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.  

Whether you plan to put your home on the market next week or next year, here is a short list of  home maintenance items you should put on your Spring to-do list, stat, if you want to attract qualified buyers and let your home sweet-talk them into making a sweet offer:

1. Banish chips, scuffs and the like with a fresh coat of paint. I believe that eliminating nicks, scuffs and scratches on any painted or finished surface is one of the cheapest, easiest and most impactful spruces a seller-to-be can do.  That’s because these little tiny blemishes create a shabby appearance on a home that might otherwise be in great shape, but can be entirely banished with a good washing and some fresh paint.

This goes for interior and exterior walls, floors, and especially any sort of trims that are painted white, as is common with crown and floor moldings - scuff marks and blemishes seem to pop out from these items. Also, the edges of cupboards, doors and drawers are places where chips and nicks are so common that homeowners overlook them, but can be super visible to buyers who visit your home for the first time.

2. Brighten, polish and replace all trims.  One day, I’ll do a scientific study, and I predict the results will reveal that if you put two identical homes side-by-side and give one a set of tricked-out trims - exterior shutters, front door, eaves - even your house numbers, door knockers, kickplates and other exterior hardware - people will rate the house with the beautiful trims way higher on the ‘pride of ownership’ scale than you’d expect.

Go stand on your own curb to get the buyer’s-eye view of your home, and then drive around your own neighborhood or the nicest part of town and flip through some home improvement mags or websites for ideas.  If you can add attractive trims, freshen up the ones you have or paint them to create an unexpected but attractive color combination with the body of your house, you can skyrocket your home’s standing on my (newly invented) ‘pride of ownership’ scale.

3. Furry, drippy, noisy or broken HVAC systems. Maintaining your heating and air conditioning systems is not that expensive, but buyers think it is. In fact, your furnace  and AC are precisely the sort of major household machinery that intimidate first-time home buyers.  So, if they show up to the open house or a private showing of your home in June and the AC is making a funny knocking sound or just flat out doesn’t work well enough to keep the house cool, buyers might perceive that as a more serious red flag than it truly is.

Does your AC has that furry ‘science experiment’ look to it? Not only are you paying for the energy it’s probably wasting to push the air pass all that dust and dirt, the gross-out factor will have even the hardiest buyer wondering what else might be wrong with your home.

On the flip side, letting prospective buyers know that your home’s HVAC systems have been recently maintained or upgraded is a nice touch that makes itself obvious during showings and allows buyers to breathe a sigh of relief when it comes to concerns about short-term repair bills and the comfort level of family members who may have allergies and asthma.

Side note: if your AC does make a funny sound you might be so accustomed to you can’t hear it anymore - check in with your agent unless you know as a matter of fact that your AC is in tip-top shape. One more side note: if you live someplace where it gets cold around the holidays and you don’t plan to list your home until wintertime, right now may be the ideal time to have your heating system serviced. Off-season repairs and maintenance are often discounted.

4. Mend and tend to your fences, gates and screens. These items may not jump out at us in our own home - in fact, these are things I often see sellers skimp on or run out of time and money to tend to. And it’s easy to rationalize your way out of dealing with them, as they seem like relatively inexpensive fixes for buyers to make themselves.  But screens with holes in them and gates that don’t budge or hang off their hinges are precisely the sorts of things I’ve seen make buyers walk back through a home looking for other flaws; and anything to do with fences makes them envision neighbor disputes over bills.  You have the power to avoid sparking these concerns in the minds of house hunters by mending these items this Spring.

5. Doors, cupboards and drawers. One creaky door or squeaky cupboard does not kill a deal. But keep in mind that in some homes, other than the lights, these are the only functioning systems of your home that house hunting visitors will almost certainly use during the course of a viewing. Making sure your entry, interior closet and cupboard doors are in good cosmetic shape and that they work well and don’t stick is an easy, inexpensive way to position your home as a (literally) well-oiled machine.

