Tuesday, July 31, 2012

MARKET TRENDS: Real Estate Outlook: Will Recovery Continue?


The economy has been making strides towards recovery, but are these steps enough to ramp up both the housing and labor market?  

According to Bernanke, economic activity slowed during the first half of this year. This came after a 2.5 percent annual rate of GDP growth for 2011. Additionally, while the unemployment rate has fallen over the last year. "after running at nearly 200,000 per month during the fourth and first quarters, the average increase in payroll employment shrank to 75,000 per month during the second quarter."  
Federal Reserve Chairman Ben Bernanke reports there are two risk factors that could cripple a recovery. The first is the euro-area fiscal and banking crisis; the second is the U.S. fiscal situation.  



Housing has seen modest improvement, including rising pending and existing home sales in some regions. This growth is thanks in part to historically low interest rates. Buyers are always returning to the market to take advantage of low prices.


Bernanke says, "Construction has increased, especially in the multifamily sector. Still, a number of factors continue to impede progress in the housing market."


Builder confidence has responded and for the market of newly built, single-family homes, it has risen by the largest one-month gain in nearly a decade. 

The National Association of Home Builders (NAHB) reported on this trend in the their latest HMI survey. "Combined with the upward movement we’ve seen in other key housing indicators over

Monday, July 30, 2012

THE ECONOMY: Home Prices Perk Up


For the last 12 months ending in May, U.S. home prices have increased 3.7 percent, according to the Federal Housing Finance Agency’s latest House Price Index. Home prices increased 0.8 percent from April to May on a seasonally adjusted basis, according to the index, which uses purchase prices of houses with mortgages that have been sold or guaranteed by Fannie Mae or Freddie Mac. 
While prices are picking up, they still may have a long way to go in some markets. Home prices are about 17 percent below the peak reached in April 2007, according to the FHFA index. Prices are at about the same level they were at in May 2004, according to the index. 
Still, other industry reports out recently are also showing an increasing in home prices. 
The National Association of REALTORS® recently reported that median existing-home prices were up 7.9 percent in June from a year ago. In fact, existing-home prices in June posted their strongest gain since February 2006 and for the last four consecutive months have posted increases. NAR attributed most of the price gains to the fact that there were fewer distressed

Sunday, July 29, 2012

MARKET TRENDS: Returning Veterans Hunker Down In Hostile Housing Market


It's tough out there being a military veteran trying to find a job. It's even tougher trying to afford a home - even if they can land a job.

Casualties among military personnel with boots on the ground in the housing market are often disproportionately higher than those among civilians.
The Center For Housing Policy (CFHP) offers the latest in a flurry of recent studies that reveal how those who bravely serve to protect the nation - as well as the nations of others - face a steep, uphill battle at home, in the housing market.



Even with access to federal job training initiatives and other programs for returning troops, many of the jobs veterans enter after time on the battlefield offer wages too low to make housing affordable.


CFHP latest "Paycheck to Paycheck" study edition, "Can veterans afford housing in your community?" examines data from the first quarter of 2012 and reveals the gap between wages and the costs of housing, both rental and owned, in more than 200 U.S. metro areas, for workers in occupations targeted by job training programs for returning vets.
"Because many veterans have been off the job market for years while serving multiple tours of duty, they often struggle to find employment," said CFHP researcher and report author Laura Williams.


"In many housing markets, the jobs America's servicemen and women may find waiting for them after deployment do not pay enough to afford the costs of buying a home, and in some markets and for some occupations, veterans cannot afford the costs of renting a modest rental home," Williams added.


CFHP examined housing affordability prospects for workers in five jobs targeted by the

Saturday, July 28, 2012

MARKET TRENDS: Housing Market Turns Corner; U.S. Home Values Post First Annual Increase In Nearly Five Years


