It’s always interesting to review the data compiled on things important to us, and in this case, it’s interesting to see where we in Clay County compare with the data on how housing has changed for us over the past decade. Of course, while many of our current neighborhoods were not even built yet, we did live somewhere before moving to Fleming Island. And for those neighborhoods in Clay county that were established a decade ago, many are reflected in the changes reported here.

 A Decade of Change in Housing Patterns Survey shows that we're living larger and paying for it:

 By Bill Briggs

msnbc.com contributor

Housing Changes In The Last Decade

 Published every two years by the Census Bureau and Department of Housing and Urban Development, the exhaustive analysis pokes into everything from what you owe on your abode to whether you’ve seen a mouse in your house. Owners and renters are equally dissected.

Msnbc.com compared key elements in the latest survey, covering 2009, against the same variables in the 1999 edition and discovered that we’re living larger and, as a nation, collectively way cooler. But when it comes to home style, most of us remain stuck in Mike Brady’s vision of architectural beauty — the 1970s.

A data-dredging journey through the past 10 years also finds that we’re spending extra domestic time outside and that we’re a tad more careful about protecting what’s ours. Of course, the recent mortgage crisis colors some of the numbers in bright red. Below are nine ways in which America’s housing has grown — and groaned — since 1999.

 Visit MSNBC to read the full article: http://tinyurl.com/2ff7voo

 We invite you to follow the link to the msnbc.com article above, and then tell us what changes you made from 10 years ago – and what changes you anticipate in the coming year. We look forward to hearing from you!

If you’ve bought or sold a home anywhere, including in our own backyard of Clay County, you’ve probably experienced a professional Home Inspection.  Is this the only time you need one? Why wait? Having your home in top shape brings peace of mind, quality of life, and of course improves your home’s value when you’re ready to put it on the market whether you’re in Fleming Island, Orange Park or Middleburg. There are a number of reasons to have a professional Home Inspection.

Improve Home Value and Your Quality of Life: If you’re considering putting your home on the market, you’ll want to be sure your home has very good value. Perhaps your home is already for sale and you want to better compete in your price level. To achieve either of these goals, it will be worth it to make improvements. It’s a competitive market out there with lots of homes for sale at attractive prices. While there are a number of things you can do to improve the value of your home, not every home improvement is cosmetic. There are some things that are critical to not just achieving your best market value, but to being able to close the sale of your home, as well as to enjoying it while you’re living there. Discovering what needs attention can be efficiently accomplished by having a professional Home inspection, especially if your home is not brand new.

Improve Your Clay County Home On Your Terms: If you consider having a home inspection when a sale is not depending on it, it can save you frustration and expense when you least want to experience either. You will have time to prioritize, research, and schedule your improvements or repairs on your own terms – when you prefer to pay for them or schedule them. Not only that, but making improvements that benefit you and your family while you are living in your newly improved Clay County home can provide peace of mind and satisfaction. Consider it a check-up for your home. 

What kinds of things are discovered in a home inspection? All kinds of things from deteriorating roofs, termite infestation, leaks, or outdated electrical systems — you can't fix it if you don't know it's broken. Hire an inspector to check out the areas of your home that you don't normally see. They may discover hidden problems that could negatively impact your home's value, let alone be an aggravation to you as a home owner. Small problems (such as a hidden water leak) can become big, expensive problems quickly; the longer you put off repairs, the more expensive those repairs will be.

If you’ve lived in your home for a while, a Home Inspection may be an ideal way to develop a checklist of things to do to improve your home’s value while you improve your family’s quality of life no matter where you live in Clay County. Your Fleming Island, Green Cove Springs, Middleburg, or Orange Park home will be in top notch shape with improvements made from your professional Home Inspection.

When’s the last time you inspected your home?

Our local news reported a list of the most extravagant Celebrity Mansions in the US, and one of them is right down the road in Ocala, Florida. It’s John Travolta’s home located in a fly-in community where he can come and go in his own private jumbo jet. The 6,400 square foot, $2.5 million home resembling a mini air-control tower is designed so the actor's Gulfstream and Boeing 707B can taxi right up to two outbuildings connected to the house. Wow, some digs, and they are extravagant, but not many of us are shopping with these requirements in mind. We have so many great homes available here in our Clay County communities that it can seem overwhelming, and touring through hundreds of homes throughout Fleming Island, Middleburg, Green Cove Springs, and Orange Park can leave you so drained, you may just overlook your ideal home.

Lifestyle and Price: How to choose your home.  A good place to start is with lifestyle and price. Your own important lifestyle traits will help define a list of priority features your ideal home will possess. While it is somewhat subjective, it is important to develop this list of important things about your lifestyle and which home features will respond well to your requirements. How to start? What are the most prominent and important activities in your life? Start with your job. Do you mind commuting, prefer public transportation, or want to live close to where you work? Do you like the quiet, or access to amenities, or is it the hubbub of shopping, proximity to parks, trails, and green spaces that’s makes you smile? If shopping for a family, what about the kids’ activities? Do you want to be in a specific school zone, close to family activities and sports opportunities? Each of these factors will help with focusing in on the ideal location.

