Thursday, August 30, 2007

Daily Real Estate News | August 30, 2007

Markets Where a Flipper Can Make a Buck

Flipping went out of fashion last year, leaving thousands of flippers in trouble in many areas, but an analysis by Forbes magazine shows that there are markets all over the country where investors can still turn a profit if they pick their properties wisely.

Forbes calculated whether a market is ripe for flipping by using data from Moody's to calculate a market's rate of sales against inventory, and to determine supply and demand. Then it looked at current and new-home construction numbers through the end of 2008, based on data from the National Association of Home Builders; the magazine sought out markets where planned new home construction is low.

Then Forbes used price appreciation data from the NATIONAL ASSOCIATION OF REALTORS® to get a sense of short-term market direction. Finally, it examined Moody's figures on investor share. The higher the share of investors, the more sellers outweigh buyers, which is bad news in a bearish market.

The results identified the following markets as the best candidates for flipping. Here are the best markets, along with the price in each market that would make a home a candidate for a quick turnover.

1. Seattle, $385,000
2. San Francisco, $759,000
3. Raleigh, N.C., $225,000
4. Houston, $150,000
5. Austin, Texas, $175,000
6. San Antonio, $150,000
7. Boston, $389,000
8. Los Angeles, $590,000
9. New York, $489,000
10. Portland, Ore., $295,000

Source: Forbes, Matt Woolsey (07/26/2007)

Daily Real Estate News | August 30, 2007

Lead-Based Paint Still a Serious Concern

Highly toxic lead-based paint was banned in 1978 but remains in about 24 million housing units, says the Centers for Disease Control and Prevention.

In 1992, Congress passed a law requiring the EPA to write a regulation that would implement mandatory training for renovation contractors. The EPA didn’t even propose the regulation until 2006 and hasn’t yet adopted it.

EPA spokeswoman Enesta Jones says the EPA is currently gathering and reviewing feedback about its proposed "Lead Renovation, Repair, and Painting Program" and hopes to issue a final rule by early 2008.

Under the EPA's proposed regulations, contractors working in most pre-1978 homes would be trained in the use of lead-safe work practices; renovators and firms would be certified; and training providers would be accredited.

The EPA recommends that anyone renovating a home built before 1978 test their home for potential lead hazards. The agency also warns against using belt sanders, propane torches, high-temperature heat guns, dry scrapers or dry sandpaper because they could create lead dust and fumes.

Work areas should be sealed off completely.

Once the renovation is complete, a clearance examination performed by a contractor is necessary to check for harmful levels of lead-contaminated dust.

Source: USA Today, Angela Haupt (08/29/2007)

Daily Real Estate News | August 29, 2007

Mortgage Applications Decline Even as Rates Drop

Last week was another slow week for the mortgage business with the Market Composite Index, a measure of loan application volume, falling 4 percent on a seasonally adjusted basis to 615.2 from 641.1 the previous week.

On an unadjusted basis, the index decreased 5.3 percent compared with the previous week, but it was up 10.6 percent compared with the same week one year earlier.

The refinance share of mortgage activity increased to 40.4 percent of total applications from 39.9 percent the previous week.

The average interest rate for 30-year fixed-rate mortgages decreased to 6.41 percent from 6.49 percent. The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.10 from 6.20 percent. The average interest rate for one-year ARMs increased to 6.51 from 5.84 percent.

Source: REALTOR® Magazine Online

Daily Real Estate News | August 28, 2007

Mortgage Ads Send Mixed Messages

Dozens of mortgage lenders have shut down their subprime operations, but you wouldn’t know it from Internet and television advertising where lenders are declaring, "Bad Credit? Call Today!”

"It's been a common feature of advertising," says Allen Fishbein, director of housing and credit policy at the Consumer Federation of America. "They offer their products not around interest rates but among monthly payments, ease of access, among 'you're more likely to get a yes with us than with others.' I don't think that has changed in this environment."

Lenders are defending themselves. "It's important to point out that there are loan options available for borrowers with lower credit scores in today's market," Darren Beck, senior vice president of marketing for, told the Boston Globe.

While there's nothing wrong with lending money to people with bad credit, government officials are concerned about independent mortgage brokers who try to trick people into purchasing properties they can't really afford, says David Nahmias, U.S. attorney for the Northern District of Georgia, who has worked on mortgage fraud cases.

