Tuesday, January 23, 2007
When the housing market slows, sellers know it can be a lot tougher to turn their property into a buyer magnet. With more homes on the market and increased pressure on pricing, buyers have more power in the process.
For-sale-by-owner transaction have fallen over the past decade to 12 percent of all sales today from 18 percent in 1997, says the NATIONAL ASSOCIATION OF REALTORS®.
NAR spokesman Walter Molony says sellers believe real estate practitioners are better equipped to achieve fast sales at top dollar in a weak market, adding that the median price for agent-assisted transactions was about 16 percent higher than FSBO sales last year. Practitioners orchestrate showings, handle paperwork, and identify serious buyers for sellers, Moloney says.
NAR's 2006 Profile of Home Buyers and Sellers shows that 5 percent of sales from mid-2005 to mid-2006 involved FSBO sellers turning to a real estate professional, with only 1 percent of sales involving sellers who abandoned their practitioner to go it alone.
Source: Investor's Business Daily, Brad Kelly (01/19/07)
© Copyright 2006
Saturday, January 13, 2007
Interest on 30-year fixed-rate mortgages jumped to 6.21 percent this week — the highest point since the middle of November, according to Freddie Mac. The rate was up from 6.18 percent the week prior and 6.15 percent a year earlier.
The mortgage finance company also reported a rise in 15-year fixed loans to 5.96 — from 5.94 percent one week ago and 5.71 percent a year ago.
Five-year and one-year adjustable-rate mortgages drifted higher as well. One-year ARMs averaged 5.44 percent this week compared to 5.42 percent last week and 5.15 percent a year earlier. Five-year ARMs weighed in at 6.03 percent, up from 6.02 percent the previous week and 5.76 percent during that same period in 2006.
Source: San Diego Union-Tribune (01/12/07) © Copyright 2006
Demand for home loans swelled 16.6 percent during the week ended Jan. 5, according to the Mortgage Bankers Association.
Requests for purchase loans were up 16.2 percent and refinancing applications rose 17.3 percent.
The strong recovery compares with a 14 percent slide in application volume before Christmas and only a small improvement of 3.6 percent just after the holiday.
Observers say the higher demand for mortgages could signal an impending recovery or that it could be just a fluke — even though the MBA numbers were seasonally adjusted to account for the New Year's holiday.
"I don't think we should talk about a boom for many, many years, but I think this bodes well for the housing industry and economy," says Tapan Munroe, director of the global consulting firm LECG LLC.
Source: Contra Costa Times, Barbara E. Hernandez (01/11/07)© Copyright 2006 Information Inc.
Even in today’s uncertain climate, a hands-on real estate investor can make money with smaller properties that are easy to acquire and manage.
Here are some suggestions to get started:
- Rent out a part of your own home for $400 a month and use that money every month to pay down mortgage principal. Shaving 10 years from a $350,000, 30-year mortgage will reduce total payments by more than $165,000. And you will be able to write off all your costs on your income taxes, including depreciation on the unit, up to your actual rental income.
- If buying a single family home, make sure you can put 10 percent down and rent the property for more than your monthly payment, interest, taxes, insurance, and a $200 expense budget. Low-balling a foreclosed home owned by a lender is one way to find such a property.
- Consider buying a two-family home, where you’ll make nearly twice as much in rent for a property costing little or no more than a single family.
Source: The Wall Street Journal, David Crook (01/10/07)
After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turn around by summer, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.
Annual totals for existing-home sales in 2007 will be comparable to 2006, says David Lereah, NAR’s chief economist.
“Keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,” Lereah said. “We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it’ll be pretty much of a wash in terms of annual totals.”
The good news, he says, is that a steady improvement in sales will support price appreciation moving forward.
2006 Sales Third-Highest on Record
Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.
Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.
The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent, far below earlier consensus forecasts.
“The current interest rate environment and housing inventory levels present a window of opportunity for potential buyers,” Lereah says.
The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3 percent in 2007 to $248,900.
Soft Landing for Housing
“With all the wild projections by academics, Wall Street analysts, and others in the media, it appears that much of the housing sector is experiencing a soft landing,” Lereah says. “Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you're in it for the long haul, housing is a sound investment.”