Now let’s move inside your home. Do you want plenty of room for entertaining a crowd, or a perfect place for the family to sprawl out over pizza and movies, board games and popcorn, crafts and coffee? Do you want separate spaces for the kids to go hang out, or have a dedicated home office, studio, or den? Are you a gardener, a chef, an art collector, or a hobbyist? Do you like to spend your time be indoors or outdoors; do you like being a part of close-knit neighborhood, or strolling through expansive grounds? Each of these lifestyle choices will drive choosing your ideal floor plan and lot or yard style. When you talk with your Realtor, he or she will interview you to learn where your preferences lie individually and as a family to help you focus on the right homes so you aren’t on a mega tour of misses, and you are sure to find just the right home. They are a wealth of knowledge about not only the homes for sale, but the communities and important features.

Know Your Price: To help identify which homes fit your needs you must know the price range to shop in. This is a straight forward process once you identify your preferred lender. When you apply your provided financial information will drive the amount you can borrow for your ideal home. This takes the guesswork out of your home shopping process and lets you focus on those features that will make a house a home for you.

Now that you have a list of priority features for your next home, along with the amount you’ll spend to obtain it, you’re ready to buy your home. What are you waiting for?

What are your favorite home features, current and future?  

You're a homeowner and you're a busy person, which means at least one thing: You don't have a lot of time to tend to some of the little-yet important-aspects of home ownership. We would like to send you this reminder to check in with the little things. For instance: Are all your showers, sinks, and toilets draining quickly and smoothly? If not, here are some home remedies that should improve your drainage and remove most clogs.

Keeping your drains clog free is important, but sometimes clogs happen. Unclogging a drain is a relatively easy task, especially when you’re equipped with helpful information and the right tools. Here are some useful tools every homeowner can rely on to tackle clogged drains:

1. Plunger: You can use the old fashioned plunger to loosen many clogs and avoid harsh chemicals in the process. Just fill the sink, or tub with some water to aid the process and give the sure sign when you’re successful.
2. Plumber’s Snake: The tried and true tool to dislodge hard to reach, stubborn clogs. Insert and crank the handle until you hit the clog, then reverse and pull it out. A couple of passes should do the trick. (you can rent an electric snake for more power when confronted by a
3. Pressure Washer: For outdoor drains that require attention, professionals use a pressure washer to shoot a pressurized stream of water to break down clogs. Be aware that you may get soaked, but you can clear a clogged outdoor drain this way.
4. Baking Soda and Vinegar: Pouring about a cup of Baking Soda and then ¼ cup of Vinegar into your drain will result in a powerfully fizzling reaction between these two common household ingredients that can break up most clogs.

It’s good practice to pour about ¼ cup baking soda in each drain followed by warm water or a little vinegar. For those of you who aren't currently experiencing drainage difficulties, this is good preventative maintenance, too. If you have a HOMEOWNER DIY Tip, please share it here! Thanks for visiting.

Submitted by Perkins Realty

The Perkins Realty Team hopes your Independence Day weekend was a Blast! And in case you missed it during all those fireworks and hot dogs, Congress voted to extend the dates to benefit by the homebuyer tax credits.

 What does this mean? The deadline to complete the purchase of your new Clay County home and qualify for up to $8,000 has been pushed back to September 30, 2010. That’s good news for everyone who thought they weren’t going to make that June 30th deadline. This extension only applies to those who already have signed contracts, so while we still want to see you run out and start home shopping, don’t do it just for this benefit. The National Association of Realtors estimates that about 180,000 home buyers will benefit from this tax credit extension. If you’re still wondering if you qualify, talk to your agent, or give us a call!

 In addition to the extension, interest rates continue to be the lowest they’ve been for almost a generation. What does this mean for us in Fleming Island and our neighboring towns? If you are considering purchasing or refinancing a home the rates for your potential mortgage are very attractive. The criteria to qualify for a loan has been tightened in today’s climate making your first step in the home shopping process a visit to your lender to prequalify. Once you have this step taken care of it’s time to begin shopping for your next home. There are so many options here in Clay County for your real estate shopping pleasure, so be sure you are in the know regarding all the factors affecting your real estate activity whether you’re buying or selling a home. Stay tuned and thanks for visiting!

"There are a lot of answers to that question," says Stephen Gidus, co-owner of PSG Construction in Orlando.

It's worth it when it makes life more comfortable, convenient and aesthetically pleasing for the homeowner — especially if the homeowner plans to be in the home to enjoy the improvements for years to come, he said. It also is worthwhile if it adds value to the home, and is likely to be attractive to future buyers.

Projects that traditionally boost a home's value and appeal include kitchen and bathroom remodels, and the renovation or addition of a porch, says Scott McCurdy of Coastal Reconstruction in Orlando.

Simple additions that add character to a home also increase its resale value a little. Interior and exterior paint can add "a lot of zing especially in colors that are currently popular, such as greens and black.

Other smaller projects include installing trims such as crown moldings, wider baseboards and tile back splash; changing the hardware on doors; changing toilets, sinks and bathroom hardware; installing new appliances; upgrading countertops; or reworking cabinets by painting them or replacing the doors and hardware.

Gidus suggested two other remodel projects that boost value: the addition of storage space and a multipurpose room.

"Here in Florida we don't have basements or large attics. Extra closet space is very valuable. It has a lot of appeal for resale."