Zillow’s second quarter Real Estate Market Reports, released today, show home values increased 2.1% from the first to the second quarter of 2012 to $149,300 (Figure 1). On an annual basis, home values rose 0.2% from June 2011 levels (Figure 2), marking the first annual increase in U.S. home values since 2007. In addition to showing both quarterly and annual appreciation, national home values also rose for the fourth consecutive month, increasing 0.7%. Notably, home value appreciation in the second quarter was the highest since the fourth quarter of 2005.
Nationally, home values reached their bottom in February of 2012 and have since appreciated at very robust monthly growth rates. Despite encouraging monthly growth, we do not believe that this monthly rate is sustainable and expect it to taper off towards the end of the year. According to the Zillow Home Value Forecast, we expect national home values to appreciate by 1.1% over the next year (June 2012 to June 2013).
The housing market’s recovery continues to show tremendous variation market by market. Sixty-seven of the 156 markets covered by the Zillow Home Value Forecast are expected to see increases in home values over the next year, with the largest increases expected in the Phoenix metro (9.9%) and theMiami metro (6.1%). We believe that ninety-six out of the 156 markets have already hit a bottom in home values, including BostonMiami, and Phoenix. In some of the hardest hit markets, the bottoming process has been quite different than we had initially expected. Due to very low inventory levels paired with greater consumer and investor appetite and low mortgage rates, home values have appreciated faster than anticipated in markets like Phoenixand Miami, creating a V-shaped recovery in home values.
Home Values
The Zillow Real Estate Market Reports cover 167 metropolitan areas (metros) of which 98 showed quarterly home value appreciation. Five metros remained flat, while 64 metros show home value losses. Nearly one-third of metros covered by the Real Estate Market Reports posted annual increases in home values. The largest annual increase was in Phoenix, where home values rose 12.1% from the second quarter of 2011 to the second quarter of 2012. Phoenixis benefiting from high demand for homes from investors looking to convert them into rentals, high demand from mainstream buyers pulled back into the

Friday, July 27, 2012

MORTGAGE & FINANCE: 30-year mortgage at record low; pending home sales drop


WASHINGTON – The average rate on 30-year fixed mortgages fell again, dropping below 3.5% for the first time on records that date back 60 years.
  • A home under contract in Rockville, Md., July 6, 2012.
    By Paul J. Richards, AFP/Getty Images
    A home under contract in Rockville, Md., July 6, 2012.
By Paul J. Richards, AFP/Getty Images
A home under contract in Rockville, Md., July 6, 2012.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan dropped to 3.49% from 3.53% last week. The loans are the lowest since long-term mortgages began in the 1950s.
The average rate on the 15-year fixed mortgage, a popular refinancing option, dipped to 2.80%. That's below last week's previous record of 2.83%.
The rate on the 30-year loan has fallen to or matched record lows 13 of the past 14 weeks.
Cheaper mortgages have helped drive a modest but uneven housing recovery.
For example, another report Thursday said buyers signed fewer contracts to purchase previously occupied homes last month.

National Mortgage Rates

30 yr fixed mtg3.55%
15 yr fixed mtg2.96%
5/1 ARM2.99%
$30K home equity loan5.56%
$30K HELOC4.51%
About these rates
 
The National Association of Realtors says its index of pending sales agreements fell 1.4% in June to 99.3. May's reading was revised down to 100.7.
A reading of 100 is considered healthy. The index is 9.5% higher than it was a year ago. The index bottomed at 75.88 in June 2010 after a homebuyers' tax credit expired.
Contract signings typically indicate where the housing market is headed. There's generally a one- to two-month lag between a signed contract and a completed deal.
Sales of new and previously occupied homes fell in June but were higher than the same month last year. Home prices have started to stabilize in many large markets. And builders are more confident and are putting up more houses than they have in nearly four years.
Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more

Tuesday, July 24, 2012

CONDOS: Condo prices in Boston hit a high


Condominium values in Boston’s core reached a record high during the second quarter of this year as eager buyers drove up sales, according to data­ scheduled to be released Tuesday.
The median price in a dozen downtown neighborhoods — they include Beacon Hill, the Fenway, the North End, and South Boston — climbed to $515,000 during the three months that ended June 30, according to LINK, meaning half sold for more than that price and half for less. That topped the previous peak of $498,500 in 2008, just prior to the nation’s financial crisis. LINK, a Boston company, tracks the downtown condominium market.
The increase adds to mounting evidence that the state’s housing market is on the mend, housing specialists said.
The feeling out there is prices are not going to soften anymore,” said Barry ­Bluestone, the director of the Dukakis Center for Urban and Regional Policy at Northeastern University. “We are seeing the real signs of a recovery in the housing market.”
Even during the worst years of the real estate industry’s decline, condominium prices in some of Boston’s more desirable areas fell only modestly, putting the local market in a better position to rebound. Prices and sales were propped up by higher-income homeowners who were hurt less during the recession, as well as by the increasing popularity of urban living coupled with limited inventory, housing specialists said.
Trisha Collins McCarthy, president of the Massachusetts Association of Realtors, said many