The Federal Trade Commission continues to investigate any cases of lending institutions misleading people with their mortgage-related advertising, says Peggy Twohig, associate director for the division of financial practices at the agency. "It depends on exactly what they say, how they say it, how big and bold things are titled, and what is said in the small print,” she notes.

Source: Boston Globe, Nancy Trejos (08/25/07)

Tuesday, August 28, 2007

Daily Real Estate News | August 27, 2007

Mortgage Interest Tax Deduction Falls Under Fire

Rep. John Dingell (D-Mich.) recently confirmed his plans to roll out legislation in September to wipe out an existing tax break for owners of large houses.

Under the measure, owners of residences measuring 3,000 square feet or bigger — as many as 8.6 million residential properties nationwide, according to 2003 federal government data — no longer would be able to claim a tax deduction on mortgage interest. Dingell's aim is to discourage wasteful energy use and help curtail pollution tied to climate change.

But housing industry officials warn that the current slump in the sector makes now a particularly challenging time to tinker with the deduction.

Doing so "would have repercussions for the housing market as a whole," according to Mary Trupo, NATIONAL ASSOCIATION OF REALTORS® spokeswoman.

Source: Deseret Morning News (Utah) (08/27/07)

Monday, August 27, 2007

Daily Real Estate News | August 24, 2007

Mortgage Rates Drop to Three-Month Lows
Freddie Mac reported that 30-year fixed home loans moved down this week to 6.52 percent, from 6.62 percent a week ago. That's the lowest level in three months. Meanwhile, interest rates on 15-year fixed mortgages dropped to 6.18 percent from last week's average of 6.3 percent.
Source: San Diego Union-Tribune (08/24/07)

Thursday, August 23, 2007

Daily Real Estate News | August 23, 2007

Presidential Hopefuls Weigh In on Credit Crunch

What to do about the credit crunch? How to deal with the lackluster housing market? Those are two hot questions for presidential candidates.

Here’s what the candidates have said about the issue of housing and mortgage credit:

  • Sen. Joseph R. Biden Jr. seeks hedge fund transparency.
  • Sen. Hillary Rodham Clinton (N.Y.) urges more “truth in lending” such as plain-talk, no fine-print disclosures for new home owners.
  • Sen. Christopher J. Dodd (Conn.) advocates an end to prepayment penalties and extension of Fannie Mae and Freddie Mac’s role.
  • Former senator John Edwards (N.C.) wants to change the bankruptcy laws to allow filers to shed mortgage debt.
  • Sen. Barack Obama (Ill.) seeks a federal fund to bail out home owners in foreclosure. The money would come from penalties invoked upon irresponsible lenders.


  • Former New York mayor Rudolph W. Giuliani doesn’t support government intervention, but does think there should be more transparency in the process.
  • Sen. John McCain (Ariz.) suggests more education and some help for those who are in foreclosure because they were misled.
  • Former Mass. Gov. Mitt Romney believes the government should simplify the mortgage process, ensure strong oversight and punish those who are “bad actors.”

Source: The Washington Post, Jeffrey H. Birnhaum (08/23/2007)

Wednesday, August 22, 2007

Daily Real Estate News | August 22, 2007

Mortgage Crisis: What Went Wrong?

Nearly 2 million mortgages are scheduled for rate increases this fall and that’s expected to send foreclosures soaring.

President Bush has blamed the failure of borrowers to read the fine print. But many experts say the problem runs much deeper. The mortgage business has long been a tug of war between a social commitment to broad homeownership and the efforts of private financial operators to earn money.

Robert Kuttner, co-editor of The American Prospect and a senior fellow at Demos, a New York-based think tank, says the government should resume directly subsidizing starter mortgages and construction of homes for moderate-income buyers. He says these programs need to combine careful credit assessment with counseling, rather than relying totally on the private mortgage industry. He says he also would prevent irresponsible, speculative lenders from selling mortgages in the secondary market.

“We've now had an experiment in the claims made for mortgage deregulation, extending over three decades, and deregulation flunked," Kuttner says. "America needs to restore a system in which government supports homeownership — and makes sure that mortgage lenders serve as responsible creditors, not predators.”

Source: The Associated Press, Nathan K. Martin (08/19/07)

Tuesday, August 21, 2007

Daily Real Estate News | August 21, 2007

Foreclosure Rate Continues to Climb Nationally

Foreclosure filings rose 9 percent from June to July and were up 93 percent year-over-year, according to RealtyTrac Inc., which tracks and sells foreclosures.

