Housing Starts jump 17% in May, wholesale inflation tame.
By Paul Davidson
Housing starts shot up 17.2% in May compared with April in a sign that construction of single-family homes has begun a modest turnaround that could bolster an economic recovery by year's end.
Construction of homes and apartments rose to a seasonally adjusted annual rate of 532,000 in May after hitting an all-time low in April, the Commerce Department said Tuesday. That soundly beat analysts' estimates of 485,000.
Building-permit applications increased 4% to a seasonally adjusted annual pace of 518,000.
Most significant was a 7.5% increase in single-family starts to an annualized rate of 401,000, the highest since November. That's still low by historical standards. But home starts have risen steadily since bottoming in January.
"It's really hard for someone to sell a new home," says Patrick Newport, an economist at IHS Global Insight. "You're competing in markets where foreclosed homes are selling at fire-sale prices."
Still, housing investment should start contributing positively to the nation's gross domestic product by the fourth quarter, Newport says.
Much of the May increase in new residential building stemmed from a 62% jump in multifamily starts to 131,000. However, construction of apartments and condominiums reached a record low of 81,000 in April, and May's totals are still well below levels of two months ago. Also, multifamily totals swing wildly and don't reflect a severe slump in that segment, Newport says.
Multifamily building permits, a more reliable indicator, fell 8.3%, the 11th monthly decline in a row. Construction of apartments and condos has been hampered by a credit crisis that has prevented builders from obtaining financing. Wachovia senior economist Mark Vitner also points to "widespread overbuilding of condominiums and town homes and rising vacancy rates for rental apartments."
Single-family-home permits, however, rose 7.9% to a rate of 408,000. Permit totals exceeding starts indicates starts should continue to move upward in coming months. "That's what gives us confidence that a bottom has been reached," Vitner says.
Other economic news Tuesday was less heartening. Industrial production declined a larger-than-expected 1.1% in May, with manufacturing output falling 1%, the Federal Reserve said. Production of motor vehicles plunged 7.9%; consumer goods, 0.8%; construction supply output, 1%; and business equipment, 1.4%.
Meanwhile, producer prices edged up 0.2% in May as surging gasoline prices offset a drop in food prices, the Labor Department said. Core producer prices, excluding food and energy prices, fell 0.1%.
Thursday, June 25, 2009
Thursday, June 18, 2009
Mortgage Rates fall back from 7-month high
Mortgage rates fall back from 7-month high
Associated Press
WASHINGTON — Rates for 30-year home loans fell back this week after soaring to the highest level in seven months a week earlier.
The average rate for a 30-year fixed mortgage was 5.38 percent this week, down from 5.59 percent a week earlier, mortgage company Freddie Mac said.
Rates had risen for three consecutive weeks after yields on long-term government debt, which are closely tied to mortgages rates, had been climbing as investors worried that the huge surplus of government debt hitting the market could trigger inflation.
But data released Wednesday suggested that inflation remains largely in check, and the yield on the 10-year Treasury note has fallen back from an 8-month high of 4.01 percent reached last week.
Though there are signs that the troubled U.S. housing market is beginning to stabilize, higher rates could threaten or slow down any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
The three-week run-up in rates, "is starting to slow homebuyer demand, at least temporarily," Frank Nothaft, Freddie Mac's chief economist, said in a statement.
Mortgage applications for home purchases fell 3.5 percent for the week ending June 12, according to the Mortgage Bankers Association, while refinancing applications were down 23 percent from a week earlier.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage fell to 4.89 percent, down from 5.06 percent last week, according to Freddie Mac.
Rates on five-year adjustable-rate mortgages averaged 4.97 percent, down from 5.17 percent last week. Rates on one-year adjustable-rate mortgages fell to 4.95 percent from 5.04 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages. Fees averaged 0.6 point for five-year and one-year adjustable rate loans.
Associated Press
WASHINGTON — Rates for 30-year home loans fell back this week after soaring to the highest level in seven months a week earlier.
The average rate for a 30-year fixed mortgage was 5.38 percent this week, down from 5.59 percent a week earlier, mortgage company Freddie Mac said.
Rates had risen for three consecutive weeks after yields on long-term government debt, which are closely tied to mortgages rates, had been climbing as investors worried that the huge surplus of government debt hitting the market could trigger inflation.
But data released Wednesday suggested that inflation remains largely in check, and the yield on the 10-year Treasury note has fallen back from an 8-month high of 4.01 percent reached last week.
Though there are signs that the troubled U.S. housing market is beginning to stabilize, higher rates could threaten or slow down any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
The three-week run-up in rates, "is starting to slow homebuyer demand, at least temporarily," Frank Nothaft, Freddie Mac's chief economist, said in a statement.
Mortgage applications for home purchases fell 3.5 percent for the week ending June 12, according to the Mortgage Bankers Association, while refinancing applications were down 23 percent from a week earlier.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage fell to 4.89 percent, down from 5.06 percent last week, according to Freddie Mac.
Rates on five-year adjustable-rate mortgages averaged 4.97 percent, down from 5.17 percent last week. Rates on one-year adjustable-rate mortgages fell to 4.95 percent from 5.04 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages. Fees averaged 0.6 point for five-year and one-year adjustable rate loans.
Tuesday, June 16, 2009
5 Pro Tips Designed to Help you Move
5 Pro Tips Designed to Help You Move
By Nara Schoenberg
RISMEDIA, June 16, 2009-(MCT)-How hard is it to move all your worldly possessions from one home to the next? So hard that even Clive Pearse of HGTV can get it wrong.
“I’m a bit of a hoarder, and-spectacularly-when I moved from England in 1997, I packed up an entire house of rubbish and brought it with me across the Atlantic,” says Pearse, who hosts “Designed To Sell.”
“I should have got rid of it and saved money.”
Also in the bad news column: “The average American will move 12 times in a lifetime. A lot of people feel like they’ve moved 12 times after doing it once.”
But enough with the doom and gloom! Our favorite trans-Atlantic trash-hauler is here with five ways to lighten your load, both literally and figuratively. Or, as he puts it, “A man gives tips after he’s learned the hard way, huh?” Hey, whatever works.
