May
19
Housing Affordability Hits its Highest Level Ever
Posted by kstephens1 under Uncategorized
Buying a home is more affordable now than at any point in the past three decades, data from the National Association of Realtors shows.
Based on the relationship between median home price, median family income, and average mortgage interest rates, NAR’s Housing Affordability Index rose to its highest point ever during the first quarter of 2012.
“For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present,” said NAR President Moe Veissi. “Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means. This is especially true for self-employed buyers.”
More homes would sell if lending standards returned to normal, he added.
During the first quarter, the median-income family earned just under $61,000, so they could afford a $325,500 home. That’s more than double the national median existing single-family home price of $158,100. The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5% of total (gross) income.
A companion index measuring the ability of first-time buyers to purchase a home also set a record. That index assumes a first-time buyer will earn 65% of median family income, and will buy a starter home costing 85% of the median price with a downpayment of 10%. Using those standards, the typical entry-level buyer could afford a home costing $182,500, which is well above the overall median price.
“It’s never been easy to buy a first home because of the cash required for downpayment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better,” Veissi explained.
Most first-time buyers choose a loan with a lower downpayment, often an FHA-insured loan with 3.5% down, and some use the VA program with no downpayment.
Both home prices and mortgage interest rates are expected to edge up modestly as the year progresses, but housing affordability will remain very favorable with the median-income household well positioned to afford a median-priced home, NAR economists predict.
Source: NAR
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May
18
MAAR Releases April Market Report
Posted by kstephens1 under Marketing Reports
Memphis-area home sales for April rose 15.3 percent from a year ago, with 1,166 total sales recorded in the Memphis Area Association of REALTORS® MAARdata property records database. Total sales dropped 9 percent from March. Average sales price year-over-year was down 2.4 percent at $117,101. Inventory was up 3.8 percent, with 7,158 units listed for sale. Sales volume YTD increased 16.7 percent to $503.5 million.
“It was a much better April than a year ago, all across the board,” said MAAR President Carol Lott. “Even better, sales are up almost 20 percent year-over-year.”
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May
11
5 DIY Home Improvements to Boost Your Home’s Value
Posted by kstephens1 under Uncategorized
Cleaning and de-cluttering your home before you put it up for sale will cost around $400, but could bump up the price of your home by more than $2,000, according to data collected by HomeGain.com’s annual home improvement and home staging survey.
The survey asked about 500 real estate agents across the nation to estimate how much low-cost DIY home improvements might add to a home’s value and to recommend the best DIY improvements for home sellers.
The agents’ top five do-it-yourself picks, along with average costs and value add, in rank order:
1. Cleaning and decluttering, to HomeGain, means removing personal items like family photos, removing stains from walls, cleaning siding, getting rid of house smells, organizing your closets, and cleaning the furniture and flooring.
Cost: $402
Added value: $2,024
2. Lightening and brightening your home, by cleaning windows and skylights, removing furniture or anything else that blocks your windows, and repairing light fixtures.
Cost: $424 (paying someone to do those tasks)
Added value: $1,690
3. Repairing and updating your electric and plumbing includes locating and fixing plumbing leaks, replacing outdated fixtures, and making sure your electrical system is in good working order.
Cost: $808
Added value: $3,175
4. Landscaping to add curb appeal. To improve your yard, try weeding, patching bare spots in your lawn, repairing or replacing damaged fences, and adding colorful bedding plants.
Cost: $564
Added value: $1,777
5. Staging includes removing your personal items like photos, putting your existing furniture in attractive grouping or adding new furniture, then placing decorative accessories around your home.
Cost: $724
Added value: $2,145
“The HomeGain results show that do-it-yourself home improvements like cleaning and de-cluttering and lightening and brightening your home are cost-effective ways of increasing your chances of selling faster and closing closer to the asking price than homes rushed to the market with no improvements,” said Louis Cammarosano, general manager at HomeGain.