Five states — California, Florida, Michigan, Ohio, and Georgia — accounted for more than half of the total foreclosure filings, according to RealtyTrac CEO James J. Saccacio. However, Florida's foreclosure filings fell 9 percent between June and July.

Nevada had the highest foreclosure rate, one filing for every 199 households.

The national foreclosure rate in July was one filing for every 693 households, according to RealtyTrac.

— REALTOR® Magazine Online

Monday, August 20, 2007

Daily Real Estate News | August 20, 2007

Time Shares Selling at Record Pace

Times shares are selling at a record pace, according reports from people in the industry. Florida is particularly hot.

David Siegel, CEO of Central Florida Investments, which owns the Westgate Resorts time-share group, says sales have risen 25 percent this year over last. In addition, a recently released study by Price Waterhouse Coopers reports that sales of new time shares in Florida rose from $1.6 billion in 2002 to $2.6 billion in 2005.

Howard Nusbaum, president of the American Resort Development Association, says people have become comfortable with the idea of owning a week-a-year property, rather than the whole thing.

"The baby boom and those that follow them … these are people who are used to buying pizza by the slice," he says.

Uncertain economic times contribute to the appeal of time shares, because they lock in the cost of a vacation. “These are affordable investments that can be financed over five to seven years," says Peter Yesawich, chairman of Ypartnership, which markets timeshare for developers. "They are also seen as a hedge against the future inflated cost of vacations."

Source: Orlando Sentinel, Christopher Boyd (08/19/2007)

Daily Real Estate News | August 20, 2007

Landscaped Lots 'Very Important' to Buyers

The housing downturn has many builders, real estate agents, and home sellers paying close attention to landscaping as a way to generate buyer interest and boost sales prices.

Research by the NATIONAL ASSOCIATION OF REALTORS® says landscaping is "very important" to almost 20 percent of buyers, and University of Washington-Seattle researcher Kathleen Wolf says landscaped lots sell for about 7 percent more.

The exact amount depends on location, with Palm Beach, Fla.-based real estate agent Nancy Macaluso noting that palm trees and flowers can boost a home's price by 10 percent to 15 percent in comparison to the sales prices of properties without such landscaping.

However, most appraisers and tax assessors do not include landscaping in their valuations; and there are no standards governing how arborists and landscape experts calculate a plant's value.

Still, home owners are shelling out hundreds of dollars for yard appraisals as part of their marketing strategies, and builders are expanding their landscaping budgets.

Experts say sellers would be wise to maintain their yards, as unkempt trees and shrubs can conceal views that have the potential to boost sales prices by tens of thousands of dollars.

Source: Wall Street Journal, June Fletcher (08/17/07)

Daily Real Estate News | August 17, 2007

30-Year Mortgages Inch Up This Week

A jump in interest rates has ended a three-week run in lower borrowing costs, reports Freddie Mac. According to the mortgage finance giant, the average interest on 30-year fixed loans rose to 6.62 percent this week from 6.59 percent last week.

Meanwhile, the rate for the 15-year fixed mortgages, which are common in refinances, floated up to 6.3 percent from 6.25 percent over the one-week period. Also on the rise were five-year adjustable-rate mortgages, which nudged up to 6.35 percent from 6.33 percent, and one-year ARMs, which bumped up to 5.67 percent from 5.65 percent.

Source: San Jose Mercury News (Calif.), Martin Crutsinger (08/17/07)

Daily Real Estate News | August 16, 2007

Best Vacation-Home Spots for Price Growth

Buying a vacation home in a blue-chip locale is a safe bet if you're looking for solid price growth, according to, which compiled a list of the five fastest-appreciating regional vacation areas in the West, Midwest, East Coast, and South.

The magazine selected the areas with help from, a Rhode Island-based real estate research site. NeighborhoodScout pinpointed neighborhoods with desirable locations, near beaches, lakes, or mountains, and with amenities and services that cater to a vacationing crowd. Then it identified which locales had the fastest median home price appreciation over the past five years.

The village of Water Mill, N.Y., in Bridgehampton, appreciated the fastest. The median home price there is $1.38 million; it increased in value at an average of 21 percent a year over the last five years. In the Midwest, Victoria, Minn., which is surrounded by lakes, grew an average of 18 percent a year.