1. Don’t move it if you don’t want it. “People pay a lot of money to move all the clutter they don’t want or need,” Pearse says. Instead, identify the unwanted items and get rid of them in a garage sale. If that’s too much work, consider donating the discards to a charity.
2. Packing material at your disposal. Save money and environmental resources by using free and recyclable packing materials. Many large supermarkets will give away boxes for free. If you have time, start hoarding newspapers and junk mail. Use the newspapers to wrap fragile items. Shred the junk mail to make a great green replacement for bubble wrap.
3. Surf for techno help. Let someone else figure out which cable, telephone and Internet service to get at your new home. “As someone who is terrified of technology, this is my favorite tip,” says Pearse, who recommends a site created by cable companies, Cable Movers Hotline (cablemover.com.) Also available is Movearoo (movearoo.com), a site offered, in part, by telephone companies.
4. Moving advice for your possessions. If you use a professional mover, pick a reputable company by means of a referral rather than an advertisement. And avoid stress by setting aside your precious knickknacks and important paperwork and moving them yourself.
5. Start with a list. Don’t know where to start? “Take a long, hard look at each room very quietly and make a list of what has to go, what has to stay,” what has sentimental value and what doesn’t, Pearse says. Go room by room, item by item. “Once you get going, it’s very easy."
©2009, Chicago Tribune.
Contact Chad at The Hennepin Group to find out how we can help you move!
By Nara Schoenberg
RISMEDIA, June 16, 2009-(MCT)-How hard is it to move all your worldly possessions from one home to the next? So hard that even Clive Pearse of HGTV can get it wrong.
“I’m a bit of a hoarder, and-spectacularly-when I moved from England in 1997, I packed up an entire house of rubbish and brought it with me across the Atlantic,” says Pearse, who hosts “Designed To Sell.”
“I should have got rid of it and saved money.”
Also in the bad news column: “The average American will move 12 times in a lifetime. A lot of people feel like they’ve moved 12 times after doing it once.”
But enough with the doom and gloom! Our favorite trans-Atlantic trash-hauler is here with five ways to lighten your load, both literally and figuratively. Or, as he puts it, “A man gives tips after he’s learned the hard way, huh?” Hey, whatever works.
1. Don’t move it if you don’t want it. “People pay a lot of money to move all the clutter they don’t want or need,” Pearse says. Instead, identify the unwanted items and get rid of them in a garage sale. If that’s too much work, consider donating the discards to a charity.
2. Packing material at your disposal. Save money and environmental resources by using free and recyclable packing materials. Many large supermarkets will give away boxes for free. If you have time, start hoarding newspapers and junk mail. Use the newspapers to wrap fragile items. Shred the junk mail to make a great green replacement for bubble wrap.
3. Surf for techno help. Let someone else figure out which cable, telephone and Internet service to get at your new home. “As someone who is terrified of technology, this is my favorite tip,” says Pearse, who recommends a site created by cable companies, Cable Movers Hotline (cablemover.com.) Also available is Movearoo (movearoo.com), a site offered, in part, by telephone companies.
4. Moving advice for your possessions. If you use a professional mover, pick a reputable company by means of a referral rather than an advertisement. And avoid stress by setting aside your precious knickknacks and important paperwork and moving them yourself.
5. Start with a list. Don’t know where to start? “Take a long, hard look at each room very quietly and make a list of what has to go, what has to stay,” what has sentimental value and what doesn’t, Pearse says. Go room by room, item by item. “Once you get going, it’s very easy."
©2009, Chicago Tribune.
Contact Chad at The Hennepin Group to find out how we can help you move!
Thursday, June 11, 2009
Practicing Good Seller's Etiquette
Practicing good seller's etiquette
Let's face it: When your house goes on the market, you're not only opening the door to prospective buyers, but also sometimes to unknown vendors and naïve or unqualified buyers. As with any business transaction, there is an expected protocol to how sellers, buyers and their respective agents interact. Should you find yourself in a sticky situation, alert your agent so he or she can address and remedy the problem.
The Aggressive Agent
When your agent puts your house on the market, typically all promotional materials state clearly that your agent is the primary contact for buyers and buyers' agents. However, sometimes a buyer's agent will contact a seller directly to try to either win over their business or cut the seller's agent out of the deal. This is not reputable behavior and you should report it to your agent immediately if it happens to you.
The Unscrupulous Vendor
Have you ever started a business or moved into a new house and suddenly found your mailbox full of junk mail? Unfortunately, this also can happen when you put your house on the market. When you sell your home, it necessitates all kinds of new purchasing decisions and less-than-ethical vendors are keenly aware of this. Though MLS organizations enforce rules on how posted information is used, some companies have found ways to cull information from various sources to produce mass mailing lists. If you find yourself regularly emptying your mailbox of junk, let your agent know. He or she can tap the appropriate sources to prompt an investigation into the matter.
The Naïve Buyer
Yard signs, Internet listings and other advertisements can generate a lot of buzz for your home. Some prospective buyers - particularly first-timers - will be so buzzed to see your home that they'll simply drop by. If this happens, no matter how nice these unexpected visitors are, it's best not to humor their enthusiasm by discussing your home or giving an impromptu tour. Instead, politely let them know that your real estate agent is in charge of scheduling tours and provide them with the agent's contact information. If you attempt to handle these surprise visits on your own, you might inadvertently disclose information that could hurt you during negotiations down the road.
Contact the Hennepin Group for an outstanding Real Estate experience!
Let's face it: When your house goes on the market, you're not only opening the door to prospective buyers, but also sometimes to unknown vendors and naïve or unqualified buyers. As with any business transaction, there is an expected protocol to how sellers, buyers and their respective agents interact. Should you find yourself in a sticky situation, alert your agent so he or she can address and remedy the problem.
The Aggressive Agent
When your agent puts your house on the market, typically all promotional materials state clearly that your agent is the primary contact for buyers and buyers' agents. However, sometimes a buyer's agent will contact a seller directly to try to either win over their business or cut the seller's agent out of the deal. This is not reputable behavior and you should report it to your agent immediately if it happens to you.
