Blogging in Memphis

The average rate on the 30-year fixed mortgage fell again this week to a record low. The eighth record low in a year is attracting few takers because most who can afford to buy or refinance have already done so.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage dipped to 3.88 percent this week, down from the old record of 3.89 percent one week ago.

The average on the 15-year fixed mortgage ticked up to 3.17 percent from 3.16 percent, which was also a record low. Records for mortgage rates date back to the 1950s.

Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.

For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Yet cheap rates on the most popular mortgage option have done little to boost home sales.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.

Previously occupied homes are selling just slightly ahead of 2010′s dismal pace. New-home sales in 2011 will almost certainly be the worst on records going back half a century.

Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose strongly in December and January.

So far, the low rates have had minimal impact. Mortgage applications have risen about 6 percent on a seasonally adjusted basis over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.

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

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

The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate was unchanged at 2.82 percent. The average on the one-year adjustable loan fell to 2.74 percent from 2.76 percent.

The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6

Source: Yahoo Finance

www.KarenStephens-RealEstate.com

Trend #1: Conservation rules

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

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

The WaterSense label, launched in 2006 by the Environmental Protection Agency to promote water conservation by plumbing manufacturers and home owners, will become as well-known as Energy Star. You’ll be shopping for low-flow shower heads and faucets with the WaterSense symbol on the box. Just as with Energy Star appliances, there is no cost premium associated with WaterSense savings — there are faucets in every price range. WaterSense shower heads are newer on the market, with a more limited selection today — mostly at more affordable prices.

You’ll start seeing more shower heads — especially rain shower models — using Venturi principles that deliver strong water pressure by adding air, not water, to the mix. They’re available in every price range, from ultra-affordable standard heads to luxury rain showers.

Trend #2: Technology advances

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

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

Dock your iPhone or MP3 player directly with your speaker-equipped, high-tech toilet so you can entertain yourself on the commode. While you’re not likely to invest $4,000 to $6,000 for a Kohler Numi toilet using this technology today, start looking for competitive models later in the year with lower prices.

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

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

Trend #3: Aging demographics emphasize safety

It’s not just high-tech that’s bringing an “experience” to the bathroom. Trends in universal design features add comfort, convenience, and safety. But that doesn’t mean your bathroom has to look institutional. Here are some universal design innovations that can factor helpfully (and stylishly) into your 2012 bath remodeling plans:

Sleek, low-profile linear drains are ideal for creating safe, zero-threshold shower designs. Unlike standard round drain covers that are typically mounted near the front end of a shower, these long, straight drains can be installed in different locations to minimize the slope of the shower floor. One popular location is at the outside edge of the shower, creating a wheelchair-friendly curbless shower. More offerings in more finishes — including nearly invisible tile-in channel models that are largely covered by shower floor tile — are becoming the standard for upscale spaces. You’ll spend $500 to $900 for a quality linear drain.

The rapidly-expanding selection of porcelain, glass, and ceramic tiles makes it easy to find slip-resistant, low-maintenance floors that don’t skimp on style. Expect to see faux wood, linen, and uniquely-textured looks for tiled bathroom floors and walls in 2012. The texture adds both visual impact and better traction for wet feet.

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

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

Source: www.HouseLogic.com
www.KarenStephens-RealEstate.com

Memphis-area home sales for December fell 10 percent from a year ago, with 898 total sales recorded in the Memphis Area Association of REALTORS® MAARdata property records database. Total sales for all of 2011 dropped 8.4 percent from 2010, with 12,790 recorded sales. Average sales price year-over-year was down 7.1 percent and for all of 2011 was off 2.9 percent at $125,448. Inventory was down 6.2 percent from the previous month, with 7,194 units listed for sale. Sales volume from 2010 to 2011 fell 11.1 percent to $1.6 billion.

“Obviously, the economy of the last year – unemployment continued to run high – had an impact on housing here and all across the country,” said MAAR President Carol Lott. “But the economy is starting to show some positive signs and that can only help consumer confidence.”

www.KarenStephens-RealEstate.com

Decluttering has financial upside
Today’s buyers are looking for turnkey homes. That is, they want to move right in without having to do a lot of work. Buyers with busy lifestyles pay a premium for listings that are in prime condition. Staging can make the difference between a listing selling or not, the time it takes to sell, and the ultimate sale price.