The north end of Key Largo, Fla., has appreciated at 27 percent a year, on average, making it the fastest-growing vacation spot in the South. Moran, Wyo., situated between Grand Teton and Yellowstone National Parks, has seen 35 percent average increases in annual value since 2002, putting it at the top of appreciation in the West.

Here are the top five destinations in the key regions and the median price of property there.

1. Water Mill, Bridgehampton, N.Y., $1.38 million
2. Avalon, N.J., $1.25 million
3. Napeague/Amagansett, East Hampton, N.Y., $862,129
4. Borough Center, New Hope, Pa., $647,041
5. Orange Street/Union Street, Nantucket, Mass., $1.57 million

1. Moran, Wyo., $1.13 million
2. Emerald Bay, Laguna Beach, Calif., $2.8 million
3. Sunnyside-Tahoe City, Calif., $2.8 million
4. Stateline, Carson City, Nev., $1.3 million
5. Wailea-Makena, Hawaii, $1.75 million

1. Victoria, Minn., $435,000
2. Martell/Olivet, River Falls, Wis., $271,063
3. City Center, Orr, Minn., $281,998
4. Blue Mounds, Wis., $280,000
5. Jenkins, Pine River, Minn., $380,000

1. North Key Largo, Key Largo, Fla., $2.8 million
2. Pine Ridge/Pelican Bay, Naples, Fla., $1.6 million
3. Captiva, Fla., $2.1 million
4. Unison/Philomont, Bluemont, Va., $804,298
5. Williamsburg, Va., $949,900

Source:, Matt Woolsey (08/09/07)

Wednesday, August 15, 2007

Daily Real Estate News | August 15, 2007

Finding a Mortgage Is Getting Tougher

Borrowers with good credit but without 5 or 10 percent to put down are likely to be shocked at the rate they're offered, if they're offered a mortgage at all.

Lenders are eliminating certain products altogether as well as requiring higher credit scores and down payments, more extensive appraisals, larger savings accounts, and additional income verification.

To Washington state appraiser Bill Hanson, the shift is dramatic. He says lenders are "asking for unrelated information, such as permit numbers for remodeling work," he says. "Before they would ask: 'Is the home still there and does the roof leak?'"

"We thought the dust was going to settle, but instead, it just blew up," says Mitchell Reiner, president of Mortgage Associates, a Los Angeles-based lender that does business in 48 states. "Everyone is being affected."

Source: The Wall Street Journal, Jonathan Karp (08/14/2007)

Daily Real Estate News | August 15, 2007

Women Call Shots When House Hunting

U.S. women control or influence $7 trillion in consumer spending annually and make 85 percent of all purchase decisions, according to marketing experts. Single women accounted for 22 percent of all home purchases made between July 2005 and June 2006.

What do women want when they are house hunting?

Women respond best to a holistic approach when buying a house, says Richard Peterson, a psychiatrist who specializes in investment psychology. “They handle global impressions better” than men.

Men's ability to make multifaceted decisions, on the other hand, is diminished when they have to rely on "more than three to four factors," imaging studies of the brain show, Peterson says. For example, when men shop – an activity that requires dealing with an array of facts and feelings – stress hormones increase and focus dwindles.

Here are some things that work and don’t work when a woman is the customer.
  • Stimulate the senses. Men like quick factoids an bullet points, but this approach is the antithesis of a woman’s preference for seeing, touching and talking. Instead, try videos, testimonials, livability surveys, and newsletters detailing community activities.
  • Patience is key. Women like to return multiple times to a property they are considering. Each visit brings a new set of questions.
  • Enthusiasm sells. Women like to be excited about the property.
  • Spousal approval goes one way. If she likes it, chances are he’ll like it, but the opposite isn’t necessarily true.

Source: The Los Angeles Times, Diane Wedner (08/12/2007)

Tuesday, August 14, 2007

Daily Real Estate News | August 14, 2007

Foreclosure Rates Continuing to Rise Nationwide

RealtyTrac, which sells foreclosed properties nationwide, released its midyear report, showing that California and Ohio cities account for 10 of the top 20 metropolitan areas in rate of foreclosures.

Foreclosure activity appears to be moderating in parts of the country where it initially skyrocketed, including Texas and South Carolina, "but the overall trend is toward escalating foreclosure rates, with 82 of the top 100 metro areas reporting year-over-year increases in the number of homes affected by foreclosure,” says James J. Saccacio, CEO of RealtyTrac.