The unemployment rate is likely to average 4.8 percent in 2007, following a rate of 4.6 percent in 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent in 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent in 2007, compared with 3.3 percent last year.
Inflation-adjusted disposable personal income should grow 3.4 percent this year, following a rise of 2.7 percent in 2006.
Source: The National Association of Realtors
The most expensive house sold in 2006 was an English-style, 10,000-square-foot Alpine, N.J., mansion with guest cottages, pool, and tennis courts, according to the Institute for Luxury Home Marketing.
The price tag for the 63-acre estate five miles from Manhattan: $58 million. Advanced Photonix CEO Richard Kurtz bought this year’s top seller from Henry Clay Frick II.
In 2005, the priciest house was an oceanfront estate that sold for $70 million to Ron Perelman of Palm Beach, Fla.
The Institute for Luxury Home Marketing estimates — from not-yet-complete data — that 2006 sales of homes priced at $5 million and above were up about 11 percent over 2005. And at least 10 buyers throughout the country were willing to shell out $28 million or more for high-end residences last year.
Source: Dow Jones Business News, Amy Hoak (01/08/07)
A home in need of repair can be a good deal, especially if buyers are able to do some of the repairs themselves.
Here are three major things to think about when considering a home in need of major improvements:
- Location, location location. Is the lot well located with good topography? Will the improvements you propose make it worth as much as — not a lot more — than other homes in the neighborhood?
- How much? Calculate what the home would sell for if it were in great shape. Subtract the cost of repairs, then take off another 10 to 15 percent for unexpected problems. If you can’t get the property for that, then it's probably a bad deal.
- Prepare for the mess. Get ready for renovations to take longer than expected. Also, know the cost and realize that your life will be disrupted if you need to live somewhere else while the work is being completed.
Source: Charlotte Observer, Kathy Haight (01/08/07)
Mark Nash, the Chicago-based real estate broker who penned 1,001 Tips for Buying and Selling a Home (Thomson/South-Western, 2004), has released a list of home features that remain popular among buyers and those that are no longer in vogue. His list is based on responses from more than 900 real estate professionals nationwide.
For example, practitioners surveyed reported that the inability to keep stainless steel appliances, glass-front cabinets, and vessel-style sinks clean has caused them to fall out of favor with buyers. Also, spiral staircases have become less popular, particularly among buyers with young children.
As for what's "in," Nash found buyers are increasingly looking for some of the following features in homes:
- Glass bathroom and kitchen tiles.
- His-and-her home offices complete with fiber-optic cables for Internet connectivity.
- Wood floors — except for those made of bamboo, which is not as durable.
- Extra storage space in the form of linen closets, pantries, and luggage rooms.
With a large supply of unsold homes on the market, the practitioners surveyed noted that buyers have become pickier and expect homes to be in move-in condition.
Source: Washington Post, Kirstin Downey (01/06/07)
© Copyright 2006 Information Inc.
Wednesday, January 10, 2007
Brookings, SD Real Estate Listing #07-13
List Price $122,900
Sold Price $126,900
Are you tired of paying rent? Then make your payments count by investing in this 1994 ranch style home that has everything you could want, plus room to grow! Vinyl siding, Double stall garge, 3 bedrooms, 2 baths, and an unfinished basement are just a few features to mention. The Sellers are giving a credit of $4,713.00 for the installation of a complete drain tile system.
Monday, January 8, 2007
Brookings, SD Real Estate Listing #06-771
List Price $279,900
This home is currently under construction. It will be a very spacious Split-Foyer house featuring over 3000 sq. ft. of finished area. The main level totals 1577 sq. ft. featuring a Master bedroom suite, second bedroom, full hall bath, kitchen, dining area and living room. The lower level will include over 1500 sq. ft. of finish. The lower level finish will offer a large family room, three additional bedrooms, a full bath and utility room.
For more information, room dimensions and progessive pictures visit the following link and click on listing #06-771: http://www.brookingshomes.com/220.htm
Investors are eyeing slower-growing markets to invest their money into and are beginning to bypass the coastal regions that have traditionally seen higher-appreciating markets.
Institutional investors figure they are better off investing in a market with just a 1 percentage point better annual return than paying a premium for property in a traditionally higher appreciating market. They hope to make their money back in stable rents, says Tripp Hardin, a principal at Trammell Crow Krombach Partners who specializes in office and light-industrial investment market.
