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Four of 10 Recent Buyers Relied on FHA Loans

December 21st, 2009 1:24 PM

December 21, 2009

WASHINGTON, D.C.—The Federal Housing Administration insured the loans of 39% of recent buyers, according to new data from the REALTORS® Confidence Index (RCI) survey.

The 3,161 NATIONAL ASSOCIATION OF REALTORS® members responding to the November survey also said 51% of their customers were first-time homebuyers.

“FHA helps provide affordable mortgage financing to homeowners, particularly first-time home buyers who are so important in drawing down inventory to help stabilize the current housing market,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “These recent survey results reaffirm that, despite its current challenges, FHA is a critical part of the American housing fabric.”

The RCI results also indicated that distressed sales increased to 33% of all home sales last month, and that both investors and first-time home buyers are competing for these properties.

The preponderance of distressed properties on the market has also influenced buyers’ perceptions of other homes for sale. REALTORS® report that many buyers have pricing expectations that treat every property as if it were in foreclosure.

In addition, REALTORS® expressed ongoing concerns with the impact of the Home Valuation Code of Conduct (HVCC) on recent appraisals. According to some survey respondents, inexperienced or out-of-area appraisers continue to rely heavily on sales prices of distressed properties, even when other comps are available.

The HVCC makes lenders responsible for hiring appraisers, but also requires lenders to insulate themselves from the appraisal process. That led to a dramatic increase of the use of appraisal management companies (AMCs)—large brokers for individual appraisers. AMC-assigned appraisers may be inexperienced and may not have any personal knowledge of a particular neighborhood.

These factors often adversely affected the sale or the sales process, which occasionally resulted in the loss of a sale or a homeowner’s inability to refinance into today’s lower rates.

“As most of us are aware,” said NAR Chief Economist Lawrence Yun, “the housing market recovery to date has been concentrated in the lower-end starter home segment. Although the mid-priced market has begun to show signs of life, it’s still far below normal activity.”

Although the market for upper-end homes market remains sluggish, enlarging the tax credit to include move-up buyers will add the necessary “juice” to broaden the recovery, he added.

With more move-up buyers in the market, there may be less impact in the overall net inventory (a person sells before buying so it looks as a “wash” on inventory). Still, the increased sales have the added benefit of making HVCC and appraisal issues less problematic since appraisers will have more recent home sales to use when setting values.

“Adding it all up, home sales are now expected to get a boost by roughly 15% next year,” Yun predicated.
He forecasts existing-home sales of 5.7 million units in 2010 (up from 5 million units in 2009) and 550,000 new home sales (up from 400,000).

“More important, inventory will likely fall to a 6 to 7 months’ supply by the middle of next year,” Yun said. “That draw-down of inventory means that that there are likely to be modest home price gains. Roughly speaking a 2% to 5% price gain is likely in many parts of the country in the next year.”

As always, there are some caveats. Despite the very positive news on the housing stimulus, there remain significant risks to the forecast. Mortgage rates will rise from their rock-bottom points as we move into the next year, Yun said.

“The labor market is another worry. Though anticipated, the rising unemployment rate is a painful reminder that not all is well,” he added.

“Despite the risks of rising mortgage rates and rising unemployment, the housing outlook has significantly improved. As the fear of falling home values disappears, that one key negative factor that has held back home sales will no longer be in play. Happier days are ahead,” Yun predicted

Posted by Christopher Tryon on December 21st, 2009 1:24 PM

The Highest Offer May Not Be the Best

December 29th, 2009 2:35 PM

Sellers who get more than one offer should be aware that the highest offer isn’t necessarily the best offer, say experienced practitioners.

In this tough market, going with the buyer who has enough cash to pay a large down payment and who won’t be scared away if the inspection uncovers some needed repairs is often the wise choice.

Practitioners should encourage sellers to review all the terms and conditions of the sales contract. In some areas, the allocation of fees can take a big bite out of the net proceeds. While most contracts are written to reflect that, it isn’t always the case.

Also, the closing date in the offer should be considered carefully. A buyer who can close quickly can save a seller thousands. Offers contingent on the sale of another property are particularly suspect in this market.