Also, flex-space at the back of the house or upstairs is great. "Based on the size of the family and where they are in the growth cycle, it could be used as a playroom, recreation room, home office, exercise room or entertainment space," says Gidus. "And based on your budget, you could include built-in bookcases, entertainment center, fireplace, full- or half-bath, wet bar, under-counter fridge and a porch or lanai for outdoor living."

But the kitchen is still king when it comes to adding value to a home, followed by the bathroom.

"Those rooms are designed for today. The look and functionality of cabinets, appliances, tile, lighting fixtures, et cetera, becomes outdated fastest," says Gidus.

Kitchens, in particular, are changing — in looks, layout and function, says McCurdy.

"We're finally realizing the kitchen has always been the main gathering point in the home. But until recently, most kitchens have been inadequate to take a crowd," he says. A renovation project can expand the kitchen or open it up to an adjoining space by removing a dividing wall.

Other popular upgrades include commercial-grade stainless-steel appliances; a computer desk; comfortable seating; better-quality cabinetry; granite countertops; and even a fireplace.

A remodeled bathroom usually combines luxury with function, says McCurdy. "It's a place to retreat and unwind."

Features that increase a bathroom's appeal include larger showers with rain shower heads, steam showers, body sprays, heated floors and hinged glass doors or partial shower walls. Also, soaking tubs instead of jacuzzis, more windows and skylights to let in sunlight, and more efficient, quieter ventilation. Disappearing is the elaborate decking that raised tubs several steps above the floor, making access difficult and even dangerous.

"You'll never get dollar-for-dollar what you put into a renovation," says McCurdy. "But with a kitchen or bath, especially, you'll definitely improve your home's value and increase its resale appeal."

 

By:

Jean Patteson Orlando Sentinel

It can be a difficult decision whether to purchase a resale home or a new home from a builder.

Although new homes typically have a higher sales price than comparable existing homes, buyers are willing to spend more up-front with an understanding that part of what they are paying for is assured low maintenance costs. A builder's warranty, along with brand-new roof, appliances, furnace, and other operating systems that make major repairs unnecessary, work together to counteract possible slower appreciation initially.

Buying New Versus Resale

In today's highly competitive market there is a vast array of choices to be made when deciding on the type of dwelling you wish to reside in. Below is a comparison of the advantages and disadvantages of buying a new home versus a resale home.

Advantages of a New Home

One of the primary advantages of buying a new home is the ability to decorate your home from the beginning exactly the way you want. You can pick all the colors, which range from paint to carpet. You can also make the tile and cabinetry selection for the kitchen and bathrooms.

Often, new homes will have more modern conveniences, better insulation and can be more energy efficient.

Disadvantages of a New Home

Unfortunately, with a new home purchase you should be prepared for the on-going construction you will find around you. Chances are that your grass and lawn will not be in, your driveway will be gravel and your street will turn into a sea of mud whenever it rains or snows. If things are going to go wrong with a newly constructed house, they will appear in the first one to two years.

As the house settles you may find cracks appearing in the walls of the basement, especially near any windows in the basement, make sure you get them fixed right away. Also, you should not finish your basement in a new home for at least a couple of years, just in case cracks and leaks develop.

There are additional expenses associated with new homes that you will not typically find in a resale home. For example, you may have to spend additional money for appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc.

Closing costs are typically higher for new homes. The purchaser will pay for such additional costs as the New Home Warranty Program, tree planting, utility hook ups and paving of the driveway.

Usually, when you buy a new home, you don't have an opportunity to see the actual layout. All that is provided is a blueprint and in many cases the end product may be a disappointment to the purchaser because of changes that the builder or sub-contractor does not follow or does themselves. Additionally, there is the uncertainty as to who will be your neighbors.

Advantages of a Resale Home

The major advantage of buying a resale home is that you are moving into an established neighborhood. Your lawn is green, your shrubs are growing, your driveway is paved and your trees are well enough established to give your street a feeling of permanence. Often, most extras are already present, such as appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc.

In terms of investment, a resale home will often give you far more value than a brand new home. Many owners put tens of thousands of dollars into home improvements ranging from small items, such as landscaping, to major projects, such as a finished basement or any of the items above. Although these improvements will make the home more attractive to potential buyers, they may not increase the market value of the home.

A $35,000 swimming pool or a $15,000 finished basement or even $5,000 worth of landscaping may make the home very attractive. However these additional costs incurred may not necessarily increase the market value of a home, especially if you have to sell it at a time of year where these major items add little or no perceived value. The buyer gets the home at its real fair market value, which is based on comparable homes for sale or sold in the neighborhood. All those expensive extras may be included in the home with benefit to the buyer at little or no extra cost. This can be a substantial savings over buying a new home.

With a resale, the vendor's asking price is almost always negotiable downwards unlike the builder’s list price which is usually firm. Any extras or changes are added to the list price of a new home and add up quickly.

Disadvantages of a Resale Home

A small percentage of homes in the marketplace are not considered to be in move-in condition. If both live-in partners happen to be working at full time jobs, a move-in condition home is by far the best alternative. If the property is being under "power of sale" or the property has been rented for many years the home may require a lot of work. If the buyer is not handy or does not have the additional up front capital then the purchaser would be better off buying a home in move-in condition or a brand new home. Additionally, as a home gets on in age certain systems such as heating, cooling, roofing, and/or windows need to be upgraded.