Friday, July 20, 2012

VIDEO: GARDENING, Gardening on top of Skyscrapers - Profiles in Design video

Thursday, July 19, 2012

MORTGAGE & FINANCE: RI group offers new home loan option


Rhode Island Housing is celebrating the launch of new home loan programs designed to allow more residents to buy a home.
The organization plans to highlight its new loan options with an event Thursday in Cranston. Gov. Lincoln Chafee and Cranston Mayor Allan Fung are scheduled to attend.
This spring Rhode Island Housing began offering a new mortgage program for non-first-time homebuyers and a new type of loan with lower monthly payments to qualified first-time buyers.
Thursday's event will be held at the residence of a couple that purchased their home using one

Wednesday, July 18, 2012

THE ECONOMY: Sunny Forecast For The Real Estate Market, Optimism Growing Among Some


The real estate market has had an ominous cloud looming for a long while with sunshine trying to break through. Now, according to a recently released second quarter survey by HomeGain, optimism is growing and a sunnier forecast is anticipated by some.

The outlook for the next two years? The forecast, according to the belief of those surveyed, gets even better. Real estate professionals (82 percent) and homeowners (59 percent), both believe home values will increase in the next couple of years. However, a small percentage group, 6 percent of real estate professionals and 15 percent of homeowners, think the exact opposite.
The survey results are taken from a pool of more than 400 agents and brokers and 1,700 homeowners. Perhaps not surprisingly the optimism is a bit unequal. Regarding the general direction of home values, about 48 percent of industry professionals expect home values to increase compared to only 27 percent of homeowners. However both percentage figures are up from first quarter 2012.



Meanwhile, 14 percent of industry professionals are warning to prepare for yet another decrease in home values. The percentage shoots up to 24 percent of homeowners who agree with this prediction.


Forecasting no change: 38 percent of real estate professionals and 49 percent of homeowners expect home values to remain the same over the next six months.


In a press statement, Louis Cammarosano, General Manager of HomeGain said, “Optimism among real estate professionals spiked in the second quarter. Real estate professionals are optimistic about home prices in the short term and especially optimistic in the coming two years with 82 percent of real estate professionals and 59 percent of homeowners expecting prices to rise.”


But where are these anticipated increases in home values expected? The survey results show expected increases are scattered throughout the country. Here are the lists of the top 10 states where home values are expected to increase in the next six months, according to real estate professionals and homeowners.


Real estate professionals expect increases in home values in the next six months: Virginia, Arizona, Colorado, California, Texas, Florida, Massachusetts, Ohio, New York, and Georgia.
Homeowners expect increases in home values in the next six months in: Arizona, Colorado,

Tuesday, July 17, 2012

THE ECONOMY: Mass. job growth was 4 times greater than estimates


Massachusetts added nearly 40,000 jobs in 2011, four times the revised employment estimates reported earlier this year by federal officials, according to an analysis of newly released data by the University of Massachusetts.
The new data, a census of Massachusetts employers compiled by the US Labor Department, offers the most complete and reliable snapshot of the state’s labor markets. It showed that the state created jobs at about the same pace as the nation last year.
“I guess we’re in middle of the pack in terms of job growth,” said Alan Clayton-Matthews, an economist at Northeastern University. “I wouldn’t jump for joy over the performance in 2011, but I wouldn’t be dismayed about it either.”
The analysis was published Thursday in the UMass economic journal MassBenchmarks. Earlier this year, the Labor Department dramatically lowered estimates of the state’s job gains in 2011 to just 9,100 — a figure that many local economists doubted because other indicators, such as tax collections, suggested much stronger growth.