The Unscrupulous Vendor
Have you ever started a business or moved into a new house and suddenly found your mailbox full of junk mail? Unfortunately, this also can happen when you put your house on the market. When you sell your home, it necessitates all kinds of new purchasing decisions and less-than-ethical vendors are keenly aware of this. Though MLS organizations enforce rules on how posted information is used, some companies have found ways to cull information from various sources to produce mass mailing lists. If you find yourself regularly emptying your mailbox of junk, let your agent know. He or she can tap the appropriate sources to prompt an investigation into the matter.
The Naïve Buyer
Yard signs, Internet listings and other advertisements can generate a lot of buzz for your home. Some prospective buyers - particularly first-timers - will be so buzzed to see your home that they'll simply drop by. If this happens, no matter how nice these unexpected visitors are, it's best not to humor their enthusiasm by discussing your home or giving an impromptu tour. Instead, politely let them know that your real estate agent is in charge of scheduling tours and provide them with the agent's contact information. If you attempt to handle these surprise visits on your own, you might inadvertently disclose information that could hurt you during negotiations down the road.
Contact the Hennepin Group for an outstanding Real Estate experience!
Overlooked Signs the U.S. Housing Marking is Turning
Overlooked Signs the U.S. Housing Market is Turning
By Chris Pummer
RISMEDIA, June 12, 2009-(MCT)-In the Sacramento Delta suburbs east of San Francisco - where home prices soared and fell as viciously as anywhere in the country - a housing market rebound is feverishly under way.
A 1,600-square foot rancher listed for $179,000 - after last selling for $425,000 in 2004 - drew multiple offers last month with a high of $210,000 in cash. The topper: The property was a “short sale” whose owner needs lender approval to sell for less than the mortgage owed-and which buyers wouldn’t touch just three months ago.
“My phone was ringing off the hook, my voice mail was on overload and people were coming into the office receptionist saying they couldn’t reach me,” said Christy Howard, a Coldwell Banker Coon and McCreary agent who listed the Antioch house. “Everyone was waiting for the bottom, and the problem is they waited to long, because the bottom has already come and gone.”
Spurred by markdowns up to 80% from market highs, first-time buyers and investors both American and foreign descended en masse in the last three months on San Francisco’s hardest-hit hinterlands as Wall Street and the economic climate improved. They’re picking clean the Delta region’s banked-owned inventory as soon as properties hit the market and are engaged in unprecedented bidding wars even on short sales.
The panicked buying - fueled by buyers’ fear they’ll miss out on fire-sale prices - belies the doom-and-gloom evoked by recent reports of rising mortgage delinquency rates and foreclosure activity. It is one of several overlooked signs the U.S. housing-market turnaround has started in the nation’s hardest-hit markets, which is critical to driving an overall recovery:
- After spending most of the 1990s in the $250,000 range, the median-priced home that was sold in the seven-county San Francisco area rose to a staggering $850,000 by its May 2007 peak. It since fell to a low of $399,000 in February - a 53% drop in just 21 months - before posting its first monthly gain in March, albeit a 1% uptick. The median is expected to continue rising at a healthy clip in months ahead since it’s now at the level of nine years ago, before the bubble began inflating.
- California’s statewide inventory of unsold homes - based on the number on the market divided by the present monthly sales rate - stood at a 15.2 months supply in February, 2008. That figure was down to 5.8 months in March, near the historic average.
- At roughly 22,000 units, Las Vegas’ inventory is not far off its recent record high. Yet total sales closed in March showed flourishing demand, the fourth best on record. That monthly record - set during the height of the boom - is expected to be broken this summer.
“Things have been looking up but it’s going unnoticed,” says Forrest Barbee, a board member with the Greater Las Vegas Association of Realtors and a broker for Prudential American Group Realtors. “It’s just going to take the data a little longer to catch up with reality.” Listen to one analyst’s thoughts about housing having hit bottom.
Adds Rick Sharga, senior vice president of RealtyTrac, which compiles home sales and foreclosure data: “We’ve overshot the market in places like Las Vegas and Arizona in terms of fair value and buyers are bidding prices up again on many properties. The challenge is going to be whether there is enough financing to eat up the inventory that’s yet to come.”
The specter of rising foreclosures - born now of the recession rather than just overleveraged subprime borrowers - is the wild card in future health of the U.S. housing market and the economy by extension. Read about the difficulty borrowers are having with mortgage modifications.
The number of U.S. homeowners behind on payments or in foreclosure shattered the record in the first quarter, the Mortgage Bankers Association reported last week. Nearly one in eight mortgage holders were either delinquent or in the foreclosure process - and prime mortgages in trouble for the first time outnumbered subprime loans on a percentage basis. Read more on the record jump in foreclosures in the first quarter.
Yet the number of pending sales of existing U.S. homes took a surprising upswing in April, rising 6.7% in the biggest monthly gain in more than seven years, the National Association of Realtors reported Tuesday. That increase lags the 9.2% jump in October 2001, but that spike owed to buyers temporarily putting off home shopping following 9/11. See the latest data on pending home sales.
And in an overlooked report that belies the first-quarter delinquency numbers, defaults on privately insured mortgages - where borrowers are more than 60 days behind - fell 3% in April and were down 24% from a record 106,482 in February, the trade group Mortgage Insurance Companies of America reported Friday.
Most important for gauging the strength of the nationwide market is how conditions are improving in the most-depressed regional markets.
With those markets now stabilizing, banks are no longer anxious to dump real-estate owned properties, as houses in their foreclosure portfolios are called, fearing they’ll get appreciably less three months from now for their foreclosed properties.
As a result, they’ll be more judicious about the pace at which they release foreclosures onto the market. The new goal: To maximize the value of supplies in hand rather than unload it helter-skelter and torpedo the housing market like they did while they were shell-shocked by the devastation they’d wrought.
With the banks themselves now somewhat more stable, they’ll also be less likely to want to part with their “toxic assets” knowing the most-scorched, still-serviceable mortgages will be the most valuable on a credit-risk markup once the economy recovers. In fact, the price stabilization in the most-depressed U.S. markets will allow a clearer valuation of the toxic assets we now all hold by virtue of bank bailouts - a modicum of certainty that will hasten the overall recovery.