Although some perceive the paragraph above as a disadvantage, some consider it as an advantage. A home that needs some fixing up can in fact present some clear cost advantage to a buyer. Usually, it can be purchased below the going market value, while at the same time providing an opportunity to have it decorated to suite your specific tastes.

Neighborhood: Known or Unknown Factor

When you buy a resale home, you can find out a lot more about the property and the neighborhood before you buy than when you buy a new home. Land to support new-home developments usually is located on the outskirts of town. Potential buyers should ask the developer about future access to public transit, entertainment activities, shopping centers, churches, and schools. Local zoning ordinances also should be reviewed. A rather remote area can turn into a fast-food-chain haven within a couple of years. Try to ensure that the neighborhood, if not strictly residential, will not begin sprawling out of control.

Buying into a new-home community may seem riskier than purchasing a house in an established neighborhood, but any increase in home value depends upon the same factors: quality of the neighborhood, growth in the local housing market and the state of the overall economy. One survey by the National Association of Realtors shows that resale homes do have an edge over new homes when it comes to appreciation.

More Questions and Items to Consider

There is a major decision early in the process of purchasing a new home and that is whether to build a new home or purchase a resale home already on the market. The following provides some considerations that may help you make an informed decision.

Location, location, location.
Are new homes being built in the area you desire? Do you know the surrounding zoning and what will be constructed in the area? How far away are services (schools, stores, hospital, doctors, etc.) that you need? How long is the commute to work?

Investment.
Typically, due to the continual addition of features, rising labor and material costs, new homes cost more than similar resale homes. Do you have to pay significant impact or lot levies or taxes and fees that are imposed on the builder? Are the taxes on the new home much higher than a comparable resale home? Will you be in the new home until the area is built out so you will not be competing with the builders should you need to sell the home? Is the home going to be high priced compared to other homes built or going to be built in the area?

Features.
Are the style and features that you desire only available in a new home? Can you find a resale home with most of the features and amenities you desire? Can you add the features you desire to a resale home? Are newer resale homes available that meet your needs?

Risk.
Is the new home builder or developer financially stable? Is the builder a large well known company with a good reputation? Is the builder asking for significant down payments or advance payments? Are there complaints lodged against the builder for shoddy work or not making repairs? Has the builder been delivering homes when promised? Check with your Better Business Bureau, the town or the city and talk to homeowners that have purchased a home from the builder.

In summary, a resale home can cost less, be more conveniently located, you know the area and amenities and have less risk involved. A new home can be constructed to have the exact style and features you desire, but usually with much higher costs, limited locations, and more risk.

Conclusion

In today's market place both new and resale homes are selling briskly. Once you've evaluated the pros and cons of each alternative, you can make an intelligent, educated decision as to which option is best suited for your particular needs.

Ultimately, the decision should be based on your needs and wants, your family and/or children, your tolerance for risk and the unknown and ultimately your budget.

Washington, September 14, 2009

The National Association of Realtors® is calling upon its 1.2 million members to urge Congress to extend the successful homebuyer tax credit into next year.

Since its inception earlier this year, the $8,000 first-time homebuyer tax credit has brought 1.2 million new buyers into the market—350,000 of whom would not have purchased a home without the credit, according to NAR. The credit is due to expire November 30.

“Now is the time for Congress to keep this recovery going by extending the tax credit through 2010 and making it available to more homebuyers. We have all seen how the credit has been a spur to bring homebuyers into the market, and have seen the beginnings of a real recovery in the housing market. Housing has always led this nation out of economic downturns, and can do so again,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

Realtors®, the leading advocates for homeownership and housing issues, will be writing to their Senators and Representatives to tell them of the successes with the tax credit thus far and to press them to extend and expand it now.

McMillan added that the market has improved, but it has not yet fully corrected itself. “The credit needs to be available for an additional period of time in order to sustain the progress that’s been made so we can continue to see our markets fully recover. Uncertainty about the future of the credit will dampen consumer demand. The only way we can assure that the progress we've made can continue is to extend the credit and to do that now,” he said.

As the current deadline for the credit looms, potential homebuyers need to complete a contract, satisfy any contingencies, secure financing and go to closing by November 30. In today’s market, NAR estimates that it generally is taking between 45 and 60 days from contract to closing.

“That means potential homebuyers who qualify must act now, and so must Congress,” McMillan said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the appraisal issue is complicated. “We see that distressed homes often are selling for 20 percent less than normal homes in the same area, but some appraisals don’t distinguish between traditional homes and distressed property,” he said. “In many cases appraisers from outside the area are being used, but as everyone knows real estate is local and appraisals should be done by an expert with local expertise.”

McMillan said sellers shouldn’t hesitate to speak with an appraiser about their home. “Sellers should feel free to tell an appraiser about improvements and renovations to their home, and how it compares with other homes in the neighborhood,” he said.

“Also, if recent sales in the neighborhood were discounted, but not similar to your home in terms of quality or condition, that should be pointed out. It wouldn’t hurt to put all this in writing, especially if an appraiser is not familiar with your area. A Realtor® could offer guidance and information to help you with this process.”

NAR’s Housing Affordability Index remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.

The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.

Existing-home sales should trend up through the end of the year, with normal local market differences. “The big question is how much the appraisal issue will impact the ability of contracts to go to closing,” Yun said. “We are currently conducting a study to assess the degree to which new appraisal rules are impacting home sales.”

