Another Hint Of Recovery

Sales contracts for homes rose 2 pct. in January

Sales contracts for US homes rose 2 percent in January, approach level considered 'healthy'

By Derek Kravitz, AP Real Estate Writer | Associated Press – 3 hours ago

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WASHINGTON (AP) -- The number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.

The National Association of Realtors said Monday that its index of sales agreements rose 2 percent last month to a reading of 97. That's the highest reading since April 2010, the last month that buyers could qualify for a federal home-buying tax credit and the last time the reading was above 100.

A reading of 100 is considered healthy.

The Realtors' group also released revised data for 2011. That lowered November's initial 19-month high of 100.1 to 96.9. But contracts have been markedly up since the summer when some feared a second recession loomed.

Contract signings typically indicate where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.

A sale isn't final until a mortgage is closed. One-third of Realtors complain that they've had at least one contract scuttled in January, December, November and October, according to the Realtors' group. That's up from 18 percent of Realtors in September.

Nonetheless, the gain in signed contracts supports other evidence of improvement in the housing market.

Pierre Ellis, an economist at Decision Economics, said home sales and building is in the midst of "ongoing general, but gentle, progress."

Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.

Homes are the most affordable they've been in decades. And mortgage rates have never been cheaper.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound.

"Easier mortgage lending criteria, very low rates and the improving labor market are all contributing to the beginnings of a real upturn in home sales, if not yet prices," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Sales may also be rising because of an April deadline for higher mortgage application fees for Fannie Mae and Freddie Mac-backed home loans. The government-controlled mortgage buyersown or guarantee about half of all U.S. mortgages and 90 percent of new loans, and have been telling customers to submit their applications now.

Analysts caution that the damage from the housing bust is deep and the industry is years away from fully recovering.

Potential buyers are holding off for a number of reasons. High unemployment and weak job growth have deterred many potential buyers. Loans are harder to come by. Lenders are requiring bigger down payments and strong credit scores to qualify.

Even those with good credit and stable finances are hesitant to buy out of concern home prices will keep falling.

Rising Slowly, But Surely

Rate on 30-year mortgage rises to 3.95 percent

Average rate on 30-year home loan jumps to 3.95 percent after 3 weeks at all-time low

By Derek Kravitz, AP Real Estate Writer | Associated Press

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WASHINGTON (AP) -- The average rate on the 30-year fixed mortgage jumped after standing pat for three straight weeks at record lows. But the rate stayed below 4 percent for the 12th straight week, keeping home-buying and refinancing attractive for those who can qualify.

Mortgage buyer Freddie Mac said Thursday the rate on the 30-year loan rose to 3.95 percent. That's up from last week's rate of 3.87 percent, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage rose to 3.19 percent from 3.16 percent. It hit a record low of 3.14 percent three weeks ago.

So far, low rates have done little to help the housing market, which is slowly improving. Few people can qualify for the rates and many who can have already done so.

The four-week average of home purchase applications dropped in late January and February while refinancing is mostly flat, according to the Mortgage Bankers Association. Refinancing now makes more than 81 percent of mortgage activity. 

But the housing market is flashing signs of health ahead of the spring-buying season. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.

The job market is also improving, which is critical to a housing rebound. In January, employers added 243,000 net jobs — the most in nine months — and the unemployment rate fell to 8.3 percent, the lowest level in nearly three years.

Frank Nothaft, Freddie Mac's chief economist, said the housing market is gradually starting to pick up. Still, home sales remain weak and it could take years for the market to fully return to health.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fees for the 30-year and 15-year loans were unchanged at 0.8.

For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.82 percent, and the average fee fell to 0.7 from 0.8.

The average on the one-year adjustable loan fell to 2.73 percent from 2.84 percent, and the average fee was unchanged at 0.6.

Good Deal Huh?