Source: HomeGain
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May
11
Home Prices Rise in Half of U.S. Cities
Posted by kstephens1 under Uncategorized
Median existing single-family home prices are firming in many metropolitan areas, while improving sales and declining inventory are creating more balanced housing market conditions, according to the latest quarterly report by the NATIONAL ASSOCIATION OF REALTORS®.
Single-family home prices rose in 74 out of 146 MSAs in the first quarter, while prices declined in 72. That’s a big increase from the fourth quarter of 2011, when only 29 areas showed gains from a year earlier.
Most buyers have the income needed to buy a home in their area, assuming they have good credit, a downpayment of 5% to 20%, and they spend 25% of their total (gross) income on their mortgage.
“Qualifying incomes are well below median incomes in most of the country, which means home buyers generally can stay well within their means,” Yun said. “For example, a buyer in Indianapolis making a 10% downpayment would need an annual income of $24,000 to purchase a median-priced home, while in Seattle it would be $55,300. For now, buyers are facing an extraordinarily advantageous situation if they can obtain a mortgage.”
The national median family income was $61,000 in the first quarter. However, to purchase a home at the national median price, a buyer making a 5% downpayment would only need a $34,700 income. With a 10% downpayment the required income would be $32,900, while with 20% down, the income drops to $29,300.
Supply and demand
The housing market in some MSAs remains unsettled, said NAR Chief Economist Lawrence Yun. “Home prices are more volatile than normal because of sudden upswings in buyer activity in some localities, and also are affected by the prevalence of distressed sales,” he said. “Home prices lag sales activity because the transactions were negotiated mostly in the previous quarter. Given the steadily dwindling supply of inventory and notably higher listing prices that are being negotiated today, prices are expected to show further improvements in the near future.”
Pockets where the supply of homes is getting low are developing. “We now have broad shortages of lower priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges,” Yun said. “This is good news for many sellers who wish to list now, or for those waiting for prices to improve.”
At the end of the first quarter, there were 2.37 million existing homes available for sale, which is 21.8% below the close of the first quarter of 2011, when there were 3.03 million homes on the market. There has been a sustained downtrend since inventories set a record of 4.04 million in the summer of 2007.
Average home price
The national median existing single-family home price was $158,100 in the first quarter, which is 0.4% below $158,700 in the first quarter of 2011. The median is where half sold for more and half sold for less.
Distressed homes — foreclosures and short sales which sold at deep discounts — accounted for 32% of first quarter sales; they were 38% a year ago.
Total existing-home sales, including single-family and condo, increased 4.7% to 4.57 million in the first quarter from 4.37 million in the fourth quarter, and were 5.3% above the 4.34 million level during the first quarter of 2011, when sales spiked.
“This is the highest first quarter sales pace since 2007,” Yun said. “With strong market fundamentals, total home sales this year should rise 7% to 10%.”
There are more opportunities for buyers to step into home ownership today, said NAR President Moe Veissi.
“Historically favorable housing affordability conditions are making it easier for buyers to enter the market despite the unnecessarily tight credit conditions,” he said. “Housing supply and demand are roughly balanced with overall housing supply at the lowest level in six years, putting sellers on an even footing with buyers in most markets.”
Who’s buying homes?
First-time buyers purchased 33% of homes in the fourth quarter, unchanged from the fourth quarter; they were 32% in the first quarter of 2011.
The share of all-cash home purchases in the first quarter was 32%, up from 29% in the fourth quarter; they were 33% in the first quarter of 2011. Investors, who make up the bulk of cash purchasers, accounted for 22% of all transactions in the first quarter, up from 19% in the fourth quarter; they were 21% a year ago.
Condo prices
In the condo sector, metro area condominium and cooperative prices — covering changes in 52 metro areas — showed the national median existing-condo price was $157,200 in the first quarter, up 3.4% from the first quarter of 2011. Eighteen metros showed increases in their median condo price from a year ago and 34 areas had declines.
Regional home prices
Regionally, existing-home sales in the Northeast jumped 8.6% in the first quarter and are 6.6% above the first quarter of 2011. The median existing single-family home price in the Northeast declined 3.2% to $226,300 in the first quarter from a year ago.