(NAPSI)—A little forethought can go a long way toward helping you save money and perhaps your home. As reverse mortgages become more popular, homeowners should avoid taking on too much risk, overburdening themselves with debt and falling for misleading marketing, say experts at the U.S. Office of the Comptroller for the Currency (OCC).

“Reverse mortgages can provide real benefits, but they have some of the same characteristics as the riskiest types of mortgages,” Comptroller of the Currency John Dugan said. “That means consumers and regulators have to be on alert to emerging risks so these loans are made in a way that is prudent for both homeowners and lenders.”

Reverse mortgages provide income or credit to homeowners by letting them tap their home equity. The Federal Housing Administration insures 90 percent of reverse mortgages, known as Home Equity Conversion Mortgages, or HECMs. These mortgages don’t require repayment until the homeowner dies, permanently moves or fails to maintain the property or pay property tax. Remaining equity belongs to the borrower or the borrower’s heirs. While these loans make sense in some cases, consumers should clearly understand their responsibilities and risks.

A few associated risks include:

• Deceptive and misleading marketing. The complexity of these products and incentives for some brokers can put the emphasis on making the loan rather than ensuring it’s appropriate for the borrower.

• Conditioning availability on other financial products. Because reverse mortgages often involve large lump sum payments, borrowers can be vulnerable to coercive sales of expensive annuities or long-term care insurance.

• High fees. Borrowers may also overlook substantial fees.

• Failing to pay taxes and insurance and failing to maintain the property can result in foreclosure, so it’s important to be sure these responsibilities are covered.

Among national banks, the OCC uses its authority to reduce such risks, but more work with other regulators is necessary to set and apply standards for all reverse mortgages.

Message to Buyers: You Can Probably Afford It

 
Housing is remarkably affordable these days.

A family earning the nation’s median income of $64,000 a year could afford to buy 72.3 percent of all homes sold in the United States during the second quarter of 2009, according to the National Association of Home Builders and Wells Fargo.

Sellers are the ones who are paying the price. More than 30 percent of all homes sold during the second quarter sold for less than the sellers paid originally, according to Zillow.com.

A significant percentage of owners who bought within the past five years and sold during the quarter lost money on the deal, according to Stan Humphries, Zillow's vice president in charge of data and analytics.

[Editor's note: Although discussion of trends on a national level can be useful, conditions in a local market can be vastly different from what's happening statistically on a national level. For that reason, conditions for owners who've bought in the last five years might or might not resemble what analysts are seeing statistically on a national basis.]

Source: CNNMoney.com (08/19/2009)

Mortgage Applications Rise on Falling Rates

Mortgage applications bounced back last week with the Mortgage Bankers Association market index rising 5.6 percent on a seasonally adjusted basis compared to the previous week.

On an unadjusted basis, the index increased 4.8 percent and was up 25 percent compared with the same week a year ago.

The recent seesaw of mortgage rates has affected refinances more than purchases. The refinance index rose 6.9 percent last week after falling 7.2 percent the previous week, reflecting declining mortgage rates. The purchase index, which has trended upward gradually, rose 3.9 percent.

Here are the average performances of mortgage rates this week:

• 30-year fixed-rate mortgages decreased to 5.15 percent from 5.38 percent.
• 15-year fixed-rate mortgages decreased to 4.52 percent from 4.71 percent.
• 1-year ARMs decreased to 6.66 percent from 6.71 percent.

Source: Mortgage Bankers Association (08/19/2009)

“Florida is overdeveloped, over speculated, and overleveraged,” says Greg Rand, managing partner at Better Homes and Gardens Rand Realty.

Florida is also a great buying opportunity, he insists. With 78 million baby boomers expected to retire in the next two decades, the Sunshine State’s prospects are good, Rand says.

The smart money is coming back to Florida, agrees Harvey E. Green, president and CEO of commercial real estate brokerage Marcus & Millichap. Green has been investing in real estate for more than 40 years.

Ruth Trettis, a broker at Premier Properties in Naples, Fla., says she has sold nine homes in Port Royal, the city’s most affluent area, to one buyer. That buyer, who purchased the properties at deep discount, hasn’t done anything with them, even though the costs of just holding them are high. The buyer, Trettis says, bought the properties because he has a strong belief in real estate as a long-term investment.

The key is patience, says Green. “Real estate was never a short-term investment.”

Source: The New York Times, Paul Sullivan

Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the appraisal issue is complicated. “We see that distressed homes often are selling for 20 percent less than normal homes in the same area, but some appraisals don’t distinguish between traditional homes and distressed property,” he said. “In many cases appraisers from outside the area are being used, but as everyone knows real estate is local and appraisals should be done by an expert with local expertise.”

McMillan said sellers shouldn’t hesitate to speak with an appraiser about their home. “Sellers should feel free to tell an appraiser about improvements and renovations to their home, and how it compares with other homes in the neighborhood,” he said.

“Also, if recent sales in the neighborhood were discounted, but not similar to your home in terms of quality or condition, that should be pointed out. It wouldn’t hurt to put all this in writing, especially if an appraiser is not familiar with your area. A Realtor® could offer guidance and information to help you with this process.”

NAR’s Housing Affordability Index remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.

The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.

Existing-home sales should trend up through the end of the year, with normal local market differences. “The big question is how much the appraisal issue will impact the ability of contracts to go to closing,” Yun said. “We are currently conducting a study to assess the degree to which new appraisal rules are impacting home sales.”