Sellers who are financially strapped often have a hard time accepting that they’ll need to invest in preparing a house for sale even though they may sell for less than they paid. Fix-up costs can mount up; your agent can help you prioritize so that you don’t waste money. It’s important to keep your goal in mind, which is to sell your house in a difficult market.

Recently, a home in Piedmont, Calif., an affluent city neighboring Oakland, came on the market in “as is” condition. It had been lived in for decades without much upgrading. Although located in a desirable area, the listing was vacant, dark and showed poorly. The sellers refused to do any work to improve its appeal.

After months on the market with no significant interest, the sellers pulled the house off the market and made improvements. The wall-to-wall carpet was pulled up to reveal hardwood floors that were then refinished. Painters lightened the interior and a professional stager was hired to bring in furniture, artwork, house plants and accessories. The listing was put back on the market with a fresh look and sold right away.

HOUSE HUNTING TIP: Although listings staged by a good decorator show well and often sell quickly, you don’t need to spend a lot to put your home into shape for marketing. Most homeowners have too many personal possessions in their home from a sale standpoint. Decluttering is something most sellers need to do.

This can generate uncomfortable emotional responses. One seller, who was cleaning out the family home of 50 years, found a packet of love letters his father sent to his mother. Of course, he had to read all of them, which delayed his fix-up schedule.

Consider hiring someone to help you sort, pack, donate and recycle items that you no longer want. You may be able to take a tax deduction for things you donate. Make sure to get a receipt. Your real estate agent should be able to recommend someone who can help you clear your house of clutter if you are overwhelmed by the project.

Your agent, or stager, may ask you to put away collections of art, personal photos, etc. This can be difficult for most sellers because, for them, it’s part of the emotional appeal of their home. Your house won’t look like your home after you’ve removed personal possessions and moved what’s left around to display the house to its best advantage.

That’s the point of the preparation process. You don’t want prospective buyers focusing in on your personal property; you want them to focus on the house. Keep in mind that how you live in your home and how it should look when it goes on the market are not the same.

Some sellers complain that their house looks too stark without all their possessions. Even so, it helps you to detach yourself emotionally from the property. Also, less personal property usually gives homes a more spacious feel. When buyers are looking for the most for their money, bigger is usually better.

To close the deal, a listing should be spotless and inviting. Bring in new house plants to put in strategic locations, like orchids in the bathrooms. In dark spots that need a dash of warmth and color, use bromeliads.

THE CLOSING: If you can’t pull this together yourself, or with the help or your agent, hire a good stager for a consultation or a proposal for full or partial staging.

Source: Yahoo Real Estate

www.KarenStephens-RealEstate.com

Want to reface your kitchen cabinets? Smart decision. It’s more cost-effective and takes less time than a full remodel. Here are options and costs.

Refacing your kitchen cabinets includes covering the exposed frames with a thin veneer of real wood or plastic laminate. Doors and drawer fronts are replaced to match or complement the new veneer. New hinges, knobs, pulls, and molding complete the transformation.

Kitchen cabinet refacing pros
-It’s about half the cost of a total cabinet replacement. You’ll also save the time, cost, and hassle of tearing out your old cabinets.
-It’s a green kitchen remodeling solution because old cabinets stay out of the landfill.
-You can continue to use your kitchen during refacing.
-You’ll give your kitchen a new look in a week or less.

Kitchen cabinet refacing cons
-Pricey options, such as expensive replacement hardware and exotic veneers, can drive up the cost of refacing and reduce savings.
-Refacing materials can’t fix an inefficient layout.

What are your refacing options?
Your choices for the finished look of your cabinets is virtually limitless. Veneers are available in a wide variety of colors, patterns, textures, grains, and more, which you can mix or match to get a relatively low-cost kitchen facelift.

-Rigid thermofoil (RTF) doors, which feature a durable plastic coating over fiberboard, are an affordable alternative to wood or laminate doors.
-Plastic laminates come in hundreds of colors and patterns, are durable and moisture-resistant, and are reasonably priced. You can pick matching or contrasting laminates for your doors and drawer fronts.
-Real wood veneers include many standard species, such as oak, cherry, and maple, and you also can choose from an array of stain colors. Wood veneers are the most expensive option. Wood must be carefully sealed to protect against moisture.
-Further customize and update the look of your cabinets with new kitchen cabinet hardware.