In the Midwest, existing-home sales rose 5.5% in the first quarter and are 11.7% higher than a year ago. The median existing single-family home price in the Midwest increased 0.8% to $125,300 in the first quarter from the same quarter in 2011.
Existing-home sales in the South increased 2.1% in the first quarter and are 4.1% above the first quarter in 2011. The median existing single-family home price in the South rose 1.2% to $143,600 in the first quarter from a year earlier.
Existing-home sales in the West rose 5.9% in the first quarter and are 1.4% higher than a year ago. The median existing single-family home price in the West slipped 0.9% to $196,200 in the first quarter from the first quarter of 2011.
Source: National Association of Realtors
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Apr
26
Smart Upgrades for Decks
Posted by kstephens1 under Uncategorized
A deck is one of the most cost-effective of all home improvement projects. In fact, according to Remodeling Magazine’s 2011-2012 Cost vs. Value Report, a wood deck project returns an average of about 70% of the investment cost — one of the highest values in the survey.
You can ensure you’re getting the most from this smart investment with low-cost add-ons and special features that increase your deck’s appeal, and that will make your deck one of your home’s most enjoyable living spaces.
Hidden fasteners for decking
For years now, deck screws have been the fastener of choice. (Nails, prone to popping out over time, are old news.) Deck screws come in a useful range of colors, won’t corrode, and hold exceptionally well. However, even when installed carefully, they cover the deck with rows of little pockmarks—tiny depressions that may have splintered edges and trap dirt.
Enter the hidden fastener. This clever innovation holds deck planks down while leaving the surface looking sleek and minimalist. There are scores of hidden fasteners on the market, each of a slightly different design. One category fastens with a screw to the framing and grips the side of each plank with barbs. Another fits into a groove in the side of the plank (some composite planks come with this groove) before being fastened to the joist. Yet another type fastens from underneath the deck, firmly snugging the decking onto the joists.
Hidden fasteners are labor intensive to install, which adds a premium of about $4 per square foot compared with the cost of an installation using deck screws. However, many deck owners find the investment worthwhile, especially if they have selected composite, vinyl, or premium wood decking and want to show off these materials to best advantage.
Adding style with planters
Planters give a deck character. The various shapes and sizes of planters add texture and color. Built-in versions, often made of the same material as the decking, can be positioned to separate seating areas from cooking areas. When planted with tall plants, such as ornamental grasses, they can act as living privacy screens.
Wood planters typically are lined with galvanized sheet metal, plastic containers, or are built to conceal standard pots that are easily removed for cleaning or planting. Planters made of pressure-treated wood sometimes forego the liner altogether.
With all built-ins, some means of drainage is necessary, which may mean you’ll have to bore holes in the bottom of the container. Because excess water will drain from the bottom of your planter, you’ll need to be mindful of where you position the planter. If you hire a pro to custom build your deck planters, assume a cost of $150 to $250 labor and materials for each lineal foot of a 2-foot deep and 2-foot high built-in planter.
Built-ins aren’t your only option. Home centers offer a wide variety of planters available at prices from $10 to $200. Ceramic or cement pots can be a decorative feature, running $50 and up for a 2-foot tall container. Hanging planters (about $25 each) are a great addition to a pergola or trellis. Planters that attach to the railing ($70 for a 40-inch-long terracotta planter with metal holder) all but disappear when filled with plants.
Cable railings
Railings are typically required on any deck when the decking surface is more than 2 feet above ground. Railings are the most visible part of the deck from ground level and offer a great opportunity to echo the colors and architectural details of your house. However, if you are lucky enough to a have a scenic vista (or just an awfully nice yard) you won’t want the railing in the way.
One solution is a cable railing—thin stainless steel cables strung tautly between wood or metal posts. This alternative looks great, preserves the view and, at a cost of about $70 per lineal foot for a pro installation, is about $1,200 more expensive than a standard wood railing for a 16×20-foot deck. To further spare the budget, consider using cable only where the view is important and use wood elsewhere. Or, if you are handy, do it yourself for a materials cost of about $25 a lineal foot.