Homeowners in most of America know by their own property’s value that the spike in U.S. median home values was driven in considerable measure by soaring prices and volume in major markets, especially in California, Florida, Nevada and Arizona. By virtue of their climates and economic-growth rates, those four states have been on the extremes of the U.S. boom-and-bust housing cycle since the 1950s.
You can’t discount how critical an upturn in those states will be, considering they account for 46% of foreclosures nationwide. If foreclosures there are more quickly consumed as they’re starting to be now - fueled in part by foreign buyers who recognize their value - we’ll all reap a return on our bailout money a lot faster.
“The banks are getting smarter and realizing that if they don’t sell it in a short sale, they lose more money going the foreclosure route,” Barbee said.
Adds Sharga: “The banks will be very particular and thoughtful about how they’ll release new foreclosures, because they know now how flooding the market will have a disastrous effect.”
That, and if the chastened lenders would just swallow crow and pony up for rights to an encouraging Beatles song to play on their delinquent-payers’ hold line: “We can work it out.”
©2009, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services.
By Chris Pummer
RISMEDIA, June 12, 2009-(MCT)-In the Sacramento Delta suburbs east of San Francisco - where home prices soared and fell as viciously as anywhere in the country - a housing market rebound is feverishly under way.
A 1,600-square foot rancher listed for $179,000 - after last selling for $425,000 in 2004 - drew multiple offers last month with a high of $210,000 in cash. The topper: The property was a “short sale” whose owner needs lender approval to sell for less than the mortgage owed-and which buyers wouldn’t touch just three months ago.
“My phone was ringing off the hook, my voice mail was on overload and people were coming into the office receptionist saying they couldn’t reach me,” said Christy Howard, a Coldwell Banker Coon and McCreary agent who listed the Antioch house. “Everyone was waiting for the bottom, and the problem is they waited to long, because the bottom has already come and gone.”
Spurred by markdowns up to 80% from market highs, first-time buyers and investors both American and foreign descended en masse in the last three months on San Francisco’s hardest-hit hinterlands as Wall Street and the economic climate improved. They’re picking clean the Delta region’s banked-owned inventory as soon as properties hit the market and are engaged in unprecedented bidding wars even on short sales.
The panicked buying - fueled by buyers’ fear they’ll miss out on fire-sale prices - belies the doom-and-gloom evoked by recent reports of rising mortgage delinquency rates and foreclosure activity. It is one of several overlooked signs the U.S. housing-market turnaround has started in the nation’s hardest-hit markets, which is critical to driving an overall recovery:
- After spending most of the 1990s in the $250,000 range, the median-priced home that was sold in the seven-county San Francisco area rose to a staggering $850,000 by its May 2007 peak. It since fell to a low of $399,000 in February - a 53% drop in just 21 months - before posting its first monthly gain in March, albeit a 1% uptick. The median is expected to continue rising at a healthy clip in months ahead since it’s now at the level of nine years ago, before the bubble began inflating.
- California’s statewide inventory of unsold homes - based on the number on the market divided by the present monthly sales rate - stood at a 15.2 months supply in February, 2008. That figure was down to 5.8 months in March, near the historic average.
- At roughly 22,000 units, Las Vegas’ inventory is not far off its recent record high. Yet total sales closed in March showed flourishing demand, the fourth best on record. That monthly record - set during the height of the boom - is expected to be broken this summer.
“Things have been looking up but it’s going unnoticed,” says Forrest Barbee, a board member with the Greater Las Vegas Association of Realtors and a broker for Prudential American Group Realtors. “It’s just going to take the data a little longer to catch up with reality.” Listen to one analyst’s thoughts about housing having hit bottom.
Adds Rick Sharga, senior vice president of RealtyTrac, which compiles home sales and foreclosure data: “We’ve overshot the market in places like Las Vegas and Arizona in terms of fair value and buyers are bidding prices up again on many properties. The challenge is going to be whether there is enough financing to eat up the inventory that’s yet to come.”
The specter of rising foreclosures - born now of the recession rather than just overleveraged subprime borrowers - is the wild card in future health of the U.S. housing market and the economy by extension. Read about the difficulty borrowers are having with mortgage modifications.
The number of U.S. homeowners behind on payments or in foreclosure shattered the record in the first quarter, the Mortgage Bankers Association reported last week. Nearly one in eight mortgage holders were either delinquent or in the foreclosure process - and prime mortgages in trouble for the first time outnumbered subprime loans on a percentage basis. Read more on the record jump in foreclosures in the first quarter.
Yet the number of pending sales of existing U.S. homes took a surprising upswing in April, rising 6.7% in the biggest monthly gain in more than seven years, the National Association of Realtors reported Tuesday. That increase lags the 9.2% jump in October 2001, but that spike owed to buyers temporarily putting off home shopping following 9/11. See the latest data on pending home sales.
And in an overlooked report that belies the first-quarter delinquency numbers, defaults on privately insured mortgages - where borrowers are more than 60 days behind - fell 3% in April and were down 24% from a record 106,482 in February, the trade group Mortgage Insurance Companies of America reported Friday.
Most important for gauging the strength of the nationwide market is how conditions are improving in the most-depressed regional markets.
With those markets now stabilizing, banks are no longer anxious to dump real-estate owned properties, as houses in their foreclosure portfolios are called, fearing they’ll get appreciably less three months from now for their foreclosed properties.
As a result, they’ll be more judicious about the pace at which they release foreclosures onto the market. The new goal: To maximize the value of supplies in hand rather than unload it helter-skelter and torpedo the housing market like they did while they were shell-shocked by the devastation they’d wrought.
With the banks themselves now somewhat more stable, they’ll also be less likely to want to part with their “toxic assets” knowing the most-scorched, still-serviceable mortgages will be the most valuable on a credit-risk markup once the economy recovers. In fact, the price stabilization in the most-depressed U.S. markets will allow a clearer valuation of the toxic assets we now all hold by virtue of bank bailouts - a modicum of certainty that will hasten the overall recovery.