Information from that census only becomes available months later, and neither the third- nor the fourth-quarter data were available when the Labor Department did its 2011 revisions in the beginning of the year. After the third-quarter data were released in April and UMass did a similar analysis, Labor Department officials acknowledged their revisions were probably wrong.
Those revisions were based on incomplete data for 2011. The Labor Department first estimates job growth based on a monthly survey of employers, which can have a wide margin of error. It later reconciles those estimates with payroll data from a census of employers in the state unemployment insurance system.
They will use the additional information to further revise the 2011 figures next year.
The latest data are from the fourth-quarter census of employers. It showed the state economy

Monday, July 16, 2012

Home Maintanence: Today’s families are prisoners of their own clutter


Tell me about it. That sums up Boston parents’ reaction to new research by UCLA-affiliated social scientists concluding that American families are overwhelmed by clutter, too busy to go in their own backyards, rarely eat dinner together even though they claim family meals as a goal, and can’t park their cars in the garage because they’re crammed with non-vehicular stuff.
The team of anthropologists and archeologists spent four years studying 32 middle-class Los Angeles families in their natural habitat — their toy-littered homes — and came to conclusions so grim that the lead researcher used the word “disheartening” to describe the situation we have gotten ourselves in­to.
At first glance, the just-published, 171-page “Life at Home in the Twenty-First Century” looks like a coffee table book. But it contains very real-life photos of pantries, offices, and backyards, and details a generally Zen-free existence. Architectural Digest or Real Simple this is not. 
Among the findings detailed within:
• The rise of Costco and similar stores has prompted so much stockpiling — you never know when you’ll need 600 Dixie cups or a 50-pound bag of sugar — that three out of four garages are too full to hold cars.• Managing the volume of possessions is such a crushing problem in many homes that it elevates levels of stress hormones for mothers.

• Most families rely heavily on convenience foods even though all those frozen stir-frys and pot stickers saved them only about 11 minutes per meal.
• Even families who invested in outdoor décor and improvements were too busy to go outside and enjoy their new decks.
• A refrigerator door cluttered with magnets, calendars, family photos, phone numbers, and sports schedules generally indicates the rest of the home will be in a similarly chaotic state.
The scientists working with UCLA’s Center on Everyday Lives of Families studied the dual-income families the same way they would animal subjects. They videotaped the activities of family members, tracked their moves with position-locating devices, and documented their homes, yards, and activities with thousands of photographs. They even took saliva samples to measure stress hormones.
The goal, said Jeanne E. Arnold, lead author and a professor of anthropology at UCLA, was to document what is right in front of us, yet invisible.
“What we have is a time capsule of America,” she said. “No other study has been done like this. Imagine how exciting it would be if we could go back to 1912 and see how people were living in their homes. That’s the core of any society.”
Arnold said she admired the way the families coped with their busy lives, but even so, the $24.95 book (available on Amazon) presents a frightening picture of life in a consumer-driven

Sunday, July 15, 2012

NEWS: Wind farms on land grow with few critics

Despite controversy that has slowed the Cape Wind project in Nantucket Sound, land-based wind farms are expanding rapidly in the region.
 
One company alone, First Wind Holdings LLC of Boston, has installed enough turbines in the Northeast over the past few years to generate nearly as much power as the long-awaited offshore wind farm. Other companies, too, have developed wind projects in New England states.

Driving this growth are technological advances reducing the cost of wind turbines and increasing their efficiency, making wind power more competitive with traditional power sources — particularly in the Northeast, where electricity costs can run as much as 60 percent above the national average.

Turbine prices have dropped about 30 percent over the past few years, and new turbines are able to generate electricity at lower wind speeds.

Meanwhile, average electricity prices in the Northeast can top 15 cents per kilowatt hour, compared to a US average of 9.52 cents. New wind technology can generate power at an average cost of about 10 cents per kilowatt hour, excluding subsidies, according to the US Energy Department.

“Some of the states in the Northeast have been some of the fastest-growing markets,” said Elizabeth Salerno, director of industry data and analysis at the American Wind Energy Association, a trade group in Washington. “Power prices are relatively high [there], so by delivering wind projects, you can develop a pretty affordable source of generation.”
First Wind has built wind farms in eight locations in Maine, Vermont, and upstate New York. With the 34 megawatts that will be added when the company completes its wind farm near Eastbrook, Maine, First Wind’s projects will have the capacity to generate nearly 420 megawatts of electricity, compared to Cape Wind’s 468 megawatts.