Source: Inman News, Dian Hymer (12/28/2009)

Posted by Christopher Tryon on December 29th, 2009 2:35 PM

How to Get the First-Time Home Buyer Tax Credit

December 28th, 2009 5:25 PM

You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:

Close on your home purchase by November 6, 2009. (If you closed on your home on or after November 7, 2009, please see: How to Get the Extended Home Buyer Tax Credit for more information.)
Ensure that you are a qualified first-time buyer under IRS guidelines,
Decide which year to file under, 2008 or 2009,
File an amended 2008 return or choose to apply the credit to your 2009 tax return.

Deciding When to Apply the Credit

If you want the benefits of your credit as soon as possible:

You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.

If you anticipate a drop in income next year:

You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).

Your Next Steps

Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:

Fill out Form 5405 to determine the amount of your available credit, and
File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return.

Posted by Christopher Tryon on December 28th, 2009 5:25 PM

Merrimack Valley Region of MA

December 28th, 2009 2:05 PM

The Merrimack Valley of Massachusetts is an area of rich history, scenic beauty, and diverse culture. Encompassing the northern parts of Middlesex and Essex Counties, the region is made up of the many cities and towns that lie along or near the banks of the Merrimack River from the New Hampshire border south to Lowell then northeast to Newburyport.

The river forms the geographic core of the region and is at the center of its history as well. Indigenous peoples populated the river's banks from prehistoric times, and the valley was an early center of agriculture from the time of European settlement. But the Merrimack's greatest contribution to the history of the region and, indeed, of the United States, is its providing the water power to fuel the American Industrial Revolution. By the 1850's and continuing for almost 100 years, the mills in the cities of Lowell, Lawrence, and Haverhill were the giants of the textile industry in America.

After the mills moved south, the cities in the Merrimack Valley saw years of decline. Within the past twenty years, however, a Renaissance has begun, with new diverse industries now occupying many of the mill buildings. The region's textile mill heritage is preserved, though, at the Lowell National Historical Park, a unique urban park tracing the history of the mills and its workers.

And while the mills are important to the history of the region, they represent only one of many facets of a richly diverse area that offers an exceptional quality of life. The Lowell area boasts the University of Massachusetts Lowell and two major healthcare facilities, as well as professional baseball and ice hockey and the Merrimack Repertory Theater. Andover is home to Phillips Academy, one of the most prominent prep schools in the country. Recreational and cultural opportunities abound throughout the region.

In addition, Boston is next door, with easy access by highway and by train. In sum, the Merrimack Valley offers the best of both worlds, with comfortable suburban living within easy reach of all the amenities of a major metropolitan area.

Sources:

www.merrimackvalley
chamber.com

Posted by Christopher Tryon on December 28th, 2009 2:05 PM

5 Home Remodeling Trends for the New Year

December 28th, 2009 1:58 PM

5 Home Remodeling Trends for the New Year
Remodeling and decorating trends in 2010 are likely to reflect the fact that many home owners are settling in for the long haul.

Here are some ideas for updating homes and gardens from decorators and leading real estate practitioners:

Environmentally sensitive furniture. Natural fibers, sustainable woods, and recycled products are key to attracting environmentally concerned buyers.
Classic neutral colors. Deep gray browns and gray blues, muted beige, and chalky white will be particularly popular shades, Pittsburgh Paints predicts.
Backyard gardens. First Lady Michelle Obama led the way in 2009 when she installed one at the White House.
Backyard living. Wood-deck additions offer an 80.6 percent payback, according to the annual Cost vs. Value Report from Remodeling magazine and REALTOR® magazine. Simple fire pits and outdoor fireplaces also will be popular, trend-watchers say.
Made in America. As more people feel compelled to support local employment, U.S. manufactured products and antiques will become more popular, says Patricia Shackelford, author of design blog, Mrs. Blandings.

Source: Orlando Sentinel, Jean Patteson (12/26/2009) and Kansas City Star, Stacy Downs (12/27/2009)

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Posted by Christopher Tryon on December 28th, 2009 1:58 PM

Lowell, MA

December 24th, 2009 11:57 AM

Lowell, MA

With an estimated 2006 population of just over 203,000, the City of Lowell, a planned urban community built around the Merrimack River, is the fourth largest city in Massachusetts and is considered by many to be the jewel of the Merrimack Valley.

Originally a farming community called East Chelmsford, the city started to grow in the early 1800's when the textile industry, attracted by the prospect of waterpower, effectively gave birth to the Industrial Revolution in America.

