December 20, 2010
By
Ann Newman
Nearly eight out of 10 respondents believe buying a home is a good financial decision, despite ongoing challenges with the economy and housing market. That’s according to the 2010 National Housing Pulse Survey, an annual report released by the National Association of Realtors.
The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70% of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to home-ownership.
Despite economic uncertainty, 68% of those surveyed still believe now is a good time to buy a home; while that number is down from last year (75%), it’s up from 2008 (66%) and 2007 (59%). Lower home prices and record-low mortgage interest rates may be attracting buyers to the housing market—more than one-fourth of renters said they are thinking more about buying a home than they were a year ago. Sixty-three percent of renter respondents said that owning a home is a priority in their future, and nearly 40% said it was one of their highest priorities.
Lower home prices have improved affordability. In fact, the percentage of renters who are worried that the cost of housing is getting so unaffordable that they will never be able to buy a home has decreased steadily since 2007, from 63% to 57%.
The good news is that Americans are seeing more stability in the real estate market. Nearly seven out of 10 believe that home values have stabilized in their area; the same number expects home sales to remain about the same through the end of the year.
While nearly seven out of 10 say it’s harder to sell a home in their area today than it was a year ago, it’s less of a concern from last year when the number was 10 percentage points higher. This is most likely the result of lower home inventories.
October 20, 2010
By
Greg Cepek
As we’ve all seen, mortgage interest rates remain at or near all time lows. While it’s normal for everyone to want the lowest rate we all need to remember they have the potential to shoot back up, typically at a much faster pace, than they trickle down. Most lenders offer borrowers the option to “lock” in the interest rate once a purchase agreement is in place which secures that rate during the time it takes the loan to process. The other option borrowers have is to “float” the rate, meaning the processing of the loan begins but the rate might be higher or lower when the customer finally decides to lock it in.
I always recommend my clients lock their rate once the contract is in place. I’ve seen too many times over the years where a borrower decides to float it and then within a few days or weeks the rate is much higher than where it was originally. It’s always better to settle for a great rate, as they are today, even if they go down slightly after you lock it in than to be stuck with a much higher rate you will be stuck with for the next 30 years if they shoot up as you are floating the rate.
October 15, 2010
By
Ann Newman
According to the National Association of Realtors (NAR), in 2009, a record 47% of homes sold were purchased by first-time buyers. A professional home inspection not only educates buyers on the condition of the home but can minimize costly surprises down the road.
1. Inspect the Inspector. Only hire a home inspector with an excellent reputation and credentials. Ask how long the company has been in business, and verify the inspector carries professional liability insurance also known as “Errors & Omissions” (E&O).
2. Ask for a sample of a report. The quality of the final inspection report will be important. Make sure the reports are prepared with clear pictures and concise details addressing all the various systems and accessible elements of the home.
3. Inspect ancillary systems. It’s hard for first-time home buyers to know what they need, so be sure to ask what additional services the company offers. Generally, the company will offer you a multiple services discount as well as the added convenience of only having to attend one inspection appointment. Other common services offered by home inspectors are termite inspections, mold screening, water testing and radon testing.
4. Go along on the inspection. Ask the inspection company if they encourage buyers to tag along on the inspection. If the inspector discourages you from going along and asking questions, find another inspector. In addition to documenting issues and needed repairs that may exist, a professional home inspector will also show the new buyer how to operate the various systems in the home and provide tips on improving energy efficiency and maintaining the home in general.
October 14, 2010
By
Dick Baker
It’s hard to open a newspaper lately without seeing something about foreclosures. Nevertheless it’s hard to make sense of the situation and what it means to the Toledo real estate market.
In September and October, several lenders halted foreclosure actions in dozens of states due to questions about whether they were being done in compliance with state laws. According to the National Association of Realtors, we have no way of knowing at this time how many of the foreclosures have been taken back inappropriately. While this mess should ultimately be sorted out, quite frankly this situation is creating even more problems in an already struggling marketplace and no doubt stalling a real estate recovery. Many pending transactions have been put on hold or even cancelled, while other properties currently for sale may be nearly impossible to sell due to title questions.