In addition, Quincy-based Patriot Renewable operates two wind farms in Maine and one in Buzzards Bay, with a total generating capacity of about 25 megawatts. The Berkshire Wind Power Cooperative Corp., a consortium of 14 municipal utilities and the Massachusetts Municipal Wholesale Electric Co., owns a 15-megawatt wind farm in Hancock that went online last year.

A megawatt of wind-generated electricity can power about 300 homes.

Despite the growth of land-based projects, the discussion about developing the region’s wind resources has often focused on offshore projects such as Cape Wind and a proposed “wind energy area” that would encompass nearly 165,000 acres of federal waters off the coasts of Massachusetts and Rhode Island. Last week, US officials completed an environmental review of the wind energy area, an important step in opening the area to development.

Still, it could be years before any turbines are built offshore, meaning that more land-based projects will be needed to achieve renewable energy goals set by several states seeking alternatives to fossil fuels, such as oil, coal, and natural gas. In Massachusetts, for example, the state has set a goal of installing 2,000 megawatts of wind-energy capacity in the state by 2020 and has required utilities to get 15 percent of their power from wind, solar, and other renewable sources in that same time frame.

Today, there are 61 megawatts of installed wind power capacity in the state.
This has created opportunities for companies like First Wind. Founded a decade ago, the

Saturday, July 14, 2012

THE ECONOMY: Sunny Forecast For The Real Estate Market, Optimism Growing Among Some

The real estate market has had an ominous cloud looming for a long while with sunshine trying to break through. Now, according to a recently released second quarter survey by HomeGain, optimism is growing and a sunnier forecast is anticipated by some. 


The survey results are taken from a pool of more than 400 agents and brokers and 1,700 homeowners. Perhaps not surprisingly the optimism is a bit unequal. Regarding the general direction of home values, about 48 percent of industry professionals expect home values to increase compared to only 27 percent of homeowners. However both percentage figures are up from first quarter 2012. 

The outlook for the next two years? The forecast, according to the belief of those surveyed, gets even better. Real estate professionals (82 percent) and homeowners (59 percent), both believe home values will increase in the next couple of years. However, a small percentage group, 6 percent of real estate professionals and 15 percent of homeowners, think the exact opposite. 

Meanwhile, 14 percent of industry professionals are warning to prepare for yet another decrease in home values. The percentage shoots up to 24 percent of homeowners who agree with this prediction. 

Forecasting no change: 38 percent of real estate professionals and 49 percent of homeowners expect home values to remain the same over the next six months. 

In a press statement, Louis Cammarosano, General Manager of HomeGain said, “Optimism among real estate professionals spiked in the second quarter. Real estate professionals are optimistic about home prices in the short term and especially optimistic in the coming two years with 82 percent of real estate professionals and 59 percent of homeowners expecting

Friday, July 13, 2012

FINANCE: Steady Mortgage Rates Contribute to Housing Market Improvements

It was good news this past week for housing when data for pending home sales showed an unexpected jump in May. 


According to the National Association of Realtors, pending homes sales, which represents the number of contracts signed, increased 5.9% to 101.1 from 95.5 in April. Construction Spending also rose 0.9% in May, according to the Commerce Department, which was the biggest gain since December. While some area markets are stabilizing, S&P/Case-Shiller Index of Property Values showed that the decline in home prices during the month of April was at the lowest since November, 2010. Home prices are still down even as the housing market sees some improvement.
FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates have remained steady with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%, all available with 0.7 to 1% origination fee for well qualified borrowers. As these mortgage rates continue at historic lows, home affordability is still high which is helping those who wish to purchase a home. It is necessary to have good credit and qualifications for conforming mortgage approval and many consumers have taken the time to clean up their credit so that they could take advantage of this opportunity. 

Even with a low 5% down payment, obtaining a conforming mortgage with private mortgage insurance is possible and available. With mortgage rates this low, it is a really good time to obtain a mortgage refinance, and now existing borrowers who have mortgages that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009, have HARP 2.0 available for those underwater mortgages. In many instances, HARP will not require an appraisal or other detailed information since it has been expanded to include unlimited loan to values. 