After about a hundred years of industrial prominence, Lowell began a decline when the textile industry moved south. But the city continues to experience a Renaissance that began in the 1970's, built around education and high-tech industries. Lowell has also become a tourist destination and cultural center, incubated by the Lowell National Historical Park. The restoration of the mill buildings within the Park has spawned other rehabilitation projects for housing and other uses.

Educational and cultural opportunities abound in Lowell. The city is home to the University of Massachusetts Lowell, and Middlesex Community College is nearby. The University houses the Merrimack Repertory Theater and the Lowell Memorial Auditorium hosts a number of concerts each year.

In the summer months, the Park produces the Lowell Summer Music Festival, and the Lowell Folk Festival typically draws over 200,000 attendees. In addition, the city enjoys the rich tradition of ethnic diversity that began over 100 years ago, offering residents a special opportunity to experience cultures from around the world. Lowell is also the home of two professional sports teams, the AHL Lowell Devils and a rookie-league farm team of the Boston Red Sox, the Lowell Spinners.

A new master plan has recently been implemented, designed to foster planned growth for the next two decades and to establish Lowell as a "lifetime city," where a resident can enjoy a rich full life through every stage of life. In addition, the school district has recently completed nine new schools and completely rehabbed five others. These improvements, plus Lowell's easy access to Boston both by rail and automobile, make the city a most desirable location for anyone desiring an urban lifestyle.

Posted by Christopher Tryon on December 24th, 2009 11:57 AM

Homeowners - Exterior Remodeling Projects Prove Best Bang for Your Buck

December 24th, 2009 10:23 AM

RISMEDIA, December 24, 2009—Despite a slow market and a slight decrease in the resale value of most remodeling projects, Realtors report that the smartest home improvement investments may also be some of the least expensive. Results from the 2009 Remodeling Cost vs. Value Report show that small-scale exterior projects are the most profitable at resale, according to estimates by Realtors who completed a recent survey.

On a national level, eight out of the top 10 projects in terms of costs recouped were exterior replacement projects that cost less than $14,000. Certain types of door and siding replacements, as well as wood deck additions all returned more than 80% of project costs upon resale. A steel entry door replacement–a new addition to this year’s list–recouped 128.9% of costs, followed by upscale fiber-cement sliding replacements at 83.6%. Wood deck additions recouped 80.6% of costs.

“Once again, this year’s Remodeling Cost vs. Value Report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “With exterior projects returning a high percent of project costs upon resale, Realtors can help give your home curb appeal while adding value to the real estate transaction.

The 2009 Remodeling Cost vs. Value Report compares construction costs with resale values for 33 midrange and upscale remodeling projects comprising additions, remodels and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 12th consecutive year that the report, which is produced by Hanley Wood, LLC, was completed in cooperation with Realtor Magazine, as Realtors provided their insight into local markets and buyer home preferences within those markets.

On a national level, the project with the biggest improvement from 2008 was the attic bedroom addition, recouping 83.1% of remodeling costs compared to 73.8% in 2008. The only other interior project that landed in the top 10 was a minor kitchen remodel with 78.3% costs recouped.

Other exterior projects in the top 10 include midrange vinyl and upscale foam-backed vinyl sliding replacements, which returned more than 79% of costs. In addition, several types of window replacements–midrange wood, midrange vinyl, and upscale vinyl–all returned more than 76% of costs upon sale.

Similar to last year’s report, the least profitable remodeling projects in terms of resale value were home office remodels and sunroom additions, returning only 48.1% and 50.7% of project costs.

Regionally, cities in the Pacific states of Alaska, California, Hawaii, Oregon and Washington once again outperformed the rest of the nation in terms of remodeling costs recouped upon resale. The West South Central region of Arkansas, Louisiana, Oklahoma, and Texas; the East South Central region of Alabama, Kentucky, Mississippi and Tennessee; and the South Atlantic region of the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia also performed relatively well.

The regions that generally returned the lowest percentage of costs were New England (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont), East North Central (Illinois, Indiana, Michigan, Ohio and Wisconsin), West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota), and the Middle Atlantic (New York and Pennsylvania).

Golder commented that remodeling projects are just one of many factors that contribute to a home’s overall resale value. “As the first, best source for real estate information, Realtors are experts in providing insight into what projects and investments will make a difference in your house. It’s important to consult with a Realtor who can explain the variety of factors that affect a home’s value, such as location, condition of surrounding properties and the regional economic climate,” she said.