Homeowners in most of America know by their own property’s value that the spike in U.S. median home values was driven in considerable measure by soaring prices and volume in major markets, especially in California, Florida, Nevada and Arizona. By virtue of their climates and economic-growth rates, those four states have been on the extremes of the U.S. boom-and-bust housing cycle since the 1950s.
You can’t discount how critical an upturn in those states will be, considering they account for 46% of foreclosures nationwide. If foreclosures there are more quickly consumed as they’re starting to be now - fueled in part by foreign buyers who recognize their value - we’ll all reap a return on our bailout money a lot faster.
“The banks are getting smarter and realizing that if they don’t sell it in a short sale, they lose more money going the foreclosure route,” Barbee said.
Adds Sharga: “The banks will be very particular and thoughtful about how they’ll release new foreclosures, because they know now how flooding the market will have a disastrous effect.”
That, and if the chastened lenders would just swallow crow and pony up for rights to an encouraging Beatles song to play on their delinquent-payers’ hold line: “We can work it out.”
©2009, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services.
Monday, June 8, 2009
10 Ways to Make a Foreclosure as Resalable as Possible
If you have been searching for a new home or a potential investment property in the last year I am sure you have come across a home that was destroyed for the most part. Welcome to the wonderful world of Forclosure Properties. The following article give tips and advice on how to quickly fix up that forclosure so you can maximize your ROI on the property! ..enjoy :)
10 Ways to Make a Foreclosure as Resalable as Possible…as Soon as Possible
By Maria Patterson
RISMEDIA, June 9, 2009-While the real estate market continues to correct, buyers are confronted with an increasing number of opportunities. And for those Realtors who see it, there is opportunity for them as well-as long as they are prepared to do a little bit of work getting the property ready for resale.
While a bleak picture for many, foreclosure properties represent a once-in-a-lifetime chance for many first-time home buyers, a way for move-up buyers to get the bigger house they need, and a way for second-home buyers to secure the vacation home they’ve always dreamed of.
Getting a foreclosure property ready, however, means that the Realtor must be prepared-both mentally and financially-to take on home improvements and repairs.
For this, Lowe’s has committed, trained product specialists who are available to walk home buyers-and even their Realtors-through the home improvement process. From flooring to paint-and everything in between, no matter what the size of the project-Lowe’s can help. Following are 10 ways to make a foreclosure as resalable as possible…as soon as possible.
1. Exterior Paint. Peeling paint is one of the most common problems associated with foreclosure properties. Refreshing the exterior paint is a priority to begin attracting the interest of renters and buyers while you continue to work on repairs internally. Dark colors fade faster than light colors and absorb heat-something to consider in warmer climates. Light, neutral colors are your best bet for resale purposes or, if you are renting or selling in a vacation area, consider colors that complement the area, such as light or bright colors near the shore and earth tones in the mountains.
2. Electrical Work. Electrical safety is critical in the resale or rental of a property. Consult a licensed electrician to perform repairs or improvements. Consider installing safety products such as GFCI outlets and AFCIs. GFCI outlets automatically cut power if a ground fault occurs, meaning they will save your life if you somehow end up on the receiving end of an electric current. AFCIs are another safety measure that you install into the wiring itself. They detect arc faults that are a common cause of electrical fires, and break the circuit before fire breaks out.
3. HVAC Repairs. Consult an HVAC contractor to make sure air-conditioning systems are in good working order, a must for any prospective buyer or renter. Make sure the air-conditioning unit is working at optimal efficiency, as this will translate into savings on monthly utility bills.
4. Plumbing. Make sure all leaky faucets are repaired and parts, such as worn washers, springs and “o” rings, replaced. Then check to see if water flow is at all hindered in the property. A stopped drain in a bathroom or kitchen sink plumbing system is often the result of a clogged pipe. First, try chemical drain cleaners, then remove the elbow piping if necessary, to further investigate the clog.
5. Landscaping. Foreclosure properties often fall victim to overgrown lawns, shrubs and weeds. Start by mowing and pruning, and then address more serious issues, such as dead tree branches that could land on the home or power lines. An easy way to provide a clean and updated look to the landscaping-and add curb appeal to the property-is to edge the borders. Consider wood edging, brick or stone edging, metal edging or plastic edging.
6. Pests. Many abandoned properties develop pest problems due to stagnant water and general lack of upkeep. Immediately empty all stagnant water, find the source of any moisture that might be in the home and use over-the-counter repellants to rid the home of small pest problems. Hire a professional for any pest problems that are more serious.
7. Windows and Doors. Unfortunately, many foreclosure homes fall victim to vandalism. This can result in broken doors and smashed windows. Replacing doors and windows must be doneimmediately.
8. Floors and Stairways. Rotting wood in floors, doors, staircases and railings, a common issue found in foreclosure properties, must also be addressed immediately. Rot sometimes occurs in areas that are not visible to home inspectors, so this job may require the consultation of an expert in the area.
9. Interior Walls. Ripped wallpaper and chipped paint are not uncommon in foreclosure properties. Take down all wallpaper and repaint the interior in one or a series of neutral colors. This will make the home appeal to a broad spectrum of renters or buyers; using bright, unusual or darker colors narrows the pool of interested parties.
10. Appliances. Any home that goes on the market for sale or rental will fare much better with updated appliances. Many buyers, in fact, have come to expect this in today’s competitive real estate market. Foreclosure properties in affluent and/or resort areas may already have updated, high-end appliances. Properties in other areas will most likely be in need of new appliances.
Source: RealtyTrac
10 Ways to Make a Foreclosure as Resalable as Possible…as Soon as Possible
By Maria Patterson
RISMEDIA, June 9, 2009-While the real estate market continues to correct, buyers are confronted with an increasing number of opportunities. And for those Realtors who see it, there is opportunity for them as well-as long as they are prepared to do a little bit of work getting the property ready for resale.
While a bleak picture for many, foreclosure properties represent a once-in-a-lifetime chance for many first-time home buyers, a way for move-up buyers to get the bigger house they need, and a way for second-home buyers to secure the vacation home they’ve always dreamed of.
Getting a foreclosure property ready, however, means that the Realtor must be prepared-both mentally and financially-to take on home improvements and repairs.