Although HARP guidelines do differ from lender to lender due to overlays, many borrowers have been receiving successful approvals. There are still millions of borrowers who are eligible for HARP which is available until the end of 2013. Seeking a HARP refinance with an online inquiry can bring more success since it opens the door to a variety of lenders who are willing to assist. 

The FHA Streamline Refinance is now another popular mortgage product for borrowers who have existing FHA mortgages that were endorsed prior to June 1, 2009. With no cash out, there is no need for an appraisal or other documentation and verifications. The biggest perk for this program is the extremely low upfront mortgage insurance premium at .01% which gives all eligible borrowers the opportunity to refinance to lower FHA mortgage rates. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%. 

FHA mortgages for home buyers are still available with different programs to fill a variety of needs. The FHA rehab mortgage is now a favorite especially when purchasing foreclosures or short sales. Borrowers who use the FHA rehab mortgage are able to complete the home improvements and repairs without the need of a second loan. Even though FHA closing costs are high because of the upfront mortgage insurance premium and other FHA fees, FHA still offers one of the lowest down payment requirements and flexible credit qualifying, which is not found with other mortgages. Since any FHA approved and participating lender can handle FHA loans, including the FHA streamline refinance, seeking information online has become very popular and successful for many borrowers.
Jumbo 30 year fixed mortgage rates dropped .125% this week and are currently at 4.125%. Jumbo 15 year fixed mortgage rates are at 3.125% and jumbo 5/1 adjustable mortgage rates are at 2.250%. Excellent credit is required in order to receive these lowest jumbo

Thursday, July 12, 2012

MARKET TRENDS: Competition Heats Up As Senior Living Providers Prepare for Boomers

Providing plenty of choice for the coming generation of senior living residents seems to be a key component of differentiating communities and rising above the competition, and a Boston Globe article suggests that current residents in many communities are getting a first taste of what’s to come. 

That first taste, unlike in times past, won’t be Jell-O, says the article: 
Choice is the buzzword for a wave of high-end senior communities opening or expanding in area communities.
As the industry prepares for the aging baby boomers, it’s starting to practice on their elders, who increasingly demand more options and financial flexibility. The products are not just indoor swimming pools and granite countertops but also a la carte pricing that allows retirees to tailor their services.
“The traditional ways aren’t necessarily the best ways,” said Patrick McShane, a spokesman for the Groves in Lincoln, a $130 million independent-living development that offers residents the nursing or personal care they need to stay in whichever apartment or cottage they choose.
“As the boomers continue to age, this is certainly a segment of the population that is very used to having choice and being able to shape where they live and what they drive and what they eat, and that should never end.”
From wine-tastings and day spas to more flexible accommodations for couples who may require different levels of care, senior living communities are ramping up their product

Wednesday, July 11, 2012

MARKET TRENDS: Housing to Play Key Role in Election

Washington and the housing market are never far apart. Experts ranging from real estate professionals to the members of the Federal Reserve have reported that the state of the nation’s economic recovery relies heavily on a housing recovery. 

According to the latest Legislative and Political Forum held at the Realtors 2012 Midyear Legislative Meetings and Trade Expo, housing will play a large part in deciding the outcome of the 2012 presidential election. 

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. "We believe efforts that help creditworthy homebuyers obtain mortgage financing and allow more people to stay in their homes or avoid foreclosure through streamlined short sales are important for a housing and economic recovery." 

For the majority of Americans, their home is their largest asset and the foundation of their familial stability. Taking steps to ensure homeowners keep their homes helps those not only those owners but also home values across the nation. 

Federal Reserve Governor Elizabeth Duke also commented on the need for a healthy real estate recovery. She noted that the health of housing is the strength of the overall recovery. When would-be buyers are worried about job security they aren’t thinking of buying. When potential buyers can’t access credit they can’t buy homes. 