For more information, visit www.realtor.org.

Posted by Christopher Tryon on December 24th, 2009 10:23 AM

HUD Issues Booklet to help consumers shop for home loans

December 24th, 2009 10:22 AM

RISMEDIA, December 24, 2009—The U.S. Department of Housing and Urban Development (HUD) recently released a new settlement cost booklet to help consumers shop for the best mortgage to meet their needs. This booklet will help borrowers become familiar with the various stages of the home buying process, including deciding whether they are ready to buy a home, and providing factors to consider in determining how much home they can afford. Consumers will also learn about the sales agreement, how to use HUD’s new standard Good Faith Estimate to shop for the best loan, required settlement services, and the HUD-1 Settlement Statement they will receive at closing.

The booklet will help consumers become familiar with how interest rates, points, balloon payments, and prepayment penalties can affect their monthly mortgage payments. In addition, there is important information about your loan after settlement, including how to resolve loan servicing problems with your lender, and steps you can take to avoid foreclosure. After you have purchased your home, this booklet will help you indentify issues to consider before getting a home equity loan or refinancing your mortgage. Finally, contact information is provided to answer any questions you may have after reading this booklet.

For more information, visit www.hud.gov.

Posted by Christopher Tryon on December 24th, 2009 10:22 AM

Stage it to the limit

December 23rd, 2009 3:06 PM

Stage it to the limit

5 ways sellers can maximize curb appeal

By Mary Umberger, Wednesday, December 23, 2009.

Inman News

Flickr photo by <a href="http://www.flickr.com/photos/alexkehr/2218312703/">Alex Kehr</a>.

Flickr photo by Alex Kehr.

For most home sellers, it probably would come as a "well, duh" suggestion from their real estate agents that they need to keep the grass cut and landscaping tidy.

But there's plenty more front-yard primping that could -- make that must -- be a priority for sellers, according to Sue Guers, a Fountain Hills, Ariz., designer and home stager. She says many sellers don't give as much thought to curb appeal as they should because they often enter and exit by car, via their garages. They just don't see the yard the way buyers do, she said.

"You've only got a few minutes to make that great first impression," said Guers, who estimates that 90 percent of her company's staging and design work is done on behalf of local real estate agents. "Some people decide within 15 seconds whether to come in and look at the house, based on what they see on the outside.

"Remember, you're merchandising a product," she said. "It's got to be new and bright and shiny and clean. There's got to be a sense of 'arrival' when they drive up."

Five things to keep in mind about front-yard facelifts:

1. Start out in somebody else's yard. "Take a step back and walk the neighborhood," Guers said. "Look at the houses that intrigue you from a visual perspective."

Take an inventory of their "visual value," from the condition of the roof shingles to the cut of the shrubbery, she said. Then go home and see how close your own house comes to meeting that standard.

2. Your house probably needs a bath. "Yes, people actually ought to wash their house," said Guers, who operates her Property Promoters firm with fellow designer Laura Harvey (ThePropertyPromoters.com). "They may be good at painting it every five years, but if they haven't power-washed their house in a couple of years, they're going to need to do that.

"And power-wash the sidewalks, too," she said. "You'd be surprised at how different it makes them look."

Plus, fix sidewalk cracks while scrutinizing them, she said.

3. Take a hard look at your hardware. "Replace older house numbers and older hardware that's simply out-of-date," she said. "Sellers forget the mailbox, and the house numbers." ... maybe expensive -- undertaking, but in the case of doorknobs, doorbells, kickplates, and exterior light fixtures that look tired or out of style, doing as much as you can afford to freshen up will be an investment in making a better impression, she said.

(While you're standing on the porch, give that grungy old welcome mat the once-over, too, she said.)

4. Paint, in some cases, can save the day.
"You can paint some existing hardware, such as light fixtures, especially if there's an old finish that you want to update to a different color," Guers said. "Brass is pretty much outdated now."

The good news is that brass accepts paint well, but be careful to pick the right paint; consult a good paint retailer to be sure, she said.

5. The hole truth. Some popular get-it-sold programs on cable television recently have actually been "fixing" bare patches in front lawns by spraying them green.

It's a real option -- mostly used in warm-weather climates -- but not one that Guers recommends.

"If you go to (the big-box hardware retailers), these products are right there with the fertilizer," she said. "It's nothing more than spray paint, but it's an outdoor version.