I always have clients asking about foreclosures and short sales because naturally everyone wants that "good" deal.  Sometimes it isn't always the best route to go.  Many times the home isn't in the best condition.  A property is sold as a short sale or bank owned property because the mortgage bills weren't paid and if they don't pay their mortgage do you think they would spend the money to upkeep the home?

It can get complicated so here's a quick rundown.

Short sales - The homeowner is behind on their mortgage and the value of their home is less than their loan.  Pretty much the home will be sold for less than what they owe because of the current market value of the home is less than when it was bought.  It is subject to lender approval.  Most short sales listed hasn't been approved by the lender yet.  It is just to attract an offer so they can submit it to the lender.  An offer has to be submitted to the lender before they issue an approval.  The approval is usually going to be in line with the current market value of the property.  That is pretty much the short sale process in a nutshell.  What you should take from all this is that the listed price on a short sale is probably not going to be the price it will be sold for because a lender approval is required.

REO(Real Estate Owned) - Bank/lender owned property.  These are properties that weren't able to be auctioned off at a trustee's sale so it belongs to the lender now.  They don't want to keep the property.  It goes back on the market near market value for the most part.  You are likely to get a REO property at the price listed.  However, just like any real estate sale, it is a bidding war so one of the things preventing you from getting the property at the listed price is when another buyer makes a better offer.

Remember, the banks want to get rid of these bad loans from their balance sheets but want to do it for top dollars.  You can MIGHT get a good deal, but it isn't the best route for most people.

As always, I like to share an article with you.  View below.


4 Questions to Ask Before Buying a Foreclosure
DAILY REAL ESTATE NEWS | TUESDAY, JANUARY 31, 2012

Foreclosures can offer big bargains, but buyers need to be careful that they don’t get over their heads in purchasing a home that may need more repairs than they bargained for.

Foreclosures are usually sold as-is, and homes that are left vacant standing too long can have a lot of maintenance problems.

Real estate experts suggest buyers consider the following questions:
1. How long has the home been vacant? Be cautious of a foreclosed home that has stood vacant for more than a few weeks or had its utilities shut off a long time. Marvin Goldstein, a home inspector for many foreclosed properties, says a home can deteriorate quickly when heating, cooling, electricity, and running water have been turned off for awhile.

2. How old is the home? Goldstein says that homes that are more than 50 years old may have a failing plumbing system or inadequate electrical wiring.

3. How does the home look? Are there broken windows, gutters hanging down, or damaged siding? “Trust your instincts. If the house looks bad from the outside, it's probably worse than you think,” Goldstein told The Oklahoman.

4. Is there anything missing? Sometimes former owners remove anything of value from the home, such as built-in light fixtures, bathroom tile, water heaters, air-conditioning units, and hardwoods, says Bill Jacques, president-elect of the American Society of Home Inspectors.
Housing experts encourage buyers to get a home inspector to look at the property, even if it is sold as-is, so that home buyers know any repairs needed and cost estimates before they purchase the home.

“Buying a bank-owned home gives you the opportunity to enter the market at a very low price level,” says Dorcas Helfant, a past president of the National Association of REALTORS®. “You can find terrific values among foreclosures, especially if they're not in too bad shape. But, remember, these houses are discounted for a reason.”

Put It In, Get It Out

Many homeowners like to customize their homes especially when they first bought it.  They put in tons of money fixing up their home or updating it so naturally they expect the cost to be recuperated when the time comes to sell.  Unfortunately it doesn’t work that way.  Rarely will you get your money back dollar for dollar but there are some projects that will let you recuperate more of your costs than others.

Put it in perspective.  A seller bought a car for $20,000 and years down the road spends another $5,000 on repairs and maintenance so in total he has put in $25,000 on that car.  He wants to sell it for $25,000 to cover all the money he has put in but would you pay that much?  Probably not right?  In fact, the $5,000 he spent was just to bring it up to sellable standard.