Taming the sun with shade sails
Overhead structures like wood pergolas and trellises help shield a deck from the sun, adding a pleasantly dappled shade pattern. However, they can be costly to install and challenging to maintain over the years.
Shade sails are a cool, eye-catching alternative. Made of UV-resistant polyethylene knit fabric, sails are triangular, square, and rectangular, and come in a variety of colors. They produce a muted, diffuse light, cutting the glare of full sunlight while still permitting light into windows adjacent to the deck. Shade is not all the sails offer. Many homeowners consider shade sails a form of aerial sculpture and delight in watching them rise and fall gently in the evening breeze.
Shade sails for a 16 x 20-foot deck would cost about $5,500 when professionally installed. (Expect to pay at least 30% more for a custom-built pergola of comparable size.) If you have a smaller installation in mind, you can buy a 12-foot triangular shade at your home center for as little as $200. However, bear in mind that a sail can exert a mighty force on a windy day and must be attached to the framing of the house or to steel or wooden poles set in concrete. A professional installation is recommended.
Source: HouseLogic.com
www.KarenStephens-RealEstate.com
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Apr
26
Mortgage Rates Dip to New Record Lows
Posted by kstephens1 under For Buyers
Mortgage rates moved into record low territory again this week, with the average rate on the benchmark 30-year fixed mortgage rate ticking lower to 4.09%, according to Bankrate.com’s weekly national survey.
The average 30-year fixed mortgage has an average of 0.43 discount and origination points.
The average 15-year fixed mortgage rate pulled back to 3.28% — also a record low — while the jumbo 30-year fixed mortgage held at 4.61%. Adjustable mortgage rates were mixed, with the average 3-year adjustable down for a third consecutive week to a new low of 3.06%, while the 7-year and 10-year ARMs both inched higher, to 3.20% and 3.53%, respectively.
Although corporate earnings have been strong, recent economic data has been more suspect and the European debt crisis is an ongoing saga. Together, these are keeping both bond yields and mortgage rates at historic lows. Mortgage rates are closely related to yields on long-term government debt.
The last time mortgage rates were above 6% was Nov. 2008. At the time, the average 30-year fixed rate was 6.33%, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.09%, the monthly payment for the same size loan would be $965.24, a difference of $276 per month for anyone refinancing now.
Mortgage rates this week
30-year fixed: 4.09% — down from 4.10% last week (avg. points: 0.43)
15-year fixed: 3.28% — down from 3.32% last week (avg. points: 0.39)
5/1 ARM: 3.03% — down from 3.05% last week (avg. points: 0.32)
Source:HouseLogic.com
www.KarenStephens-RealEstate.com
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Apr
23
Changes in FHA Fees May Harm Home Ownership
Posted by kstephens1 under Uncategorized
Recent and pending changes to FHA-backed loans may increase barriers to home ownership and hamper the housing market recovery.
Right now, sellers can pay 6% of the buyers’ closing costs. That helps first-time home buyers who often struggle to come up with enough cash for a down payment plus closing costs. Sellers use closing costs as a way to get buyers to buy their home.
FHA is asking home owners and those in the housing industry what they think about limiting closing cost help to 3% or $6,000, whichever is greater. FHA thinks having buyers put up more cash at closing will make them less likely to default later on their mortgages.
The problem is that making home buyers pay more at closing could slow down the real estate market recovery — particularly in areas of the country with high closing costs (that means you, home buyers in California, New York, Texas, and Utah — states with the highest closing costs, according to the NATIONAL ASSOCIATION OF REALTORS®). Seller concessions are critical in these and other areas to allowing the borrowers to buy a home without depleting all of their savings.
The closing cost proposal comes on the heels of an increase in FHA mortgage insurance premiums that took effect April 9:
The up-front mortgage insurance premium for most FHA borrowers increased to 1.75% of the loan from 1%.
FHA also raised its annual mortgage insurance premium for loans under $625,000 to 1.25% from 1.15%.