Here are the metropolitan areas with the top 20 rates of foreclosure from January to June 2007.

Stockton, Calif.
Detroit/Livonia/Dearborn, Mi
Las Vegas/Paradise, Nev.
Riverside/San Bernardino, Calif.
Sacramento, Calif.
Denver/Aurora, Colo.
Bakersfield, Calif.
Memphis, Tenn.
Cleveland/Lorain/Elyria/Mentor, Ohio
Fort Lauderdale, Fla.
Atlanta/Sandy Springs/Marietta, Ga.
Fort Worth/Arlington, Texas
Fresno, Calif.
Dayton, Ohio
Akron, Ohio
Oakland, Calif.
Columbus, Ohio

Source: REALTOR® Online (08/14/2007)

Daily Real Estate News | August 13, 2007

Buy Retirement Home Now, Move in Later

With prices in many areas at a low ebb, it might make good financial sense for Baby Boomers to buy their retirement homes now, even if they're still years away from actually moving. They can find renters who will pay the bills until they're ready to live there.

Here’s some advice for people who are considering this strategy:
  • Shop carefully. It's best to buy a home that can be rented for a rate that, after tax considerations, will cover the mortgage, real estate taxes, and insurance.
  • Study up on housing trends. Ask the local or state planning department for demographic and economic data. The information can reveal facts that will influence whether or not to buy. For example, big companies going out of business or military base closings can be bad news.
  • Don’t forget maintenance. Consider who’ll take care of the house in the owner’s absence. Property managers charge 6 percent to 15 percent of the monthly rent. Family members may be willing to do the job for free, but they could be ill equipped to do the job if the don't have any experience.
  • Consider financing. Boomers with sufficient equity in their current homes can tap it to either buy their retirement home outright or secure a much lower mortgage rate compared with a loan at the rate often offered to buyers of investment property.

Source: The Washington Post, Belly L. Kass, Esq. (08/11/2007)

Daily Real Estate News | August 10, 2007

Builders Sweeten the Deal With Incentives

The latest survey taken by the National Association of Home Builders indicates that 56 percent of builders are now offering incentives, up from about 45 percent a year ago.

As home builders juice up their efforts to unload inventories, the most common incentives they're offering include paying two years of property taxes and insurance or several months of mortgage payments. Other popular incentives include basement and garage upgrades and the addition of pools. Plus, 15 to 20 percent off the purchase price is being given in many areas.

Builders generally try to avoid outright price markdowns, in part because it angers prior home buyers who don't want prices in their subdivisions forced down. These days, however, some builders have had to resort to them "because it's all about avoiding bankruptcy for some," says Gene Rivers, a Keller Williams associate in Tallahassee, Fla.

Getting a Good Deal

Here are some tips for getting the best deals from builders:
  • Buy a finished home: Builders want these off their books.
  • Get a pre-approval letter: This shows a builder that the buyer has financing already in place.
  • Close quickly: Wrap up a purchase within 30 days; builders want to sell before the next bank payment is due.
  • Avoid contingencies: Don't make a purchase contingent on selling a home or finding financing.

Source: The Wall Street Journal, Jeff D. Opdyke (08/09/07)

Thursday, August 9, 2007

Daily Real Estate News | August 9, 2007

Inventory's Still Rising in Most U.S. Markets

The number of homes on the market in the 18 major U.S. metro areas rose 1.2 percent in July from the previous month, and were up 19 percent from a year earlier, according to a report by real estate Web site ZipRealty, based in Emeryville, Calif.

While the inventory is still keeping a lid on prices in most areas, the supply of unsold homes didn't increase as rapidly in July as it has been, says ZipRealty CEO Pat Lashinsky.

The biggest increase was 6.1 percent in Seattle, which until now hasn’t been much affected by the housing slowdown. Sellers are reluctant to trim their asking prices, and "buyers are sitting on the sidelines, trying to figure out what's going on," he told The Wall Street Journal.