Article derived from Custom House Publishers, Inc.

Date Added: 8/4/2009

Use real estate trends and forecasts for investor success

Investors are making the most of real estate trends and forecasts in various ways. Having these up-to-date forecasts can help a company know where to invest, how much to invest or why not to invest. These forecasts are tools to use for current and future investment needs.

Real estate industry trends are available through news organizations, real estate agents and brokers and national tracking organizations. They are updated monthly or quarterly, but local agents can produce these week by week if needed. When using trends for investment decisions, consider the following:

1. Insist on getting real estate forecasts from experienced professionals in the industry.

2. Keep in mind that real estate trends in the U.S. come out quarterly, but local trends can have monthly monitoring.

3. Couple real estate trends and forecasts with the company's long-term goals, noting forecasts are not guarantees of future performance.

Utilize real estate market trends to find low-priced property for investment

Current real estate trends allow an investor to find property hot spots, where real estate is priced well. High foreclosure areas may have low prices. Drops in house and commercial building value may make investments more affordable.

Obtain real estate analysis to use for negotiation purposes

Current real estate forecasts can be used to help an investor to buy a property at a more affordable price. With the help of a real estate agent, the property values in the surrounding area and forecasts can be used to negotiate the price desired by a property lower. Use accurate and published reports to verify trends.

Require the use of real estate sales trends for selling property

Investors, commercial owners or others can use trends in real estate to help make key decisions about when to sell and how well to price real estate for sale. Knowing realty trends allows investors to know if they should sell now or hold onto the property long term.

Tips & Tactics

Helpful advice for making the most of this Guide

•  Invest in the United States real estate market with a thorough understanding of what is happening within it. Investors, private or commercial, can use this information to help them consider transactions, negotiate deals or to help them renegotiated mortgages on current property. A real estate agent can help with this requirement.

One way that buyers without enough money to get a mortgage can purchase a home is with a lease-purchase agreement.

Usually, the terms of the deal include a lease and an option to buy with part of the rent going toward the down payment. The forced savings helps buyers amass enough to buy the house in the specified time frame, usually three to five years.

Cindy Walker, an associate with South Island Real Estate in Melbourne Beach, Fla., recently helped a young couple negotiate such a deal. She received a rental commission for the lease arrangement, and she will get a sales commission if the purchase option is executed.

Some real estate professionals find this arrangement unacceptable, but Walker says, “I look at it as money in the bank."

She offers these tips for anyone contemplating using a lease-purchase option:

Don’t be afraid to ask the seller if the owner would accept a lease-purchase agreement. Sellers might find it attractive once they understand it will generate regular rental income.

Negotiate how much money will go toward the down payment and whether the buyer or the seller or both will handle maintenance and repairs.

Avoid prepayment penalties. No prepayment penalty increases the incentive to do the deal quickly. In most cases, that’s a good thing from both the buyer’s and the seller’s points of view.

Source: Florida Today, Anne Straub (07/19/2009)

Don’t forget to remind potential buyers of something that is obvious to real estate professionals: Now is the time to buy, but that opportunity may be slipping away.

For people who have a job and money, a dream house is within reach, writes Marc Roth, founder of Home Warranty of America and a columnist for Business Week.

He points out that mortgage rates remain low, prices are still at historic lows, and the government is offering incentives for first-time homebuyers.

He also adds that the inventory of homes to buy is still large, but it is shrinking. According to the NATIONAL ASSOCIATION OF REALTORS®, the housing inventory peaked in November 2008 at an 11-month supply. At the end of May 2009, it had fallen to a 9.6-month supply.

Roth says anyone who dallies will miss a good opportunity to buy a first home at a terrific price or go shopping for a move-up property that is a great buy.

Source: BusinessWeek.com, Marc Roth (11/17/2009)

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the NATIONAL ASSOCIATION OF REALTORS ®. May’s increase was the first back-to-back monthly gain since September 2005.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April. Sales remained 3.6 percent below the 4.95 million-unit pace in May 2008.

Lawrence Yun, NAR chief economist, expected an improvement in sales.

“Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” Yun says. “First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory.

Poor Appraisals Stall Transactions

However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.”

Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April.

Yun says the appraisal problem is serious.

“Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he says. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”

NAR President Charles McMillan says appraisals and the tax credit are key issues.

“To maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist,” he said. “In addition, the first-time buyer tax credit should be expanded to all buyers of primary homes regardless of income. Extending the credit into 2010 would allow more time for the market to catch up with underlying demand, in part because many families with children, who normally time their purchase based on school year considerations, do not have enough time to move before the start of school in late August.
“Freeing a pent-up demand in housing will absorb inventory at a faster pace, strengthen communities and stabilize home prices earlier,” McMillan said.

A Closer Look at May Housing Data

An NAR practitioner survey in May showed first-time buyers accounted for 29 percent of transactions, and that the number of buyers looking at homes is nearly 10 percentage points higher than a year ago.

“This is the time of year when we see large increases in the number of repeat buyers, who are benefiting from sales to entry-level buyers,” Yun says. “Investors appear less active, but are more prevalent in areas with large price corrections.”

