Good news on the real estate value front

Home Prices Show Strongest Gain in 6 Years: NAR

By: Mark Lieberman, Five Star Institute Economist 05/22/2012

Existing-home sales rose to 4.62 million (seasonally adjusted annualized rate) in April from a downwardly revised March rate of 4.47 million, the National Association of Realtors (NAR) reported Tuesday. Economists had forecast the April sales pace would be 4.66 million.
The median price of an existing home climbed 10.1 percent to $177,400 from $161,100 in April 2011, the strongest year-to-year gain since January 2006. The median price in April reached its highest level since July 2010 when it was $182,100.
The inventory of homes for sale in April rose to 2.54 million, the highest level since last November, bringing the months’ supply of homes on the market to 6.6.
The 10.0 percent yearly gain in the sales rate was the strongest since October when sales were up 14.0 percent year-over-year.
Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 28 percent of April sales (17 percent were foreclosures and 11 percent were short sales), down from 29 percent in March and 37 percent in April 2011, the NAR said. Foreclosures sold for an average discount of 21 percent below market value in April (compared with an average discount of 19 percent in March), while short sales were discounted 14 percent in April compared with 16 percent in March.
The months’ supply of existing homes for sale remains well below the July 2010 cyclical peak of 12.4 which had been the highest level since 1982. Inventories as tracked by the NAR are 20.3 percent below their year ago level. However, anecdotal evidence suggests there is still a large “shadow” inventory of homes available for sale, especially bank-owned properties.
Regionally, existing-home sales rose in April in every region of the country led by a 5.1 percent month-to-month increase in the Northeast where sales were up19.2 percent over April 2011. Sales rose 4.4 percent over March in the West (a 7.3 percent year-year gain), 3.5 percent in the South (6.5 percent year-year) and 1.0 percent in the Midwest (14.4 percent year over year).
The median price of an existing home rose month-to-month and year-to-year in all four regions. At $256,600, the median price of an existing home reached its highest level since August 2010. The median price of an existing home in the South rose to $153,400, the highest level since July 2010 and the median price of an existing home in the West rose to $221,700, also the highest since July 2010.
The year-to-year price gain in the West, 15.9 percent, was the strongest since November 2005. The year-to-year price increase in the Northeast was the first since last June.

©2012 DS News. All Rights Reserved.

Stay tuned for local real estate news!

3 Ways Your Loan Officer Should Be Helping You

Your Loan Officer should have one goal in mind - getting you into your new home as quickly as possible and with ease!  Here are 3 ways you should expect them to help you:

1. No Surprises.  A good loan officer should be in constant communication with you.  You should never be surprised if there is a hold up or delay that might ultimately affect your closing, still, your loan officer should communicate with you at every step throughout the process.
2. Solutions, Not Problems.  A good loan officer is behind the scenes solving problems.  He/she will run interference and do everything to keep your closing on schedule.  If it's something you need to do, you should be notified right away so that you can do your part in following through and keeping everyone's stress level at a minimum.
3.  A bag of tricks.  Your loan office should have multiple opportunities for financing so that finding the right one for you is easily possible.  He/she should be able to completely explain the mortgage program you select and how it will be to live with your mortgage while you live in your new home.  This means knowing you in addition to their mortgage products.

Don't be intimidated!  It can seem daunting and complicated, but a good loan officer (and a good Realtor) will make every step of the way an easy step for you.

I was asked by our local newspaper to answer the following questions and thought I'd share:

What advice do you have for 1st time homebuyers in the current market?

Get yourself pre-approved and start looking.  A good mortgage broker/banker can advise you on any issues that may exist on your credit and how to make improvements. There is a lot of home inventory right now and mortgage rates continue to be low.  There are some first time homebuyer mortgage packages available as well – investigate!  Know the market, and your limitations so that you feel comfortable (and excited) about your new home purchase.  A real estate professional is essential in working through all the steps with you!

What advice do you have for sellers in the current market?

If you have to sell, price your home competitively.  Buyers are educated.  They know what your house should sell for.  You don’t want to be “chasing down the market”, which means you haven’t adjusted the price of your home to reflect what is happening in your marketplace.  Know your competition and think about what it costs you (in real dollars) to maintain a higher price.  If it takes 6 months to sell – what did that cost you, and would you have been better off to reduce your price in order to avoid those costs?  Selling is an emotional thing; recognize that and cut yourself some slack about how you’re feeling.  You will feel better when you accept that offer and begin to plan for the future.

What insight do you have on how the market will perform in the next year, given that it's an election year and other factors?

The pressure is on to keep the mortgage rates low, to stimulate the economy and show improvement in the many factors that impact housing.  Unemployment numbers are around 8.2%, GNP numbers are hovering around 2% and these indicators are not strong enough to support any statements about the economy improving on a long-term basis.  That will be the task and the major subject of the presidential campaign.  The administration will push for improvements in all segments to assist in their platform, whether Republican or Democrat.  Buyers and sellers can benefit from this.  Normally, prices are higher when interest rates are lower – we haven’t seen that in the last few years.  We may see those days return, so now is an optimum time to buy.  On the flip side, if you don’t need to sell and can hang on for a year or so, do that, and see how the market reflects the political demographic that will come with the election.