Meanwhile, the Boston metro area showed a decline of 2.8 percent in July. Here’s how inventory is moving in ZipRealty’s 18 key cities:
  • Baltimore +3.6 percent
  • Boston -2.8
  • Chicago +1.2
  • Dallas -0.1
  • Houston +0.7
  • Las Vegas +3.0
  • Los Angeles +3.0
  • Miami +0.2
  • Minneapolis -0.2
  • Orange County, Calif. +2.0
  • Orlando, Fla. +0.8
  • Phoenix +0.5
  • San Francisco +3.7
  • Sacramento, Calif. +3.0
  • Seattle +6.1
  • San Diego +2.3
  • Tampa, Fla. -0.9
  • Washington, D.C. +0.1
  • All 18 metro areas +1.2

Source: The Wall Street Journal, James R. Hagerty (08/09/2007)

Daily Real Estate News | August 8, 2007

Mortgage Apps Rise After Mid-Summer Slowdown

After a couple of down weeks, the number of mortgage applications rose 8.1 percent last week on a seasonally adjusted basis from 607.1 to 656.5, according to the Mortgage Bankers Association weekly survey.

On an unadjusted basis, the index increased 7.7 percent compared with the previous week and was up 18 percent compared with the same week a year ago.

The refinance share of mortgage activity increased slightly to 39.9 percent of total applications from 39.4 percent the previous week.

The average interest rate for 30-year fixed-rate mortgages decreased to 6.41 percent from 6.50 percent. The average interest rate for 15-year fixed-rate mortgages decreased to 6.16 from 6.20 percent. The average interest rate for one-year ARMs decreased to 5.69 from 5.73 percent.

Source: REALTOR® Magazine Online

Tuesday, August 7, 2007

Daily Real Estate News | August 7, 2007

What Buyers Want: Top Home Preferences

More home buyers want extra garage space with two or more spaces in their homes, according to the “2007 Profile of Buyers’ Home Feature Preferences,” which was released Tuesday by the NATIONAL ASSOCIATION OF REALTORS®.

The number of buyers expressing a desire for oversized garages grew 16 percentage points since NAR's last survey of buyer preferences in 2004. About 57 percent of home buyers surveyed now say they want an oversized garage. What's more, among buyers who purchased homes without big garages, 56 percent said they would have paid more for an oversized garage, compared to only 6 percent in the 2004 survey.

NAR's latest home buyer preference survey, which reports responses from buyers who purchased homes in 2006, asks buyers about the importance of 75 home features and room types.

What They're Shopping For

Other priorities for today’s home buyers include:
  • Air conditioning: three out of every four respondents surveyed ranked this as “very important.”
  • Master bedroom walk-in closet: 53 percent of buyers rated this as an important feature in a home.
  • Hardwood floors and granite countertops: each gained 7 percentage points in popularity since the 2004 survey; 28 percent and 23 percent, respectively, of buyers labeled these home features as very important.
  • Cable/satellite TV-ready: 46 percent, a growth of 6 percentage points from the 2004 survey, said this was important.
  • Energy efficiency: especially among new-home buyers — 65 percent of new-home buyers said energy efficiency home features are very important compared to 39 percent for buyers of existing homes.

Buyers also said they're willing to pay more for these extras. For example, 65 percent of buyers said they would be willing to pay a median $1,880 extra for a home with central air conditioning. One out of four buyers also was willing to pay a median of $4,760 more for waterfront property.

Regional Preferences

What home buyers want in the South, however, is not always what buyers in the West want. The survey identified some of the following regional preferences in home features:

  • Home buyers in the South and Midwest viewed central air conditioning as a priority, with 91 percent and 81 percent, respectively, saying this feature was very important.
  • Sixty-six percent of buyers in the South thought a walk-in closet in the master bedroom was very important, while 61 percent of Midwesterners valued an oversized garage.
  • In the Northeast, the highest percentage of buyers placed a premium on a backyard or play area (53 percent), followed by central air conditioning at 41 percent.
  • Two-thirds of buyers in the West want oversize garages (66 percent), followed by central air conditioning at 59 percent.

Fixing up the Nest

According to the survey, nearly six out of 10 recent home buyers took on remodeling or home improvement projects within three months of their purchase. Close to half of home buyers who remodeled or made improvements updated their kitchen, and nearly half remodeled or improved their bathroom.

New-home owners spent a median of $4,350 on home improvement or remodeling projects undertaken within three months of purchase.

“The fact that a majority of home buyers quickly remodel key areas of their homes ties into the fact that their home is a good, long-term investment,” says Paul Bishop, NAR manager of real estate research. “Regardless of market conditions in the short term, when purchased for the long term, housing is one of the safest investments consumers can make.”