Meanwhile, another fee increase is scheduled to take effect on June 1, 2012: Home owners with FHA loans exceeding $625,000 will see their mortgage insurance premiums rise to 1.5%.
To be fair, the insurance premium increases will help balance FHA’s books, keeping it healthy so it can continue to provide mortgage insurance at low rates, often where the private sector doesn’t want to go. Today’s FHA allows borrowers with good credit to buy a home with as little as 3.5% down and to refinance easily.
It’s a popular program in a tough mortgage market. Roughly 40% of all new mortgages for home purchases in 2011 were backed by the FHA.
Although ensuring the agency’s soundness and stability is critical to the nation’s economic recovery, so too is a strong real estate market fueled by home purchases. And if higher home ownership costs keep buyers out of the market, that puts our recovery at risk.
So it’s important to not change the seller closing cost concessions and make sure that the insurance premium increases go back to normal levels once FHA finds its financial footing again. Otherwise, it just becomes more expensive for consumers to buy homes. And as the last few years have shown, when home prices fall, the private sector money flees the mortgage market.
Source: HouseLogic.com
www.KarenStephens-RealEstate.com
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Apr
23
Growth Spurt for Short Sales
Posted by kstephens1 under Marketing Reports
The national housing market shows favorable conditions for short sales in 2012, says RealtyTrac.
According to a recent report, pre-foreclosure sales, which are typically short sales, showed a 33% increase in January over year-ago figures in 32 states. These states included Georgia, with a notably high 113% increase, Michigan (90%), Wisconsin (77%), California (52%), Texas (48%), Arizona (44%), Nevada (36%) and Florida (20%).
Twelve states, including Arizona, California and Florida, had more short sales than REO sales for the month of January.
The rise in short sales might be a factor in the number of foreclosures falling to 2007 fourth-quarter levels.
More “aggressive” pricing for short sales might be evidence of a different outlook that lenders now have, the report said.
Pre-foreclosure prices in January 2012 averaged $174,120, 4% cheaper than last quarter, and 10% cheaper from the previous year.
“Short sales have long held great promise as a market-based solution to the nation’s foreclosure problem, but short sales transactions over the past three years have actually declined after peaking in the first quarter of 2009,” said Daren Blomquist, vice president of RealtyTrac. “January foreclosure sales numbers, along with first-quarter foreclosure activity, strongly indicate that downward trend is ending, and we believe 2012 could be a record year for short sales.”
More than 100,000 homes began the foreclosure process in March — a number that hasn’t been matched since November 2011.
Even more telling, this number of foreclosure starts climbed up 7% from February, making March the third consecutive month for increasing foreclosures.
The new wave of foreclosures should result in more short sales from nearly 3.5 million delinquent loans and, even more so, from some of the estimated 13 million underwater mortgages, according to the report.
Short sales have been a popular topic in recent years, and in recent days.
Fannie Mae and Freddie Mac said Tuesday they will require mortgage servicers to make decisions on short sales under new timelines beginning in June.
Servicers must review and respond to a borrower within 30 days of receiving all documentation. According to guidance released earlier this week, the servicer can take up to 60 days on a decision if negotiations with mortgage insurers or other stakeholders linger.
Short sales have in the past taken several months to complete as servicers, borrowers, buyers, investors and different lien holders had to agree on a transaction.
Mortgage servicers working with the goverment-sponsored enterprises completed a record 32,000 short sales in the fourth quarter, up 14% from the previous quarter, according to agency data.
Source: HousingWire.com
www.KarenStephens-RealEstate.com
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Apr
19
Existing-Home Sales Decline in March but Inventory Down, Prices Stabilizing
Posted by kstephens1 under Marketing Reports
Existing-home sales were down in March but continue to outpace year-ago levels, while inventory tightened and home prices are showing further signs of stabilizing, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 2.6 percent to a seasonally adjusted annual rate of 4.48 million in March from an upwardly revised 4.60 million in February, but are 5.2 percent above the 4.26 million-unit pace in March 2011.