For this, Lowe’s has committed, trained product specialists who are available to walk home buyers-and even their Realtors-through the home improvement process. From flooring to paint-and everything in between, no matter what the size of the project-Lowe’s can help. Following are 10 ways to make a foreclosure as resalable as possible…as soon as possible.
1. Exterior Paint. Peeling paint is one of the most common problems associated with foreclosure properties. Refreshing the exterior paint is a priority to begin attracting the interest of renters and buyers while you continue to work on repairs internally. Dark colors fade faster than light colors and absorb heat-something to consider in warmer climates. Light, neutral colors are your best bet for resale purposes or, if you are renting or selling in a vacation area, consider colors that complement the area, such as light or bright colors near the shore and earth tones in the mountains.
2. Electrical Work. Electrical safety is critical in the resale or rental of a property. Consult a licensed electrician to perform repairs or improvements. Consider installing safety products such as GFCI outlets and AFCIs. GFCI outlets automatically cut power if a ground fault occurs, meaning they will save your life if you somehow end up on the receiving end of an electric current. AFCIs are another safety measure that you install into the wiring itself. They detect arc faults that are a common cause of electrical fires, and break the circuit before fire breaks out.
3. HVAC Repairs. Consult an HVAC contractor to make sure air-conditioning systems are in good working order, a must for any prospective buyer or renter. Make sure the air-conditioning unit is working at optimal efficiency, as this will translate into savings on monthly utility bills.
4. Plumbing. Make sure all leaky faucets are repaired and parts, such as worn washers, springs and “o” rings, replaced. Then check to see if water flow is at all hindered in the property. A stopped drain in a bathroom or kitchen sink plumbing system is often the result of a clogged pipe. First, try chemical drain cleaners, then remove the elbow piping if necessary, to further investigate the clog.
5. Landscaping. Foreclosure properties often fall victim to overgrown lawns, shrubs and weeds. Start by mowing and pruning, and then address more serious issues, such as dead tree branches that could land on the home or power lines. An easy way to provide a clean and updated look to the landscaping-and add curb appeal to the property-is to edge the borders. Consider wood edging, brick or stone edging, metal edging or plastic edging.
6. Pests. Many abandoned properties develop pest problems due to stagnant water and general lack of upkeep. Immediately empty all stagnant water, find the source of any moisture that might be in the home and use over-the-counter repellants to rid the home of small pest problems. Hire a professional for any pest problems that are more serious.
7. Windows and Doors. Unfortunately, many foreclosure homes fall victim to vandalism. This can result in broken doors and smashed windows. Replacing doors and windows must be doneimmediately.
8. Floors and Stairways. Rotting wood in floors, doors, staircases and railings, a common issue found in foreclosure properties, must also be addressed immediately. Rot sometimes occurs in areas that are not visible to home inspectors, so this job may require the consultation of an expert in the area.
9. Interior Walls. Ripped wallpaper and chipped paint are not uncommon in foreclosure properties. Take down all wallpaper and repaint the interior in one or a series of neutral colors. This will make the home appeal to a broad spectrum of renters or buyers; using bright, unusual or darker colors narrows the pool of interested parties.
10. Appliances. Any home that goes on the market for sale or rental will fare much better with updated appliances. Many buyers, in fact, have come to expect this in today’s competitive real estate market. Foreclosure properties in affluent and/or resort areas may already have updated, high-end appliances. Properties in other areas will most likely be in need of new appliances.
Source: RealtyTrac
Friday, June 5, 2009
Save my Lawn, It's Brown!
Save my Lawn, It's Brown!
We are in the middle of a very dry month and several cities in the metro area have begun to enforced water restrictions (in the land of 10,000 Lakes). If you're like me and don't have a sprinkler system your lawn has probably turned a nice shade of brown. grrrrr.....
So needless to say I have spent the better part of the last two morning watering my lawn, walking outside every 30min to adjust were the sprinkler is spraying.
As you can see below it doesn't look like rain any time soon. So it looks like the water bill will continue to rise. :(
Severe drought
Chris Shaffer, WCCO Meteorologist
It is still very early in June and we are talking about drought conditions. The western Twin Cities are suffering through a moderate drought while the conditions are severe from the eastern metro into western Wisconsin.
We have only been misted by .03" of rain over the past 12 days with only .20" falling over the past 27 days. We will not feel any relief Friday as we warm to 74 degrees and watch the clouds increase throughout the day. You will notice the wind picking up from the northwest 10-15 mph.
The rain arrives Saturday and the cool air settles in for the weekend. Our highs will only be in the low 60s both days. We will have showers Saturday with a few more scattered showers on Sunday. The best chance of rain arrives late Sunday into Monday. We could tap a fair amount of rainfall and the good news is we don't expect any severe weather.
Just a cool, wet weekend that should do wonders for our yards, flowers, crops, etc. It's bad timing for graduation parties and weddings, but just what our parched soil needs. We do stay cool into next week with more rain expected by next Thursday or Friday.
We are in the middle of a very dry month and several cities in the metro area have begun to enforced water restrictions (in the land of 10,000 Lakes). If you're like me and don't have a sprinkler system your lawn has probably turned a nice shade of brown. grrrrr.....
So needless to say I have spent the better part of the last two morning watering my lawn, walking outside every 30min to adjust were the sprinkler is spraying.
As you can see below it doesn't look like rain any time soon. So it looks like the water bill will continue to rise. :(
Severe drought
Chris Shaffer, WCCO Meteorologist
It is still very early in June and we are talking about drought conditions. The western Twin Cities are suffering through a moderate drought while the conditions are severe from the eastern metro into western Wisconsin.
We have only been misted by .03" of rain over the past 12 days with only .20" falling over the past 27 days. We will not feel any relief Friday as we warm to 74 degrees and watch the clouds increase throughout the day. You will notice the wind picking up from the northwest 10-15 mph.
The rain arrives Saturday and the cool air settles in for the weekend. Our highs will only be in the low 60s both days. We will have showers Saturday with a few more scattered showers on Sunday. The best chance of rain arrives late Sunday into Monday. We could tap a fair amount of rainfall and the good news is we don't expect any severe weather.