Indeed, more than half of home buyers said they believe their home has high investment potential, and another four out of 10 say it has moderate investment potential. Only 3 percent felt their home’s investment potential was low.

Generational Differences

Age was the biggest differentiation in what buyers were looking for in a home. Buyers 75 years old and older wanted a single-level home (74 percent) that was less than 10 years old (43 percent) with a walk-in closet in the master bedroom (74 percent).

On the other hand, most buyers between the ages of 25-34 wanted a backyard or play area (60 percent).

More than half of buyers over 65 wanted a separate shower enclosure in the master bathroom, compared to only one-fourth of buyers ages 25-34.

Also, older buyers placed a higher priority on energy efficiency home features than did younger buyers — 63 percent of buyers 75 and older said it was very important, but only 32 percent of buyers who were 18-24 agreed.

Home Growth

Overall, the survey also revealed that while homes are getting bigger, the number of bedrooms is shrinking. From 2004 to 2006, the size of the typical home purchased increased by about 100 square feet to 1,840 square feet, while the median number of bedrooms dropped from four to three during that same period.

The median age of the home reported in the current survey is 12 years, down from 15 years in 2004.

Real estate practitioners see hundreds, if not thousands, of houses with their buyer clients every year and know exactly what buyers are looking for in a home, says NAR President Pat V. Combs. “This insight is one more way REALTORS® add value to the real estate transaction,” Combs says.

— REALTOR® Magazine Online

Daily Real Estate News | August 7, 2007

Remodelers Prefer the Old to the New

A growing number of remodelers are turning to used products, as the number of reused-material stores around the country has doubled in the last five years from 150 to 300, according to the Building Materials Reuse Association.

The stores are popular because well-made products — some of them from new construction sites and others from previous eras — can be purchased at a fraction of current retail cost.

Many of the sites are run by nonprofit organizations and get all or most of their products from donations, many of which come from homes that have been torn down or "deconstructed" instead of being demolished.

Still, not all reusable material is cheap. For instance, Mountain Lumber in Ruckersville, Va., which manufactures products from reclaimed wood, charges an average of about $3,000 for flooring for a 300-square-foot kitchen and about $8,000 for an 800-square-foot one. And that's just for the product — the company does not do installation.

Source: The Washington Post, Allan Lengel (08/04/07)

Daily Real Estate News | August 6, 2007

Pros and Cons of Living by Water

While demand never seems to disappear for waterfront property, the slowing real estate market has presented some great deals by lakes and oceans.

“The desire to look out your window and see water will always be there and will always be an added incentive for someone to purchase a home," says Richard Swerdlow, Miami-based chief executive of, an online marketplace for buying and selling condos.

But there are drawbacks to living the waterfront life. Among them: premium property prices, high insurance rates (especially if you're near a flood zone), and costly maintenance because moist air corrodes pipes and eats away at paint. But there are just as many perks.

Tonja Demoff, author of the book Bubble Proof: Real Estate Strategies That Work in Any Market, offers these five reasons for considering coastal property.
  • Ocean properties are in high demand and are often a great investment either for resale or rental income.
  • Fewer mosquitoes and insects as the ocean breezes push the critters westward.
  • Wonderful environment for children, away from the pollution of the city and a sedentary lifestyle.
  • Great exercise potential for people of all ages, be it swimming or walking along the shore or coast.
  • Ocean breezes make the hottest summer day feel cooler.

Source: Newsday, Laura Koss-Feder (08/03/2007)

Thursday, August 2, 2007

Daily Real Estate News | August 2, 2007

Tips for Renting Out a Vacation Home

A vacation property construction boom over the past few years has boosted the overall number of vacation homes, but falling home values have made renting out these homes for extra cash an appealing option.

The result is a glut of places to spend a vacation. One expert is urging home owners who want to rent out their properties to consider off-season business.

The second and third weeks of September and the third and fourth weeks of October are going to be great weeks especially in Florida; Georgia; Myrtle Beach, S.C.; Hilton Head, N.C.; the Tennessee mountains; and Branson, Mo. and the Ozarks, predicts Christine Karpinski, author of How to Rent Vacation Properties by Owner.