"Unfortunately, some buyers who would like to purchase a home are unable to do so because they cannot obtain a mortgage," said Duke. She said the tightening of credit standards is apparent in the credit scores of borrowers, noting that the median credit score

Tuesday, July 10, 2012

MARKET TRENDS: U.S. home sales up 20% from last year: DataQuick

During the 30-day sales period ending July 5, approximately 211,000 homes were sold in 98 of the top 100 metropolitan statistical areas, research firm DataQuick said Thursday.

Sales overall rose 12% from the same period a year earlier and 10.6% from 2009 levels.


Home prices also went up with the median price hitting $193,000 on July 5, up 6% from a year ago and 4.3% from three years ago.
In a little over a month, the median sales price rose from $186,000 to $193,000.
The DataQuick report analyzes 66.25% of all U.S. home sales, excluding the key markets of

Monday, July 9, 2012

FORECLOSURE: Points to consider when buying a foreclosed home


Rarely have foreclosed homes impacted the real estatemarket as they do currently. Unless you've been on another planet over the past decade, the real estate market hit an astoundingly high-ceiling 'market value' in the mid-2000's. This remarkable condition, where buyers could get mortgageswithout having to provide sufficient documentation that they could actually afford the home, contributed to the onslaught of foreclosures and short sales we have today.
Without entering a discussion as to how this could happen, people in the market for a home today have a great opportunity because of the abundance of foreclosures and reduced prices. But before embarking on the path to purchase a foreclosed home, consider the following:
  1. Do your homework. Real estate websites often list foreclosed homes for sale. Trulia and Zillow are two familiar ones, but there are others. While areas like Sacramento, CA, Las Vegas, NV, Miami, and Atlanta are often cited as being hit the hardest with foreclosures, other areas have been affected as well. If your plans don't include moving to one of these regions where foreclosures are plentiful, search for foreclosures in places you plan to live. There are some in many neighborhoods in most every state.
  2. Buyer beware. If you decide to pursue a foreclosure through an auction company, make certain you get a home inspection before submitting a bid. Most sales are final, and it's too late to discover the plumbing needs an overhaul, or the septic system is not working, after the fact. Even if you don't go the auction route, a home inspection is highly recommended.
  3. Get an appraisal. Most home buyers need some kind of financing help, unless they are fortunate enough to have cash. Lenders require an appraisal on a home they expect to finance. Cash buyers are not hampered by such a requirement. Sometimes auction companies have had an appraisal done before the auction, so be sure to ask. They don't have to tell you what it is, but ask anyway. Having an appraisal is worth the few hundred dollars if you want validation as to what the home's value is. You can also check the tax record to see its assessed value, although these values are for tax purposes and have been at odds with current market conditions.
  4. Consult a real estate agent. While websites may feature foreclosed homes for sale, real estate agents pay a fee to subscribe to a multiple listing service, providing a more comprehensive view of the market. They can quickly identify foreclosed homes in your areas of interest and help you with your research. If you find a property you would like to pursue, they can do a comparison of similar properties (CMA) to show you what properties have recently sold for. This provides an overview of what a 'reasonable' offer price might be. And the service is free, since agents are paid a commission by the seller, not the buyer in most cases.
  5. Bottom line. Lenders are in the business of making money, or at least losing the least 

Sunday, July 8, 2012

UNDERSTANDING CO-OPS: That Riveting Co-op Financial Statement


WHEN you own an apartment in a co-op and the annual board meeting rolls around, the building’s financial statement arrives in the mail.