The similar concept is applicable to homes.  If you are updating a torn down kitchen or room, don’t expect to recuperate all your costs.  You are just bringing it up to sellable standard.  When it comes to extras that you add on to your home such as maybe a center island in your kitchen or a wet bar it might add value for you but not for the next buyer.  Consider this, did you put it in for yourself or with the next buyer in mind?

Lastly, you don’t want to build yourself out of your neighborhood.  What does that even mean?  That is when you change your home so much that the home doesn’t even belong on that street anymore.  Quick example, once in a while you will see a neighborhood with small houses that are old and then you will see this brand new oversized house on a tiny lot.  Sure, it is worth the price they are selling it for but then who would want to live in that neighborhood when you can get the same house at the same price in a better neighborhood where you don’t have to stand out.  Therefore, think before you start adding/removing things in your house and be prepared to put that money in and not get all of it back.

I want to share the article below for you to see which projects can get you the highest return.


2011-2012 Cost vs. Value: Which Remodeling Projects Pay Off the Most?
On January 25, 2012, in Helpful Tools, Remodeling Adviser, by Melissa Tracey
By Melissa Dittmann Tracey, REALTOR® Magazine

When tackling home remodeling projects, you’ll find some projects pay off more than others at times of resale. Remodeling Magazine, in conjunction with REALTOR® Magazine, recently released findings of its annual Cost vs. Value report for 2011-2012, revealing which remodeling projects offer the biggest bang for your buck.
Overall, the trend right now is replacement over remodeling–swapping out the old for the new rather than doing a total gut job, which can be much more costly.

This year’s Cost vs. Value report found that exterior replacement projects–such as new garage doors and a new entry door–offer some of the best returns at resale, allowing home owners to recoup close to 70 percent or more of the costs of the project at times of resale.

The following are the top, mid-range projects from this year’s report, based on what home owners stand to recoup at time of resale:

1. Replacing the entry door to steel
Estimated cost: $1,238
Cost recouped at resale: 73%
2. Attic bedroom (converting unfinished attic space into a bedroom with bathroom and shower)
Estimated cost: $50,148
Cost recouped at resale: 72.5%
3. Minor kitchen remodel (including new cabinets and drawers, countertops, hardware, and appliances)
Estimated cost: $19,588
Cost recouped at resale: 72.1%
4. Garage door replacement
Estimated cost: $1,512
Cost recouped at resale: 71.9%
5. Deck addition (wood)
Estimated cost: $10,350
Cost recouped at resale: 70.1%
6. Siding replacement (vinyl)
Estimated cost: $11,729
Cost recouped at resale: 69.5%

BUYING vs. RENTING - What You Should Know

There are many advantages to buying a home versus renting one. View these advantages in the Buy vs. Rent Comparison Chart, or view a financial comparison of buying versus renting in the Buy vs. Rent Calculator.
Your income, savings, and monthly expenses play an important role in determining how large a mortgage you can afford. To figure out the amount you can afford, please click Affordability.
 Savings: Buying

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.


Buy vs. Rent Comparison
The chart below shows a cost comparison for a renter and a homeowner over a seven year period.
 

• The renter starts out paying $800 per month with annual increases of 5%
• The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
• After 6 years, the homeowner's payment is lower than the renter's monthly payment
• With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3years

 Monthly Expenses: Buying
Your rental company takes part of your rent payment to cover certain housing expenses. When you decide to purchase a home, you accept responsibility for paying for these expenses (listed below). They are additional costs to your monthly mortgage payment and should be included in your budget estimates:

• Property Taxes and Special Assessments
• Home/Hazard Insurance
• Utilities
• Maintenance
• Home Owner Association (HOA) Fee: Doesn't apply to all purchases. It pays for trash and snow removal and maintenance of common grounds if applicable.
• Membership Fee: It may pay for recreational facilities and other services (cable TV).