Karpinski has this advice for home owners considering the rental game:
  • Post lots of photos and information on your Web page. Make sure the information you provide is complete and accurate, and don't exaggerate. That will help avoid disappointment from renters who expect more than there is. "I, as a consumer, would not rent a place without seeing photos of each bedroom and the living room," she says.
  • Replace the furniture often. The normal wear and tear on upholstery and linens can prove a turn-off for vacationers. They're much more satisfied when everything is crisp and new.
  • Hire a caretaker. You need someone on-call nearby if there's distance between you and your rental property. That way, if there's a problem — the heat goes off, the oven won't light, etc. — there's someone who can offer quick problem solving.

Source: BusinessWeek Online, Maya Roney (07/18/07)

Daily Real Estate News | August 2, 2007

More Buildings Go Green

Energy efficient homes might still be the exception, but green building is gaining momentum, according to the U. S. Green Building Council and the National Association of Home Builders.

In fact, green building has become a $12 billion industry, according to USGBC estimates. A decade ago, USGBC says, its value was “negligible.”

A survey of local home building associations shows that more than 97,000 homes have been built and LEED-certified since the mid-1990s using voluntary, builder-supported green building programs nationwide. That’s a 50 percent increase since 2004 when the last survey was conducted, according to NAHB.

And the increase doesn't show any signs of slowing. The U.S. Green Building Council recently welcomed its 10,000th member into the organization, which encompasses builders, universities, government agencies, and nonprofit organizations devoted to green construction.

Both NAHB and USGBC are in the process of developing its own set of standards and guidelines for sustainable residential green construction and to further promote the green industry.

—By Camilla McLaughlin for REALTOR® Magazine Online

Daily Real Estate News | August 2, 2007

Home Values for the Top 20 Markets

The annual growth rate in prices of existing single family homes across the United States continued to decline for the 18th consecutive month in May, according to the Standard & Poor’s/Case-Shiller Home Price Index.

Overall, the top 20 cities in the index declined 2.8 percent year-over-year, although five of the cities showed increases.

Cities measured by the index where values have increased in the 12 months are Atlanta, Charlotte, Dallas, Portland, and Seattle. Detroit continues to lead the metro areas in growth rate declines, down 11.1 percent from a year ago.

Here are the top 20 metropolitan areas and the percent of change in their real estate values over the last year:
  • Atlanta: 1.7 percent
  • Boston: -4.3 percent
  • Charlotte: 7 percent
  • Chicago: -0.6 percent
  • Cleveland: -2.8 percent
  • Dallas: 1.8 percent
  • Denver: -1.4 percent
  • Detroit: -11.1 percent
  • Las Vegas: -4.1 percent
  • Los Angeles: -3.3 percent
  • Miami: -3.3 percent
  • Minneapolis: -3.5 percent
  • New York: -2.3 percent
  • Phoenix: -5.5 percent
  • Portland: 5.7 percent
  • San Diego: -7 percent
  • San Francisco: -3.4 percent
  • Seattle: 9.1 percent
  • Tampa: -6.7 percent
  • Washington, D.C.: -6.3 percent

— REALTOR® Magazine Online

Wednesday, August 1, 2007

Daily Real Estate News | August 1, 2007

NAR: Market Shows Signs of Improvement

The market is likely to stabilize in the months ahead, according to the NATIONAL ASSOCIATION OF REALTORS®’ forward-looking indicator on pending home sales.

The Pending Home Sales Index, based on contracts signed in June, was 5 percent higher from the downwardly revised May index of 97.5, but is still 8.6 percent below June 2006 when it stood at 112. Nevertheless, this 5 percent monthly gain is the largest in more than three years, since a 6.1 percent increase was recorded in March 2004.

Lawrence Yun, NAR senior economist, says it’s encouraging that the increase occurred in all four major regions of the United States. “However, it is too early to say if home sales have already passed bottom,” he says. “Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand.”

The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed.

What Happened Regionally

Here’s a breakdown of what the PHSI showed across the country:
  • West: the PHSI increased 8.6 percent in June to 103.6, but was 5.5 percent below a year ago.
  • Northeast: the index rose 3.1 percent from May to 96, which is 2.4 percent lower than June 2006.
  • South: the index increased 4.7 percent in June to 111.6, but was 12.7 percent below a year ago.
  • Midwest: the PHSI rose 3.5 percent in June to 92.5, which is 8.2 percent lower than June 2006.

— REALTOR® Magazine Online
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