What does refacing cost?
A professional cabinet refacing for a typical 10-by-12-foot kitchen starts at around $1,000 to $3,000 for laminate. Expect to pay $2,500 to $6,000 for real wood veneer. Costs can rise to $7,000 to $9,000 or more for a large project with high-quality wood veneer.

Finishing the project with new hardware (pulls, knobs, hinges) runs $2 to $4 per piece, up to $20 to $50 each for high-end hardware.

In comparison, completely replacing old kitchen cabinets with new cabinets starts at $4,000 to $5,000 and up for stock cabinets; $8,000 to $10,000 for semi-custom cabinets; $16,000 to $20,000 and up for custom-made cabinetry.

Can my cabinets be refaced?
Refacing is feasible if your existing cabinet boxes are structurally sound and in good condition. Cabinets with water damage, warping, and broken frames are poor candidates. Particleboard cabinetry sometimes requires fasteners, in addition to adhesives, to ensure that the veneer is secure.

What’s involved:

A professional installer will come to your house to measure your cabinets and determine the amount of veneer required, the correct sizes and quantities for door and drawer fronts, and how much hardware is needed. Newly ordered doors and drawer fronts may take 1 to 2 weeks for delivery.

When all the materials are in hand, your installer removes old cabinet door and drawer fronts, and prepares the surface of the cabinet boxes by washing the exteriors with a degreaser and lightly sanding the finish. Any significant flaws in the surface are repaired or filled to ensure a smooth, secure fit for the new veneer.

The installer applies veneer to the cabinet faces and any exposed cabinet ends, then mounts the new doors, drawer fronts, and hardware. The process typically takes 2 to 4 days.

Can I do kitchen cabinet refacing myself?
If you have extra time, patience, the necessary veneering tools, and a knack for precision, you can save money by tackling kitchen cabinet refacing on your own.

If you opt to do your own kitchen cabinet refacing, you’ll spend about $200 to $500 on average for materials. Specialized tools (rollers, blades, irons) add $5 to $60 to the cost.

Source: HouseLogic.com

www.KarenStephens-RealEstate.com

Last year, the question on mortgage rates was how low would they go. This year, the question may be how long will they stay this low.

The most recent unemployment report showed the jobless situation moving in the right direction, with 200,000 jobs added last month and the jobless rate dropping to an almost three-year low of 8.5%.

Consumer confidence, as measured by The Conference Board, last month rose to an eight-month high. Meanwhile, increased fees charged to mortgage lenders on government-backed mortgages take effect April 1 and are likely to be passed along to borrowers.

Sounds like the first steps toward an increase in mortgage rates, doesn’t it?

Not yet, say rate-watchers. Conforming mortgage rates generally are predicted to stay well under 5% and near their historical lows until the last part of the year, and even then rates for a 30-year, fixed-rate mortgage will still seem attractive.

The reason for the continued good news on rates is that although some of the latest economic data is good, the market needs to see more of it to conclude there’s a pattern of economic improvement that will stick.

“I still think it is not enough,” said Asha Bangalore, an economist at Northern Trust Co. “The (unemployment) report was encouraging on all fronts. We need continued growth in hiring.”

Mortgage researcher HSH Associates predicts rates this year will range from 3.85 to 4.85%.

Meanwhile, Bankrate.com anticipates the 30-year fixed rate could drop to as low as 3.5%, but such a decline would be brief, and then rates will end the year in the low- to mid-4% range. The Mortgage Bankers Association thinks rates will end the year in the mid-4s as well.

“The economy is in much better shape than a couple months ago, but it’s not hitting the cover off the ball,” said Greg McBride, a senior financial analyst at Bankrate.

There are a number of unknowns that could swing rates in either direction. The quicker the economy finds its footing, the faster the rates will inch upward. An increase in the guarantee fees from Fannie Mae and Freddie Mac, used to fund the payroll tax cut extension, may be followed by additional fees later this year and raise rates more.

On the flip side, it’s unclear what effect the 2012 presidential election, and possible efforts to shore up the economy beforehand, will have on the mortgage market. The Federal Reserve’s recent white paper offered suggestions on remedying credit markets that have been squeezed too tightly.

Continued ultralow mortgage rates would benefit home owners seeking to refinance and consumers secure enough in their personal situation to buy a home. But Keith Gumbinger, vice president at HSH, suggests that people should be careful what they wish for and might want to take a macro versus a micro outlook.