One point of clarification – it’s less the case that buyers will notice, ooh and ahh over your smoothly sliding drawers than that they will notice and grow concerned if they don’t.

6. Have everything cleaned and washed. Even the most immaculate of housekeepers can realize a massive refresh to the look, feel, smell and the overall air quality of their homes by having professional cleaners come take a tour through the place. Springtime is a great time to ask your agent for referrals to the best local vendors to power wash your house, windows and driveway, as well as to have your carpets, rugs and window coverings cleaned. For those who are on a tight budget, many vendors offer Spring cleaning promotions for these services right about now (and if your budget is even tighter, there are products you can buy and machines you can rent to do these things yourself – just make sure you account for the value of your time).

7. Shred it up.  Some might say this is more like Spring cleaning than home maintenance, but I’ve noticed that the clutter of boxes and boxes of paperwork, old file cabinets and the like have a tendency to contribute to the sense that a listed property might be unkempt, the aura of  stagnation. If you have no cash to do anything else on this list, one thing you can do for free is to go through all your files and boxes, get rid of old papers and shred anything with sensitive information.

Just think – you’ll have to do it anyway when you move, so this is like giving yourself a head start and your attic, basement office or other rooms a fresh start. You can count it as a staging tactic as well, as it gives the rooms at issue some added visual white space, making them seem larger!


Thanks to Trulia Real Estate for these helpful tips!

Foreclosure-to-rentals may be on the way

This from the Los Angeles Times -

The Federal Reserve has released a policy statement that could encourage the practice of converting lender-owned repossessed homes into rental properties.
By converting foreclosures to rentals and creating a steady cash flow, not to mention homes that are no longer sitting vacant, banks could reduce the number of their "substandard assets," a classification used by banking regulators to determine the health of banks.
The central bank also said in its statement Thursday that lenders could receive Community Reinvestment Act credit for providing housing to low- and moderate-income people by successfully converting foreclosed homes into rentals.
Taken together, the policies could help encourage a nascent move to turn banks' foreclosure inventory into rental properties and then sell those homes to investors.
Earlier this year the Fed released a housing market white paper arguing that removing some of the barriers for converting foreclosures could help stabilize the housing market.  Rental properties have become pricier and harder to find as the housing/mortgage market suffered.
Bank of America Corp. last month rolled out a foreclosure-to-rental pilot program for 1,000 homeowners who are headed into foreclosure in Nevada, Arizona and New York.  Bank of America officials have said it will forgive the mortgages of troubled borrowers participating in this pilot program through transactions called "deed-in-lieu of foreclosure" and then strike rental contracts with those borrowers.  Bank of America will then sell those rental properties to investors.
Wall Street hedge funds and private equity firms are positioning themselves to snap up these rental units.

What do you think?  Good idea?  Should this have been done sooner? Share your thoughts.

Advice to Buyers for 2012

Get pre-qualified and if credit is an issue – clean it up!  Don’t wait for time to solve an issue that you should take control of today.  There are professionals who can guide you through the steps to raise your credit score.  This is a major element of prequalification and while banks are offering low mortgage rates, they have tightened up their lending criteria.  Most offers on real estate won’t be considered without a pre-approval.   And make sure its from a reputable lending institution.

Massachusetts Home Sales Up for Seventh Straight Month

This article appeared in March 1, 2012 Martha's Vineyard Times:

Home sale prices fell again in January as sales rose for the seventh straight month, according to the Massachusetts Association of Realtors.  Sales in January were up 3.7% over January 2011.

The median selling price for a single-family home in Massachusetts last month was $265,000, a drop of 5% from January 2011.  The association also reported that detached single-family homes stayed on the market an average of 128 days in January 2012 compared to an average of 120 days in January 2011.

"With each month of improved economic news, buyer confidence continues to build," association president Trisha McCarthy, said in a statement Tuesday to the State House News Service.  "It is this confidence combined with the ongoing low interest rates and home affordability that will lead to a real estate market recovery."