It’s tempting to let it languish in a pile of bills, but remember: you are a shareholder in the company that owns the building. Given how much New Yorkers invest in their co-ops, it’s worth giving the finances more than a cursory glance. Even if you’re just thinking about buying a co-op, here are questions that can guide you in analyzing whether you’re making a sound investment.
WHAT WENT UP (OR DOWN)?
Financial statements typically present results for the past two years, in columns so you can compare the numbers. “I look for changes from one year to the next,” said Paul Wolsk, a real estate lawyer with Hartman & Craven. “If all of a sudden there’s a much higher accounts payable to vendors, that might mean the co-op is in a cash crunch.” It’s not that a big increase is necessarily a bad sign — the co-op might have had a big expense like replacing the roof. You want to understand why there was a significant change.
WAS THERE A PROFIT LAST YEAR, OR A LOSS?
Obviously, a profit is better than a loss — meaning the building’s income from monthly maintenance fees, commercial rent and other sources covers its expenses. But if a building relies on an unpredictable source of income to pay for operating expenses, like the flip tax some co-ops charge sellers when an apartment changes hands, that can be a red flag. “If they’re making up a deficit with a flip tax,” Mr. Wolsk said, “it’s likely that their maintenance is not high enough.” Most buildings aim for a balanced budget, so if yours shows a loss year after year, that should be a concern.
HAVE THERE BEEN ANY ASSESSMENTS?
Co-ops typically need assessments to pay for capital improvements or unanticipated expenses, like replacing a boiler, doing major work on an elevator or fixing the facade to comply with local regulations. “Try to find out what the assessment is being used for, and how long it continues,” Mr. Wolsk said, noting that longer-term assessments, payable in monthly installments, have become more common than single lump-sum payments.
WHEN IS THE MORTGAGE MATURING?
Unlike individual homeowners, co-ops don’t usually try to pay off a mortgage, because that would mean current shareholders were paying for something that would benefit future shareholders. So a large mortgage isn’t necessarily a concern. But you should pay attention to the interest rate and maturation date.
Arthur Weinstein, a real estate lawyer who serves as a vice president of the Council of New York Cooperatives and Condominiums, said a building’s mortgage should be evaluated in the context of economic conditions. “In a low-interest-rate economy like we’re in now,” he said, “you’d worry about a high-interest-rate mortgage that cannot be refinanced.”
If a mortgage is maturing soon, there will be expenses like legal fees associated with refinancing, but monthly payments may decrease if the new mortgage has a lower interest rate.
HOW MUCH IS IN THE RESERVE FUND?
The one item that even number-averse shareholders tend to look at is the amount in the reserve

Saturday, July 7, 2012

THE ECONOMY: Pending home sales index rises in May, up 13.3% from 2011


WASHINGTON – Americans signed more contracts to buy previously occupied homes in May, matching the fastest pace in two years.
  • A sign for a home under contract. File photo.
    Matt Rourke, AP
    A sign for a home under contract. File photo.

Matt Rourke, AP

A sign for a home under contract. File photo.

The increase suggests home sales will rise this summer and the modest housing recovery will continue.
The National Association of Realtors said Wednesday that its index of sales agreements increased to 101.1 last month from 95.5 in April. That matches March's reading, the highest since April 2010, when a home-buying tax credit boosted sales.
A reading of 100 is considered healthy. The index is 13.3% higher than it was a year ago. It bottomed at 75.88 in June 2010, after the tax credit expired.
Contract signings typically indicate where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.
Recent data suggest the housing market has started to recover more than five years after the bubble burst.

US Pending Home Sales Index Chart

Home prices rose in 19 of 20 major U.S. cities in April from March, according to the Standard & Poor's/Case-Shiller index, released Tuesday. A measure of national prices rose 1.3% in April, the first increase in seven months.
Sales of new and previously occupied homes are up over the past year, in part because mortgage rates have plunged to the lowest levels on record. Builders are more confident and are starting to build more homes.
New home sales jumped in May to the fastest pace in more than two years. Sales of previously occupied homes fell last month, after nearly touching a two-year high in April. Still, re-sales have

Friday, July 6, 2012

FOREIGN MONEY IN REAL ESTATE: Qatar prime minister to buy $250M of One57 condos


The prime minister of Qatar has negotiated deals to by about $250 million worth of apartments in Extell Development’s One57 tower, including a nearly $100 million penthouse, the New York Post reported. Sheik Hamad bin Jassim bin Jaber al-Thani turned his attention to Gary Barnett’s building after his bid to buy Huguette Clark’s Fifth Avenue penthouse for $31.5 million was rejected by the co-op board.
The 10,923-square-foot penthouse was already reported to be in contract for a nine-figure price north of $90 million, but the buyer’s identity was unknown. Sheik Hamad is also in discussions with purchasing four separate full-floor condominium units in the building, at 157 West 57th Street, which could bring the total purchase price to $250 million.
The Post said he had also been eying Denise Rich’s $65 million co-op, but boards were reluctant to have him as a buyer. The sheik has two wives, 15 children, armed security and a