If there is a silver lining to the current mess, it may be that banks should have more incentive to modify loans for those currently struggling and facing foreclosures, or they may expedite more short sales in an effort to reduce inventory.
In this writer’s opinion, the foreclosure situation is becoming an epidemic, but current actions by Fannie Mea and Freddie Mac may not be the right elixir.
October 6, 2010
By
Emily Yerkes
So, all that we have been hearing lately is how terrible the market has been doing and how foreclosures are rising. While it hasn’t gotten much publicity, the Federal Reserve’s latest “flow of funds” statistical report on the nation’s finances found that homeowners’ net equity holdings have increased by 17.1% from the first quarter of 2009 through the second quarter of 2010, ending last June 30.
How is this possible? Home prices may be up modestly in some parts of the country over that period of time – even double digits in a handful of the most volatile markets. However those percentage gains are being measured against the shell-shocked lows of late 2008 and early 2009. Statistically, even the slightest increase in depressed median prices can look impressive.
So why doesn’t it seem like our own personal equity holdings have done this well? The simple answer is the Fed’s rising equity finding is mainly good news for residential real estate; however the increase is not attributable solely to positive events. The Fed makes its’ basic calculation the same way homeowners would: You subtract your total mortgage debt from the estimated market value of your home; the remainder (if you have one) is your net equity. The Fed has access to information about mortgage debt holding of banks and non-bank lenders, and uses a variety of governmental and private real estate data sources to obtain their quarterly values across the country.
There is no dispute that a 17% increase is a move in the right direction at the very least. Values of homes are no longer on the downgrade nationwide and household debt loads are decreasing. None of this necessarily helps the people still stuck with homes that are underwater or those who have lost their homes to foreclosures. But for everyone else that cares about real estate, the latest Fed numbers suggest that the equity crash is over and a rebuilding with smarter credit habits is underway.
September 28, 2010
By
Ann Newman
In an effort to help underwater homeowners who owe more on their mortgage than the value of their property the department of HUD is adjusting their refinance program. In short if a borrower is current on their mortgage and does not currently have an FHA mortgage, they can ask that their current lender write off at least 10% of the unpaid balance to qualify for a new FHA mortgage.
FHA Commissioner David H Stevens stated:
“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined. This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”
To facilitate the program, the US Department of Treasury will be providing incentives to those who have an existing second lien who agree to reduce or eliminate their liens.
For more information about the program, visit here.
September 16, 2010
By
Dick Baker
If not, you probably haven’t been paying attention for the last few years. But that can be said about virtually ALL real estate markets. The values of your home and mine here in Toledo, Ohio, have declined in recent years, but hasn’t that been the case with everyone’s 401(k) as well? My own opinion (which is worth what you’re paying for it) is that it would be a great mistake to look at housing primarily as an investment. Our homes were never intended to be piggy banks from which we could periodically extract some equity to spend on lavish items.
So why should we be bullish on housing? Lots of reasons. Most basically, our homes are our shelter, and that has great value. You can’t live in your stock portfolio. Others pay rent for their shelter, and their rent is gone forever. But we also buy homes for other great reasons – they may be in a neighborhood or school systems that we prefer, or an easy commute to our employment. When you own your home, you don’t have to ask permission from a landlord before making alterations. And home ownership still enjoys favorable tax treatment (but keep an eye on Washington!).
Warren Buffett, who knows a thing or two about investing, is well known for this concept (sorry I don’t know the exact quote) – when others are running scared, that is the time to be bold. If anyone questions whether that time is now for housing, I would offer one more extremely important factor that should tip the scales toward buying – mortgage interest rates are the lowest that I have seen in my 42 years at Danberry!