National median existing-home price: for all housing types was $173,000 in May, down 16.8 percent from a year earlier. Distressed properties, which declined to 33 percent of all sales in May from 45 percent in April, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

“The decline in the distressed sales share likely results from an increase of repeat buyers in May,” Yun says. “First-time buyers are concentrated in the lower price ranges, which include most of the distressed sales.”

Single-family home sales: rose 1.9 percent to a seasonally adjusted annual rate of 4.25 million in May from a pace of 4.17 million in April, but are 3 percent below the 4.38 million-unit level in May 2008. The median existing single-family home price was $172,900 in May, down 16.1 percent from a year ago.

Existing condominium and co-op sales: increased 6.1 percent to a seasonally adjusted annual rate of 520,000 units in May from 490,000 in April, but are 8.9 percent below the 571,000-unit level in May 2008. The median existing condo price was $173,800 in May, down 21.9 percent from a year earlier.

By the Region

Here’s how housing fared across the country for existing-home sales:

Northeast: rose 3.9 percent to an annual level of 800,000 in May, but are 10.1 percent below a year ago. Median price: $243,600, which is 12.5 percent below May 2008.
Midwest: jumped 9 percent in May to a pace of 1.09 million but are 4.4 percent below May 2008. Median price: $145,800, which is 10.4 percent lower than a year ago.
South: unchanged at an annual pace of 1.74 million in May but are 8.9 percent below a year ago. Median price: $157,400, down 9.9 percent from May 2008.
West: slipped 0.9 percent to an annual rate of 1.14 million in May, but are 11.8 percent higher than May 2008. Median price: $197,700, down 30.6 percent from a year ago.

Source: NAR

Housing analysts say that while sales are picking up, home prices are likely to continue dropping at least through mid-2010, and some prognosticators say until 2013.

The pessimists point to a rising number of option ARMs and Alt-A mortgages that are likely to reset in the next 18 to 24 months, leading to still more foreclosures.

"We're about two-thirds of the way through the pricing correction on a percentage basis," says Joshua Shapiro, chief U.S. economist with MFR Inc., an economic consulting and analysis firm. He predicts that prices will fall another 20 percent over the next 18 months.

"This is clearly the worst housing crisis since the Depression," says John Burns, president of John Burns Real Estate Consulting. "I think that once prices bottom out, they're going to stay flat for several years."

Source: Fortune, Janet Morrissey (06/19/2009)

Although several economic indicators suggest improving conditions, some analysts are looking at the housing market’s prospects skeptically.

"I'm not saying that home building is still headed straight down like it had been for months and months, but I'm hesitant to say that we're bouncing off the bottom," says Joe Snider, a vice president and senior credit officer with Moody's Investors Service. "I think it's more a case of we're crawling along the bottom."

Brad Hunter, chief economist and national director of consulting at Metrostudy, a housing market research firm, says housing starts are low and will stay that way until builder inventory is sold, credit is more freely available, and buyers jump back into the market.

John Burns, a real estate consultant who advises major home builders, expects that the median home price will fall another 5 percent to 6 percent before leveling off.

"It's the better areas that are going to get hit over the next 12 months," he predicts, because of rising foreclosures among prime buyers.

Renters, Burns concludes, aren’t feeling any need to become owners because they aren’t confident about their financial situation nor are they confident that prices won’t drop farther. "It's going to take a couple years to work our way through this," he says.

Source: The Wall Street Journal, Dawn Wotapka (06/15/2009

 

Remodeling magazine's annual report shows that maintenance-related projects and moderately priced upgrades are providing stable paybacks, even in a slower market.

By G.M. Filisko

Despite home price drops in many cities, remodeling projects are holding their own as a way for owners to add value. Many people are wondering where their money will be safest during these uncertain economic times. When home owners turn to you for your expert advice, counsel them that some things never change: Investing in their home still pays off.

NATIONAL ASSOCIATION OF REALTORS® statistics show that home prices have fallen by an average of 7 percent nationally in the past year. But the value of home owners’ investment in remodeling projects has declined only 3.86 percent on average between 2007 and 2008, according to Remodeling’s 2008–2009 Cost vs. Value Report. Remodeling produces the Cost vs. Value Report each year in cooperation with REALTOR® magazine. REALTORS® responding to a survey in midsummer said home owners could expect to recoup a national average of 67.3 percent of their investment in 30 different home improvement projects. At the height of the housing boom in 2005, home owners could expect to recoup a national average of 86.7 percent on projects. Remodeling remains hot in 10 cities, where, on at least some projects, home owners can recover 100 percent of their costs. In Charlotte, N.C., for example, decks, midrange kitchen remodels, vinyl siding, and window-replacement projects all would net more than they cost, in respondents’ estimation. High rates of recovery were seen in both strong real estate markets and weak ones.

Many cities with the highest rates of recovery were smaller—Jackson, Miss., and Billings, Mont., for example—which may point to lower labor and materials costs that are easier to recoup. Seattle also made the list of cities with a cost recovery of more than 100 percent on decks and minor kitchen remodels. In fact, Pacific Coast cities recorded the best payback on remodeling by a wide margin, as they did in 2007. Although construction costs on the Pacific Coast are nearly 17 percent higher than national averages, the value of renovations at resale more than makes up for those higher prices. The result is an average cost-recouped percentage that’s 14.8 percent higher than in the rest of the country. The toughest place to get your money back: Midwestern cities such as Chicago, Cleveland, Indianapolis, and Milwaukee.