"You have to be careful with it," she said. "It only comes in a few shades, and you have to get the right shade."

But Guers says in her view the technique looks better on TV than in reality.

"We recommend authenticity over quick fixes," she said. "People are going to see through the spraying. We'd rather have homeowners spend the money to put sod in. It shows buyers you've taken care of the house and you're not faking anything.

"If you don't spend time on the outside, they're never going to make it inside."

Mary Umberger is a freelance writer in Chicago.

***

Posted by Christopher Tryon on December 23rd, 2009 3:06 PM

Lowell MA Sales Roundup

December 15th, 2009 4:47 PM

Posted by Christopher Tryon on December 15th, 2009 4:47 PM

Dracut MA Market Action Index

December 10th, 2009 3:16 PM

Posted by Christopher Tryon on December 10th, 2009 3:16 PM

Dracut MA Real Estate Inventory

December 10th, 2009 3:09 PM

Posted by Christopher Tryon on December 10th, 2009 3:09 PM

Dracut MA Average Days on Market

December 10th, 2009 2:58 PM

Posted by Christopher Tryon on December 10th, 2009 2:58 PM

Lowell MA Area Update-Median Price For Dracut, MA

December 10th, 2009 2:34 PM

Posted by Christopher Tryon on December 10th, 2009 2:34 PM

Market Action Lowell, MA

December 9th, 2009 3:05 PM

Posted by Christopher Tryon on December 9th, 2009 3:05 PM

Inventory for Lowell, MA

December 9th, 2009 2:59 PM

Posted by Christopher Tryon on December 9th, 2009 2:59 PM

Averge Days on Market for Lowell, MA

December 9th, 2009 2:53 PM

Posted by Christopher Tryon on December 9th, 2009 2:53 PM

Median Price for Lowell , MA

December 9th, 2009 1:17 PM

Posted by Christopher Tryon on December 9th, 2009 1:17 PM

IRS Sets New Rules for Tax Credit

December 7th, 2009 5:22 PM

IRS Sets New Rules for Tax Credit
The IRS has spelled out guidelines for eligibility for the home buyer credit when co-borrowers purchase a property.

When a home-owning parent of an adult child co-signs for a mortgage and both names appear on the note, the IRS says that under some circumstances, the first-time home buyer can qualify for the whole amount.

The IRS says the parent doesn’t qualify for any portion of the credit, but if the child hasn’t owned a home during the three years preceding the current purchase and can qualify based on income, he or she can be allocated the entire $8,000 credit.

When unmarried individuals co-purchase a home and only one of them is eligible for the credit, then the full $8,000 can be allocated to the eligible buyer.

Source: Washington Post Writers Group, Kenneth R. Harney (12/04/2009)

Posted by Christopher Tryon on December 7th, 2009 5:22 PM

30-Year Rates Hit Record Low

December 4th, 2009 2:15 PM

The average interest rate for 30-year mortgages has fallen to the lowest level since Freddie Mac began compiling its weekly survey in 1971, declining to 4.71 percent this week from 4.78 percent a week ago.

Rates also were more attractive for 15-year fixed loans, which fell from 4.29 percent to 4.27 percent, but many consumers may not have qualified for them because they now face higher credit standards from lenders.

Still, the Mortgage Bankers Association's index of application demand, which rose 2.1 percent on a seasonally adjusted basis during Thanksgiving week from the previous week, shows that consumers were looking to take advantage of mortgage rates at a historic low.

Source: USA Today, Stephanie Armour (12/04/09)

© Copyright 2009 Information Inc.

Posted by Christopher Tryon on December 4th, 2009 2:15 PM

Nine Consecutive Gains for Pending Home Sales

December 2nd, 2009 4:37 PM

Nine Consecutive Gains for Pending Home Sales
Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.”

By Region

Pending sales in the Northeast surged 19.9 percent to 100.2 in October and is 44.2 percent above a year ago.
In the Midwest, the index rose 11.6 percent to 109.6 and is 36.6 percent higher than October 2008.
Sales in the South increased 5.4 percent to an index of 115.4, which is 31.6 percent above a year ago.
In the West, the index fell 11.2 percent to 127.7 but is 21.9 percent above October 2008.

Not Out of the Woods Yet
Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.

“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.

Source: NAR

Posted by Christopher Tryon on December 2nd, 2009 4:37 PM