Just a cool, wet weekend that should do wonders for our yards, flowers, crops, etc. It's bad timing for graduation parties and weddings, but just what our parched soil needs. We do stay cool into next week with more rain expected by next Thursday or Friday.
Thursday, June 4, 2009
Time to buy in Lowertown, St Paul?
Is it time to buy in Lowertown? With the Central Corridor LTR coming and now the Depot getting ready to become the hub for mass transit in the Twin Cities it may be?
Ramsey County will take over the Union Depot with the goal of turning it into a regional transit hub by 2012.
By CHRIS HAVENS, Star Tribune
The Ramsey County Board, acting as the Regional Rail Authority, on Tuesday approved the purchase of the main building of the Union Depot in downtown St. Paul as part of its quest to turn the area into a regional transit hub.
Commissioners voted 6-0 to pay $8.1 million for the property. Closing is set for Thursday.
The three-story, 188,000-square-foot building, known as the head house, has "good bones" but will need about $350,000 worth of repairs soon, according to a county study. Those would include fixing concrete sidewalks and curbs, roof repairs and electrical updates. The county plans to open the building as a transit hub in 2012.
The county will take over the leases of the 265-space parking facility and Christos Greek Restaurant, which will continue to host events and operate as usual.
It did not buy the condos.
Jolly Mangine, the county's property management director, said that aside from the money needed for repairs, the building will pay for its operations. "You'll take in more revenue than you expend," Mangine told commissioners.
That said, he suggested the county wait on trying to lure new tenants to the building until after a master plan is completed.
Commissioner Jan Parker said it's important to include retail in the planning because the building needs to have a critical mass of restaurants and shops, not just transit.
Rail Authority Chairman Jim McDonough said the top priority is to get Amtrak and bus lines on board.
Purchase of the block-long building facing 4th Street, between Wacouta and Sibley streets, comes a year after the county agreed to pay $49.6 million for the depot's rear concourse and 9 acres of adjacent land.
The county has long envisioned the Union Depot's return as a regional transportation hub -- this time with rail, buses, bicycles and taxis.
Current plans call for the last stop of the Central Corridor light-rail line to be in front of the Union Depot, although county commissioners would like to see the line extended to the rear concourse.
The neoclassical Union Depot was built between 1918 and 1923 on the site of an earlier train station that burned in 1915. During its heyday, the depot had nine railroads operating, with more than 20 million pieces of mail passing through the station annually. At its peak, 280 passenger trains rumbled through each day.
The last train rolled out on April 30, 1971.
It was placed on the National Register of Historic Places in 1974 and, because of that, any future exterior work must be approved by the St. Paul Heritage Preservation Committee.
Investors have had their ups and downs with the building over recent decades, and the county is hopeful that it can restore Union Depot to its past luster.
"This is going to be something that we will be very proud of, that Minnesota will be very proud of," said Commissioner Victoria Reinhardt.
from the Startribune.com
Ramsey County will take over the Union Depot with the goal of turning it into a regional transit hub by 2012.
By CHRIS HAVENS, Star Tribune
The Ramsey County Board, acting as the Regional Rail Authority, on Tuesday approved the purchase of the main building of the Union Depot in downtown St. Paul as part of its quest to turn the area into a regional transit hub.
Commissioners voted 6-0 to pay $8.1 million for the property. Closing is set for Thursday.
The three-story, 188,000-square-foot building, known as the head house, has "good bones" but will need about $350,000 worth of repairs soon, according to a county study. Those would include fixing concrete sidewalks and curbs, roof repairs and electrical updates. The county plans to open the building as a transit hub in 2012.
The county will take over the leases of the 265-space parking facility and Christos Greek Restaurant, which will continue to host events and operate as usual.
It did not buy the condos.
Jolly Mangine, the county's property management director, said that aside from the money needed for repairs, the building will pay for its operations. "You'll take in more revenue than you expend," Mangine told commissioners.
That said, he suggested the county wait on trying to lure new tenants to the building until after a master plan is completed.
Commissioner Jan Parker said it's important to include retail in the planning because the building needs to have a critical mass of restaurants and shops, not just transit.
Rail Authority Chairman Jim McDonough said the top priority is to get Amtrak and bus lines on board.
Purchase of the block-long building facing 4th Street, between Wacouta and Sibley streets, comes a year after the county agreed to pay $49.6 million for the depot's rear concourse and 9 acres of adjacent land.
The county has long envisioned the Union Depot's return as a regional transportation hub -- this time with rail, buses, bicycles and taxis.
Current plans call for the last stop of the Central Corridor light-rail line to be in front of the Union Depot, although county commissioners would like to see the line extended to the rear concourse.
The neoclassical Union Depot was built between 1918 and 1923 on the site of an earlier train station that burned in 1915. During its heyday, the depot had nine railroads operating, with more than 20 million pieces of mail passing through the station annually. At its peak, 280 passenger trains rumbled through each day.
The last train rolled out on April 30, 1971.
It was placed on the National Register of Historic Places in 1974 and, because of that, any future exterior work must be approved by the St. Paul Heritage Preservation Committee.
Investors have had their ups and downs with the building over recent decades, and the county is hopeful that it can restore Union Depot to its past luster.
"This is going to be something that we will be very proud of, that Minnesota will be very proud of," said Commissioner Victoria Reinhardt.
from the Startribune.com
Why is The Hennepin Group different?
A home is not a home because of its room dimensions or the color of the walls. It is about how you feel when you walk through the front door. And the way you can instantly envision your life unfolding there.
This is about more than real estate. It is about your life and your dreams.
Different by design
The Hennepin Group takes a different approach to real estate, one that is built on personal touches, win-win deals and positive results. The Hennepin Group utilizes the latest technologies, market research and business strategies to exceed your expectations. More importantly, we listen and that means we find solutions that are tailored to you.
How we can help
Thanks for starting your real estate search with us. This website is full of information for you whether you are looking to buy or sell.
After you have had the chance to review this information, contact us so we can tell you more about how we can help.
We appreciate the opportunity to earn your business.
This is about more than real estate. It is about your life and your dreams.