Source: Ginnie Mae

Not Your Grandma's Bathroom

It is one of the most important rooms in a home believe it or not.  We are in there throughout the day every day.  Some people are in there way longer than others but either way, there are more reasons now than ever before to “hang around” in there longer.


Hot Trends for Bathroom Remodeling in 2012
Article From HouseLogic.com

By: Jamie Goldberg
Published: January 09, 2012

From toilets that double as sound systems to water-conserving spa experiences, here's what's trendy for bathroom improvements for 2012.

Trend #1: Conservation rules
 All around the country, water reserves are stressed. In response, regional governments are implementing conservation measures. As a result, there are likely to be new regulations that'll affect your construction or remodeling plans. Here's what to watch for:

Your new toilet will have a lower flush-per-gallon rating than the one that's in there now. Consider a dual-flush version, or any low-flow toilet (http://www.houselogic.com/home-advice/saving-water/low-flow-toilets-how-choose/) coming on the market that meets your style preferences. At the very least, your next commode is likely to feature a 1.28 gallon-per-flush rating - better than even the most-recent 1.6 GPF offerings.You'll find them at home improvement centers from $100 to luxury showroom models for thousands more.

The WaterSense (http://www.houselogic.com/home-advice/saving-water/what-is-water-sense-label/) label,launched in 2006 by the Environmental Protection Agency to promote water conservation by plumbing manufacturers and home owners, will become as well-known as Energy Star (http://www.energystar.gov/). You'll be shopping for low-flow shower heads (http://www.houselogic.com/home-advice/saving-water/low-flow-showerheads-how-to-choose/) and faucets with the WaterSense symbol on the box. Just as with Energy Star appliances, there is no cost premium associated with WaterSense savings -- there are faucets in every price range. WaterSense shower heads are newer on the market, with a more limited selection today - mostly at more affordable prices.

You'll start seeing more shower heads (http://www.houselogic.com/home-advice/saving-water/low-flow-shower-head-features/)- especially rain shower models - using Venturi principles that deliver strong water pressure by adding air, not water, to the mix. They're available in every price range, from ultra-affordable standard heads to luxury rain showers.

Trend #2: Technology advances

You may not think of your bathroom as a high-tech space, but that's about to change. Here are some of the trends that can benefit your home:

You'll be able to create a custom showering experience more affordably than ever. For $300 for simple controllers to $3,500 or more for a complete luxury installation, programmable showers let you digitally set your preferred water temperature, volume, and even massage settings before you step in. To achieve a personalized showering experience, you'll need a 120-volt power source, and a thermostatic valve and controller in addition to your standard shower head or heads. Luxury models may include a steam system, a wi-fi source for music, multiple body spray outlets, tankless water heater, and a secondary controller to start the system from another room.

Dock your iPhone or MP3 player directlywith your speaker-equipped, high-tech toilet (http://www.houselogic.com/home-advice/plumbing/high-tech-toilets-that-would-fit-right-in-jetsons/) so you can entertain yourself on the commode. While you're not likely to invest $4,000 to $6,000 for a Kohler Numi toilet using this technology today, start looking for competitive models later in the year with lower prices.

Catch up on news and weatherwhile you brush your teeth. Television screens are being integrated into medicine cabinets and vanity mirrors. Cost? Early entries to the market command a premium $2,200 to $2,400 price tag.

Plug your smart phone or MP3 player into your medicine cabinet so you won't miss a call or song while getting ready for work or bed. A built-in jack keeps your unit charged (and away from wet countertops) and linked into a built-in speaker system.