Lawrence Yun, NAR chief economist, said the recovery is in the process of settling into a higher level of home sales. “The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases,” he said. “Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year. With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year.”
Total housing inventory at the end of March declined 1.3 percent to 2.37 million existing homes available for sale, which represents a 6.3-month supply at the current sales pace, the same as in February. Listed inventory is 21.8 percent below a year ago and well below the record of 4.04 million in July 2007.
“We were expecting a seasonal increase in home listings, but a lack of inventory has suddenly become an issue in several markets with not enough homes for sale in relation to buyer interest,” Yun said. “Home sales could be held back because of supply factors and not by demand – we’re already seeing this in the Western states and in South Florida.”
The national median existing-home price for all housing types was $163,800 in March, up 2.5 percent from March 2011. Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 29 percent of March sales (18 percent were foreclosures and 11 percent were short sales), compared with 34 percent in February and 40 percent in March 2011.
Foreclosures typically sold for an average 19 percent below market price in March, while short sales were discounted 16 percent.
NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said buyer traffic is up. “Our members are reporting an increase in foot traffic from a year ago, but more importantly, home shoppers this year are much more serious about finding the right home and making an offer,” he said. “Stabilizing home prices and historically favorable affordability conditions are giving buyers more confidence, and Realtors have become more optimistic since the beginning of the year from the positive shift in buyer patterns.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.95 percent in March, up from a record low 3.89 percent in February; the rate was 4.84 percent in March 2011; recordkeeping began in 1971.
All-cash sales slipped to 32 percent of transactions in March from 33 percent in February; they were 35 percent in March 2011. Investors account for the bulk of cash transactions.
Investors purchased 21 percent of homes in March, down from 23 percent in February and 22 percent in March 2011. First-time buyers accounted for 33 percent of transactions in March; they were 32 percent in February and 33 percent in March 2011.
Single-family home sales declined 2.5 percent to a seasonally adjusted annual rate of 3.97 million in March from 4.07 million in February, but are 5.9 percent above the 3.75 million-unit pace a year ago. The median existing single-family home price was $163,600 in March, up 1.9 percent from March 2011.
Existing condominium and co-op sales fell 3.8 percent to a seasonally adjusted annual rate of 510,000 in March from 530,000 in February, and are unchanged from March 2011. The median existing condo price was $165,200 in March, which is 7.1 percent above a year ago.
Regionally, existing-home sales in the Northeast declined 1.7 percent to an annual level of 580,000 in March but are 5.5 percent higher than a year ago. The median price in the Northeast was $228,300, down 1.9 percent from March 2011.
Existing-home sales in the Midwest were unchanged in March at a pace of 1.02 million but are 15.9 percent above March 2011. The median price in the Midwest was $132,800, up 5.2 percent from a year ago.
In the South, existing-home sales slipped 1.1 percent to an annual level of 1.75 million in March but are 3.6 percent higher than a year ago. The median price in the South was $146,500, up 6.2 percent from March 2011.
Existing-home sales in the West fell 7.4 percent to an annual pace of 1.13 million in March and are 0.9 percent below March 2011. The median price in the West was $198,300, up 1.6 percent from a year ago.
Source: National Association of Realtors
www.KarenStephens-RealEstate.com
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Apr
13
MAAR Releases March Market Report
Posted by kstephens1 under Marketing Reports
Memphis-area home sales for March rose 19.8 percent from a year ago, with 1,281 total sales recorded in the Memphis Area Association of REALTORS® MAARdata property records database. Total sales jumped 29.1 percent from February. Average sales price year-over-year was down 7.7 percent at $113,156. Inventory was flat, at 6,897 units listed for sale. Sales volume YTD increased 12 percent to $354.3 million.
“I feel pretty good about the first three months, being up 12 percent in sales volume from this time a year ago,” said MAAR President Carol Lott. “We also saw a forward move in median sales price from last March to this March. Very positive.”
www.KarenStephens-RealEstate.com
Source: Memphis Area Association of Realtors
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