“To wish for continued record lows for rates is to wish for continued economic malaise,” he said. “I can’t imagine anyone would want to wish another year of economic malaise upon themselves or others.”

Expectations and reality. Consumers are feeling just a wee bit better about the state of the broader economy and the housing market. For its December survey on consumer attitudes, respondents told Fannie Mae they expected their personal financial situations to improve over the next 12 months, and they predicted home prices would increase over the next year, but by only 0.8%.

In the current housing market, less bad is a positive. November home prices in the Chicago area declined 10.5% from a year ago, according to new data from CoreLogic. However, most of the decline was the result of foreclosure and short sales activity. If distressed sales aren’t counted, local prices dropped by 1.9% in November from a year ago, and that’s an improvement from October, which registered a 2.9% home price drop from a year earlier.

A separate report from Zillow pegged the overall year-over-year home price decline at 10.2% in the Chicago area in November.

Flipping still OK. The Federal Housing Administration recently temporarily waived for a second time its rule prohibiting the use of FHA-backed mortgages to purchase single-family homes if they were resold within 90 days of the previous sale. The rule was designed to prevent property flipping, but in January 2010 the FHA waived it to help investors buy foreclosures, renovate them, and then resell them. The waiver, which was to expire last month, now expires Dec. 31.

Source: The Chicago Tribune

www.KarenStephens-RealEstate.com

After bidding farewell to 2011, Realtors, investors and regulators the world over are no doubt wondering: Will 2012 be the year the real estate market finally rides out the aftershocks of the housing bust and mounts a full-on recovery?

Check out January’s This Month in Real Estate video discussing the best time to list your home.

www.KarenStephens-RealEstate.com

Most sellers today are nervous and unsure. They wonder: is taking a loss on our house inevitable?

The answer is no! A strategic sales plan, coupled with a smart buy in your new location will ensure that you recoup the maximum value for your home.

Your Strategic Sales Plan
Consult with an expert, local real estate agent to ensure your house is priced competitively and well-staged. Why? Because while there are always three factors to getting a home sold—location, price, and condition—only two are under your control: price and condition. Of the two, which is more significant? Price. Remember that price will correct bad condition, but condition will never overcome a bad price.

Act fast. You’re in a race against time—the best price you’ll get in today’s market is the one you get now. If you wait, it will be lower. And every month the price on your home decreases, your costs remain the same. For example, Keller Williams research shows that sellers who listed their home at the price the agent originally recommended, sold the home 38 days faster. This is over a month of mortgage and tax payments! For a home that cost $200,000 at time of purchase, with 20 percent down and an interest rate of 6.5 percent, selling a month sooner results in a savings of $1101.31 for the mortgage alone, not including the taxes and insurance that the homeowner would be paying during this time.

Don’t worry about where the market has been, keep your focus on where it is going. The price your neighbor down the street got six months ago is not relevant in a market where your house is competing with others from all across town. Again, a local real estate agent will have the kind of long-term, wide-ranging data that will help you decide how to pinpoint your price with precision.

Your Smart Buy
Move up. Whether you are moving to an area where prices are in a downturn, or dreaming of nicer, bigger, home in your own town, selling your house now can get you into the home of your dreams. Falling home prices are a great opportunity for a savvy homeowner looking to move up. Even though your house price may be lower, the smaller loss at sale can be made up by greater savings at purchase. For example, let’s take that same $200,000 home, and imagine that it has decreased in value by 5 percent, reducing the sales price to $190,000. At the same time, let’s imagine that you would like to move up and the $400,000 home you have been eyeing has also decreased by 5 percent. That’s a savings of $20,000, and it is a home that is likely to be better positioned for appreciation when the market rebounds.

Bottom line: don’t pit yourself against the market, work with the market to get the most out of your house sale.

www.KarenStephens-RealEstate.com

Even in the hardest hit markets, there are still properties priced well enough and in good enough condition to interest buyers. Those houses attract offers and sell. Houses that aren’t priced and staged competitively sit. It’s not complicated. It’s really that simple.

For your house to stand out from the crowd, you’ll have to listen to what buyers are telling you and make sure your house is priced well enough and in good enough condition to stand out from the competition. Here’s a quick video explaining how it works.

www.KarenStephens-RealEstate.com