Trend #3: Aging demographics emphasize safety

 It's not just high-tech that's bringing an "experience" to the bathroom. Trends in universal design features add comfort, convenience, and safety. But that doesn't mean your bathroom has to look institutional. Here are some universal design (http://www.houselogic.com/home-advice/universal-design/universal-design-features-for-bathroom/) innovations that can factor helpfully (and stylishly) into your 2012 bath remodeling plans:

Sleek, low-profile linear drains are ideal for creating safe, zero-threshold shower designs. Unlike standard round drain covers that are typically mounted near the front end of a shower, these long, straight drains can be installed in different locations to minimize the slope of the shower floor. One popular location is at the outside edge of the shower, creating a wheelchair-friendly curbless shower. More offerings in more finishes -- including nearly invisible tile-in channel models that are largely covered by shower floor tile -- are becoming the standard for upscale spaces. You'll spend $500 to $900 for a quality linear drain.
The rapidly-expanding selection of porcelain, glass, and ceramic tiles makes it easy to find slip-resistant, low-maintenance floors that don't skimp on style. Expect to see faux wood, linen, and uniquely-textured looks for tiled bathroom floors and walls in 2012. The texture adds both visual impact and better traction for wet feet.

The accessible tub is no longer limited to the high-walled, narrow-door format that dominated the market in the last decade. Newer models, such as Kohler's Elevance ($5,100), employ rising panels in front that give more of a traditional tub look with easier entry and exit. Others use standard hinged, sealed doors, but are increasing door width by several inches for better accessibility and appearance.

What improvements - big or small - are you planning for your bathroom this year?

A Summary Of Your Worthiness

One of the first things many lenders will look at before considering whether you are a worthy candidate to receive a loan is your credit score.  Even if you can afford to pay back a loan but have a poor credit, your loan can and probably will be turned down.  If you think about it, what good is it to the lender if you make a $1,000,000 but don’t pay your bills?  A good credit score shows that you can be trusted to pay back your debt.  Of course, if you can afford to buy a home without a mortgage then you don’t have to worry about this at all.

Okay, so realistically not everyone has perfect credit, but it’s not too late to start fixing it.  The obvious one is to start paying down your debt and making your payments on time.  Lenders like to see a gap between the amount of credit you're using and your available credit limits. Getting your balances below 30% of the credit limit on each card can really help; getting balances below 10% is even better.

If you are a renter and want to buy in the future you would want to make a good habit of paying your rent on time every month.  Every little thing that has to do with making a payment affects your credit.  Take a look at the article below.




Rental History: More Important in Getting a Mortgage?
DAILY REAL ESTATE NEWS | TUESDAY, JANUARY 10, 2012

Borrowers who have a history of paying rent on time may see a boost to their credit score.
Experian, a leading credit report company, added a section to its credit reports last year that reflected on-time rent payments, which helped give a boost in the credit scores to some on-time rent payers. Now the two other major credit reporting companies are following suit.

CoreLogic and FICO recently announced they are also adding a score that reflects payment histories from landlords, The New York Times reports.

“Evidence of positive rental payments could be a plus for consumers,”  Joanne Gaskin, FICO’s director of product management global scoring, told The New York Times.

Nearly half of high-risk consumers saw an increase of 100 points or more after their rental history was added to their credit report, says Brannan Johnston, the managing director of Experian’s rent bureau. Consumers with average or higher credit scores, on the other hand, did not see any major difference to their scores.

For former home owners who lost their homes to foreclosure, they may be able to rebuild their credit histories more quickly now by showing they are “very responsible renters,” Tim Grace, senior vice president of CoreLogic, told The New York Times.

Is It Rising Now? – When and Where?

Several Housing Markets Head for Appreciation in 2012
DAILY REAL ESTATE NEWS | TUESDAY, JANUARY 03, 2012


A boom in farm prices has caused many Midwest cities to emerge as leaders for some of the strongest predictions for housing appreciation in 2012. Kansas City, Kan., came in the top spot in HousingPredictor’s annual survey, forecasting an appreciation of 5.8 percent for this year.

“The recovery is starting in housing with these cities and will eventually spread to other communities throughout the nation as the U.S. recovers from the worst collapse in real estate since the Great Depression,” according to HousingPredictor.