Steady income on a well-priced property is especially attractive to companies looking for long-term cash flow, says Michael Cagna, a senior research associate with Colliers Turley Martin Tucker in Indianapolis. Cagna just published a study of Midwest markets as investment destinations.
"Along the coast, investors basically have to flip the property because their carrying costs are so much higher," Cagna says. "Here, their money goes farther, and they have to invest much less so they can hold on to the property longer."
Source: St. Louis Post-Dispatch, Riddhi Trivedi-St. Clair (01/04/07)
Selling a home during the cold-weather months can be a challenge. Here are some tips for handling a sale in the dark winter months:
- Don’t wait for spring. Point out to sellers that postponing can be the wrong choice when it means they must continue to pay the mortgage, insurance, and utility bills.
- Get rid of the holiday decorations. “Holiday decor says to buyers that you aren’t prepared to move out so they can move in. It clutters and detracts from the home,” says Mark Nash, a real estate professional and author of the forthcoming book, Real Estate A-Z for Buying & Selling a Home.
- Clean and light. Render the place dust-free and if necessary paint the walls with a light color. Linen tones are often the best.
- Be creative. Nash, who sells homes in Chicago, had success last year selling an ordinary house quickly after he displayed poster-size photos of the home’s garden in full bloom near the windows.
- Be realistic. No amount of creative marketing can overcome an overly steep price tag.
Source: Universal Press Syndicate, Ellen James Martin (01/04/07)
How to Prevent an Epidemic of Foreclosures
With Colorado leading the country in mortgage foreclosures for most of 2006, lawmakers in the state are looking for ways to curb practices that leave home owners in financial ruin and neighborhoods in the grip of blight. Lawmakers in other states are looking for solutions to their foreclosure problems, too.
Experts are suggesting a number of steps to authorities to address the factors that lead to foreclosures. Among them:
- Restrict risky loans, especially 100 percent loans that are based on stated income rather than pay stubs.
- Restrict deceptive and confusing advertising for loans. Particularly egregious are loans that tout rates “as low as 1 percent for fixed loans,” with the details in fine print explaining that these are one-month teaser rates.
- Look at appraisers. Appraisers pushing for a valuation to meet a mortgage broker’s demand are a problem in some cases.
- License and train mortgage brokers, and bar brokers with fraud and felony convictions from the business.
- Educate buyers and assist them before they end up in foreclosure.
Source: The Denver Post, Greg Griffin, David Olinger, Aldo Svaldi, and Jeff Roberts (12/31/06)
Saturday, January 6, 2007
In a scam known as shotgunning, thieves are applying for multiple home loans simultaneously. When they get the money — sometimes millions — they take it and leave the country.
Authorities are blaming Eastern Europeans affiliated with what is known as the Russian Mafia. "It's the fraud of the year," says Paul Doman, director of Title Insurance Co.’s Lenders Advantage Equity Division. "They can pull in excess of a million dollars out of the home, enough so they can live a good life back wherever they came from."
First American and other title companies are trying to stop this and other schemes by forming a consortium in which applications for title searches are run through each other's systems. That way, multiple applications on the same property can be spotted before rather than after the fact.
Source: United Feature Syndicate, Lew Sichelman (12/31/06)
List Price $35,000
List Price $171,900
Immaculate, single owner, ranch home in DeSmet, SD with over 3000 sq.ft. finished, built in 1983. The addition, with full basement, was completed in 1996. This home features 4 bedrooms, 2 baths, 2 gas fireplaces and a nicely finished basement. The garage provides 4 stalls for the hobbyist or 4 frost-free cars. This real estate is a must see. Call today to schedule a showing.
For more information and a full photo tour Click Link:
List Price $134,900
This is a great opportunity to purchase your country home with hobby potential. The ranch style home is situated on 6.6 beautifully matured acres. This property includes 4 outbuildings, of which, one is a hobby/work shop supplied with H2O and electric. This is a great real estate value located in awesome hunting and fishing territory near Oldham, Brookings, and Madison, SD.
For more information and a full photo tour follow the link below:
BEST CHOICE REAL ESTATE - (800) 788-8323