Top 10 Project Paybacks

Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year’s Cost vs. Value survey. When you compare the national averages, replacement projects that boost curb appeal—siding, windows, and decks—give you the greatest chance of recouping your money. Inside, only kitchen remodels can compare, at least on a national level.

1. Upscale fiber cement siding (86.7%)
2. Midrange wood deck (81.8%)
3. Midrange vinyl siding (80.7%)
4. Upscale foam-backed vinyl (80.4%)
5. Midrange minor kitchen remodel (79.5%)
6. Upscale vinyl window replacement (79.2%)
7. Midrange wood window replacement (77.7%)
8. Midrange vinyl window replacement (77.2%)
9. Upscale wood window replacement (76.5%
10. Midrange major kitchen remodel (76.0%)

Why Renovation Pays

Why are renovations holding their value better than home prices today? "When housing slows down, people stay put and renovate their house to make it more livable," says Paul Zuch, president of Capital Improvements, a designing, building, and remodeling company in Dallas. And by renovating before they sell, home owners get to enjoy the new space themselves, not just make the home more appealing to buyers. "It just makes sense," says Zuch. Recent renovations also make buyers’ lives easier. "Home owners who remodel their home are providing a service to future buyers," says Eileen Nelis, a broker at Savvy and Co. in Charlotte, N.C. "When buyers purchase, they don’t want to do all that painting and remodeling, and they don’t want that price tag. They may be willing to make improvements down the line, but when they purchase, they want to open the door and have everything complete. It reduces their stress."

Making home improvements can also reduce sellers’ stress by heading off that time-honored negotiating technique—pecking away at the sales price by pointing out imperfections. "If sellers have done some improvements and dressed up their property, the improvements will help sell it," says Bernard Fallon, broker at Fallon Associates Realty in Rochester, N.Y. "If sellers don’t want to improve their property, buyers will tick off the repairs and try to take them off the price."

That doesn’t mean that every home owner should do every renovation, even in a more stable real estate market. Take Tulsa, Okla., where median home prices actually edged up slightly more than 2 percent in 2008, according to NAR. REALTORS® in Tulsa reported that, of the 30 remodeling projects surveyed, only 16 netted home owners at least 80 percent of the cost. "Not every neighborhood will support the additional work," says Jim Hemphill, a sales associate at Coldwell Banker Select in Tulsa, "but in older, more established neighborhoods, if you redo a kitchen or bathroom or add a master bath or bedroom, you’ll get your money out."

Despite the value, the weak economy is likely to slow seller spending on remodeling, at least in the short term, predicts the most recent Leading Indicator of Remodeling Activity computed by the Joint Center for Housing Studies at Harvard University. The LIRA for the third quarter of this year estimated that owners’ spending on home improvements will decline at an annual rate of 12 percent by the second quarter of 2009, continuing a two-year downward trend. Spending is unlikely to recover until the housing market turns around, according to the Center. Yet, despite declines in overall remodeling dollars spent and a still shaky housing market, "people’s homes are still one of their best, most solid investments," notes Zuch. "Even though the markets have gone through some adjustments, it’s still smart to invest in your home."

Home-equity snapshots paint a bright picture.
By Robert Freedman | June 2009

Many Americans have taken a hit to their home equity over the past couple of years, and some may wonder if it’s really the smartest financial decision to own a home. Good news—a recent analysis of Federal Reserve data by the NATIONAL ASSOCIATION OF REALTORS® shows the answer is yes.

In comparison with renters, home owners have much greater household wealth, says NAR’s April commentary on the Fed’s Survey of Consumer Finances. Owners’ wealth exceeds that of renters by a factor of 50-to-1: a median of $205,200 versus a median of $4,200. The main wealth difference between the two is home equity, of course. No news there. But even for households who’ve owned their home only since 2003, home equity gains are the rule rather than the exception—and in some cases, equity gains have been significant. Households who bought five years ago in Honolulu, for instance, already average nearly $272,000 in equity. In Northern California (San Francisco and Oakland), the comparable figure is $105,000.

Times are tougher for home owners in a handful of economically struggling markets like Detroit and other parts of the industrial Midwest. Households in these areas who’ve owned their home for five years or less are facing negative equity, although typically not a lot. Hardest hit are households in Detroit who have been owners only since 2003; they’re underwater by a typical $39,000. That’s significant. But in other markets where equity is negative, the numbers tend to be much smaller—$1,000 in Indianapolis, for example.

Yet the doom and gloom ends there. In all 150 markets tracked by NAR, including hard-hit markets, households who’ve owned their home for 10, 15, and 20 years have uniformly enjoyed strong equity gains despite the recent downturn. In Honolulu, 20-year owners have accumulated $485,000 in equity; in Northern California, the comparable figure is $481,000.

Even markets in the hard-hit industrial Midwest are holding up well. In Detroit, equity for 10-year owners is more than $10,000; that figure jumps to $60,000 for 15-year owners and to $78,000 for 20-year owners. In Indianapolis, the 10-, 15-, and 20-year equity gains are $19,000, $47,000, and $68,000, respectively.

The data clearly show that homeownership remains the biggest store of wealth for the typical household, even when markets are buffeted by some admittedly very rocky years.

SOURCE: http://www.realtor.org/rmonews_and_commentary/articles/2009/0906_equity_snapshots#authorbio