Here are the top cities expected to have housing appreciation in 2012 and by how much, according to HousingPredictor’s latest report:

1. Kansas City, Kan.: 5.8%
2. Topeka, Kan.: 4.7%
3. Charleston, W.V.: 4.5%
4. Oklahoma City, Okla.: 4.3%
5. Minot, N.D.: 4.2%
6. Overland Park, Kan.: 4.2%
7. Wichita, Kan.: 4.1%
8. Huntington, W.V.: 4%
9. Wheeling, W.V.: 3.9%
10. Bismarck, N.D.: 3.6%
11. Casper, Wyo.: 3.5%
12. Lake Charles, La.: 3.4%
13. Rapid City, S.D.: 3.2%
14. El Paso, Texas: 3.2%
15. Cheyenne, Wyo.: 3.2%

Beware – Is It My Turn Yet?

Is it a buyer’s market or a seller’s market right now?  I had someone ask me that during a long car ride the other day and I wanted to instinctively say it is a buyer’s market because for the most part, it is. However, as with anything in life, it really depends on your situation.

Right now interest rates are at record lows, home prices have come down and there are much more homes to choose from! A few years back you might find your dream home and learn that Jimbo from down the street had outbid you but you couldn’t afford to outbid him…and the search starts all over.  If you have been wanting to buy, definitely do it now if it is within reach for you.  Don’t wait until interest rates start moving up and home prices start skyrocketing again before you jump in the game because you want to “wait it out” right now.  By then it is too late.


As for sellers, you probably won’t be getting the price you picture your home to be worth.  There have been many properties sitting on the market for over a year because of pricing.  Unfortunately prices have come down from the height of the real estate market boom of 2005-2007 yet many homeowners won’t accept that reality which explains why many home prices aren’t going down more than they already have even though the amount of inventory out there today warrants a decline in prices.  However, if you MUST sell, do it now in case more foreclosures hit the market which leaves buyers with even more to choose from and you struggling to get your home noticed.  Also, don’t forget that the longer you wait means more property taxes you will be paying on a home that you want off your hands.


Be sure to take a look at the article below.


Americans Eager to Buy, Sellers Aren’t Happy?
 DAILY REAL ESTATE NEWS | WEDNESDAY, DECEMBER 21, 2011


Nearly 80 percent of home buyers say now is a great time to buy a home, but sellers say it’s not a great time to sell, according to a new study, “The Great Recession and Attitudes Toward Homebuying,” released this week by the Mortgage Bankers Association. In fact, homeselling sentiment has fallen to record lows.

As for home buyers, they certainly have plenty to be happy about -- housing prices have fallen and interest rates are at record lows, pushing affordability to record levels and allowing buyers to snag great deals on housing.
But sellers, on the other hand, are getting discouraged that they can’t find buyers for their homes at a desirable sales price as well as the large overhang of mortgages past due or in foreclosure, according to the report.

"In economic terms, as market values have fallen, potential sellers have not adjusted their price expectations downward fast enough to bring buyer and seller sentiment in line with one another," Gary Engelhardt, a professor at Syracuse University who authored the study, said in a statement.

Sellers still can’t accept that their home values have fallen and they are no longer able to get the prices from the past, according to the study.

Meanwhile, “despite high unemployment and slow economic growth, the bulk of American households believe that now is a good time to buy a home,” Engelhardt said. The strongest positive sentiments toward buying was found among young, educated, white, and Hispanic households, according to the study.

“The pattern of home-buying sentiment during the current recession looks very similar to that of past recessions,” Engelhardt notes. “Home buyer sentiment falls as the unemployment rate increases, and improves as job growth returns and housing becomes more affordable. What distinguishes the current recession, though, is the dramatic decline in home-selling sentiment. From 1992 through 2005, positive home-selling sentiment fluctuated between 40 and 60 percent. Since 2005, sentiment has dropped precipitously, to around 7 percent currently, even while home-buying sentiment remains high.”