Different by design
The Hennepin Group takes a different approach to real estate, one that is built on personal touches, win-win deals and positive results. The Hennepin Group utilizes the latest technologies, market research and business strategies to exceed your expectations. More importantly, we listen and that means we find solutions that are tailored to you.
How we can help
Thanks for starting your real estate search with us. This website is full of information for you whether you are looking to buy or sell.
After you have had the chance to review this information, contact us so we can tell you more about how we can help.
We appreciate the opportunity to earn your business.
Pending Home Sales Up for Three Months in a Row
Pending Home Sales Up for Three Months in a Row
RISMEDIA, June 2, 2009-Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7% to 90.3 from a reading of 84.6 in March, and is 3.2% above April 2008 when it was 87.5.
Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
The Pending Home Sales Index in the Northeast shot up 32.6% to 78.9 in April and is 0.8% above a year ago. In the Midwest the index rose 9.8% to 90.4 and is 11.1% above April 2008. The index in the South slipped 0.2% to 93.0 in April but is 3.5% higher than a year ago. In the West the index rose 1.8% to 94.8 but is 2.9% below April 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.
“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger downpayment. Buyers who are wondering about their options should contact a Realtor®, who can advise consumers on the housing assistance programs and resources available in a given area.”
NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.
A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”
The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.
RISMEDIA, June 2, 2009-Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7% to 90.3 from a reading of 84.6 in March, and is 3.2% above April 2008 when it was 87.5.
Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
The Pending Home Sales Index in the Northeast shot up 32.6% to 78.9 in April and is 0.8% above a year ago. In the Midwest the index rose 9.8% to 90.4 and is 11.1% above April 2008. The index in the South slipped 0.2% to 93.0 in April but is 3.5% higher than a year ago. In the West the index rose 1.8% to 94.8 but is 2.9% below April 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.
“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger downpayment. Buyers who are wondering about their options should contact a Realtor®, who can advise consumers on the housing assistance programs and resources available in a given area.”
NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.
A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”
The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.
First-time Home Buyers Grabbing Houses and Tax Credit
First-time Home Buyers Grabbing Houses and Tax Credit
By Kevin Collison
RISMEDIA, June 4, 2009-(MCT)-Generation Y is getting jazzed about a new $8,000 federal tax credit for first-time home buyers-jumping at the opportunity to move up and out of their rentals.
“The last 90 days I’ve seen it go crazy,” Kevin Foster, a real estate agent with Reece & Nichols in Lee’s Summit, said Tuesday. “Every conference room has been full with agents working on offers, and many are people in their 20s.”
Peter Abbey, 26, and his girlfriend, Abigail Barnett, 27, were among them.
Abbey, bar manager at Avenue Bistro in Kansas City, and Barnett, a hospital administrative assistant, had been saving to buy a house the past couple of years but weren’t quite there yet. Until Congress approved the expanded tax credit in February.
Now they’re leaving their rented home in the city for their own place in Roeland Park.
“We were saving money and waiting for the right time, and that definitely helped give us a push,” Abbey said. “We were able to buy a little bit earlier because of the government tax credit.”
The Kansas City Regional Association of Realtors said April sales of new and existing homes were up 10% from March, with almost 2,500 homes sold.“We’re seeing a lot of first-time buyers back in the market again,” said Chris Collins of Keller-Williams and president of the association. “The tax credit along with historically low mortgage rates is affecting the market.”
The tax credit was part of President Barack Obama’s $787 billion American Recovery and Reinvestment Act. It’s available to people buying their first home in 2009 as long as the purchase is completed by Dec. 1.
Because of the one- to two-month lag between a contract and a done deal, many home buyers are making offers on homes now.
As opposed to a $7,500 tax credit available in 2008, the latest incentive doesn’t have to be repaid if the taxpayer remains in the home for at least three years.
At the national level, a report Tuesday said pending home sales in April were up 6.7% from March, the biggest monthly increase since October 2001, according to a seasonally adjusted index of sales contracts kept by the National Association of Realtors.
“We expect greater activity in the months ahead,” Lawrence Yun, the Realtors’ chief economist, said in a statement Tuesday.
Although economists are encouraged by signs that demand for housing is returning, the outlook is far from sunny. Mortgage rates are rising, making homes less affordable for many borrowers.
The average rate for a 30-year, fixed-rate mortgage is about 5.3% this week compared with about 5% last week, according to Bank-rate.com.The health of the U.S. housing market, mired in a three-year slump, is one of the key issues facing the economy. Though sales may be recovering, analysts cautioned that prices will take longer to stabilize because of the glut of unsold properties. Prices are unlikely to rise until foreclosures start declining, and that’s unlikely to happen before the end next year.
The national median sales price in April plunged more than 15% from year-ago levels to $170,200, driven by sales of inexpensive foreclosures and other distressed low-end properties.
That was the second-largest yearly price drop on record, according to the national Realtors’ group.
But Jeff McCalmon of Suburban Financial/Tightwad Bank said the tax credit is getting the desired results.
“It’s jump-starting the market because it gets started with first-time buyers and then other people move up,” said McCalmon, who worked with Abbey and Barnett on obtaining their loan.
Shelley R. Denman, past president of the Mortgage Bankers Association of Greater Kansas City, said loan activity is on an upswing with about 50% coming from first-time buyers.
Her bank, Peoples Bank of Overland Park, has just completed the best three months since 2003.
“Ever since that (tax incentive) came out, we’ve seen a massive increase in first-time homebuyers,” she said.
Kalie George is using the tax credit to help her buy a 1930s bungalow in Kansas City, Kan. She’s getting a great price as well, $34,000, because the house was in foreclosure.
“I’m 22 and a first-time buyer,” she said. “It definitely made it more feasible to make things happen.”
Tax Credit Details:
- First-time home buyers can claim 10% of the home’s purchase price on their tax return-up to $8,000, or $4,000 if married filing jointly.- The home must be purchased by Dec. 1.- The credit doesn’t have to be repaid if the buyer lives in the home for 36 months after the purchase date.- The Federal Housing Administration last week released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don’t have to wait to get the money from the Internal Revenue Service.
The Associated Press contributed to this report.
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