looking -- but unwilling to commit. In other words, weakened confidence is evidently holding back buyers.
All markets are unequal in other ways. Consider a Microsoft engineer in Seattle with a great salary and a top-notch credit score. A good-sized home in an upper-middle class neighborhood is priced at about $800,000. A jumbo loan is required. But a jumbo loan in the current environment is very expensive. Fortunately, relief is on the way. Congress and the White House have realized the unequal treatment of loans to some consumers and have now decided to raise the loan limits on FHA and GSE loans (albeit temporarily). As a result, by late spring, home sales on higher-priced homes will pick up.
Skirting Recession
As for the economy, it will be close, but we will skirt recession. Job gains of around one million can be expected for all of 2008, though that would be down from the 2-million annual average gains over the past two years. Affordability will improve as well – NAR’s housing affordability index is expected to rise from 113 in 2007 to 129 in 2008. Job gains and rising affordability conditions are the right combination to induce buyers into the marketplace.
The current market cycle is unique because of significant local market variations. It is also unique because of buyer psychology factors – in spite of pent-up demand and improving affordability conditions. Our forecast is, therefore, more uncertain. Having said that, home sales in the second half of 2008 will be notably higher than in the first half of the year.
Finally, let me paraphrase Warren Buffet’s investment philosophy: when everyone is greedy, be scared; and when everyone is scared, be brave. Now, I am not an investment counselor and I do not encourage people to buy simply based on this logic. Rather, if people have the financial capacity and are looking for a home for the long haul, the fear factor should be put aside. Current situations in many local markets present a golden opportunity in attaining the American Dream with historically low interest rates.
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Wednesday, 20 February 2008
The decision to buy or sell a home is fraught with personal choices and emotions. Having a trusted, experienced Licensee to guide you through the transaction can ease your mind, but do you know if you’ve found the right one?
Many Licensees are eager to work with you, but only a Licensee who is a Certified Residential Specialist (CRS) can provide the expertise to guide you through the transaction. A CRS is a proven leader in residential real estate, accounting for only four percent of all Licensees in the country. CRS Licensees have a high volume of transactions and advanced training in business planning, real estate investing, marketing and technology. A CRS also must maintain membership in the NATIONAL ASSOCIATION OF REALTORS® and abide by its Code of Ethics. With so much at stake in the fast-paced, competitive real estate market, it makes sense to work with a CRS Licensee.
Monday, 18 February 2008
According to the Insurance Information Institute, in the event of a fire or other disaster, a current, detailed home inventory can help you obtain enough insurance to replace the things you own, get claims settled faster, and substantiate any losses on your tax return.
Friday, 15 February 2008
Daily Real Estate News | February 15, 2008
Bernanke is Optimistic for Late '08
Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee on Feb. 14 that the central bank is likely to make fewer rate cuts in the immediate future.
Over the past six months, the Fed has cut rates by a total of 2.25 percentage points; but the aggressive moves have not done much to alleviate the credit squeeze. Bernanke said the economy is more likely to see the benefits of the rate cuts in the second half of the year, and analysts now say the markets still expect the Fed to cut rates at its next meeting on March 18 but do not expect it to be as aggressive in doing so.
The Fed "is signaling less rather than more in the way of future rate cuts and this is disappointing to those who feel more is necessary," says Richard DeKaser, National City Corp. chief economist.
Source: Investor's Business Daily, Scott Stoddard (02/15/08)
Tuesday, 12 February 2008
Nearly 30 percent of home electrical-wiring fires can be traced to the misuse of electric cords, such as overloading circuits, poor maintenance and running the cords under rugs or through high traffic areas.
Wednesday, 06 February 2008
Every market is different, but there are some common threads. Although the Girdwood real estate market is stable and balanced, there are some helpful, and humorous, points made below by Paul Pastore of RE/MAX Achievers in Chandler, Arizona:
Top 10 Ways Sellers Can Guarantee Their Home Won't Sell
1. Be casual, not serious, about selling.
A sage once quipped, "Money is only important when you don't want something enough." Real estate expert R.L. Brown said that if half of the 58,000 sellers in Maricopa County removed their for-sale signs we'd be at normal inventory levels. Actions speak louder than words in this market. Discretionary sellers should wait for a less competitive environment.
2. Price it wrong.
A home properly priced is half sold. No amount of full-color ads, glossy fliers, multiple photos, virtual tours, agent luncheons, Goodyear blimps, pom-pom girls or Saint Joseph statues will compensate for a wrong, timid retail price.
3. Ignore your agent.
Attorneys believe if you represent yourself, you have a fool for a client. Doctors don't self-diagnose. Professionals use professionals. Even though many people believe they're experts on raising kids and real estate, full-time, career pros usually know what's best. Listen to them very carefully.
4. Micromanage the marketing.
If you sold cookware in college, carts in California, or carpeting in Cranston, it does not qualify you to second-guess your agent. If you had a real estate license years ago, save your stories about the "good old days" for your children. You can share your concerns and timelines, but leave the details to the listing pro.
5. Reject staging suggestions.
Someday shag multi-colored, sculptured carpeting will come back. Whitewashed cabinets, Navajo white walls, linoleum flooring, lots of personal photos, and Elvis paintings on black velvet need to go. Now.
6. Let Fido loose.
I recently entered a house and had two frisky, friendly black Labs run up to sniff me. Unfortunately, I had light-gray dress slacks on that day. Both wet stains lasted for hours. Until that day I didn't realize dogs enjoyed chewing the tassels on expensive loafers.
7. Talk to the buyers.
Life gets lonely at times. Why not ask the buyers where they grew up? Or how much they qualify for. Tell them about the vacant rental next door. Maybe they could babysit next weekend! Why not share war stories, horror movies or meatloaf recipes?
8. Sell personal items.
Wow, maybe the buyers want to buy the patio furniture, rotary lawnmower, or life-size statue of Saint Anthony. You have only four more boxes of Girl Scout cookies to sell. Why not ask for a donation for the March of Dimes, the Humane Society, the local PBS station? Remember the saying, "loose lips sink ships."
9. Discount that smell.
My house doesn't smell of pets, baby diapers, curry powder, garlic, fried fish, coconut incense, cigars, manure, mulch, dairy farms or low tide. The buyer must be confusing my castle with a tract home.
10. Dismiss feedback.
What do buyers know anyway? They can't possibly mind my barbed wire fence, heavy-duty rebar, backyard bomb shelter, airport runway views, lights from the power plant, hum from the high-voltage lines, railroad tremors, scorpion skeletons, termite mud tubes and pet snakes. What are they thinking?
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