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National Home Sales Tick Up!

by Galand Haas

Good Monday Morning!

Finally, some good news from the National Association of Realtors.  Nationally, home sales were up 3.7 percent for the month of April.  This is extremely good news because of the fact that homes sales had been on a long term skid downwards.  NAR is not predicting a 5% to 10% increase in homes sales nationally this year.  

The Real Estate market both nationally and locally can be affected by consumer confidence.  Anytime positive information comes about it has a significant impact in this market.  Many times good news brings about even more good news.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

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86040 Cherokee Drive
Price: $775,000 Beds: 6 Baths: 4 ∏ Baths: 1 Sq Ft: 4300
Gorgeous, secluded rolling hills setting in Cherokee Hills. Heart of wine country. Open beam ceilings, brick fireplace, 2 master suites. All brand new. Tudor Style home with 4 car garage. Just minutes from town....



AND HERE'S YOUR MONDAY MORNING COFFEE!! 

Sincerely,
Galand

What's In Store For the 2011 Housing Market?

by Galand Haas

Good Monday Morning!

Happy New Year!  It's hard to believe that 2011 is less than a week away.

What is in store for the national housing market for 2011?  Is it just more of the same or will we see a rebound?  Well, the experts at the National Association of Realtors think it's a combination of both.

According to the NAR experts look for a dismal December 2010 followed by 3 quarters of continued home value declines across the nation in all housing markets.  Some markets will certainly be hIt much harder than others.  The decline in sales and home values should be less severe than what most of us witnessed in 2010.  NAR also predicts that by the 4th quarter of 2011 the pent up demand for housing will begin turning the market around and that sales will begin to increase and stabilize pricing.  This prediction comes from the fact that the nations population has grown by almost 10 million since the beginning of the housing market slowdown and this has created a significant pent up demand for housing in many markets.  

Locally, our Eugene and Springfield area market will almost certainly follow the national trend. Whether our market sees any kind of rebound in 2011 may depend more on the local economy than on population growth.  Any way you look at it, 2011 will be full of surprises as the Federal government tries to turn the housing market around with a variety of tactics.  Let's just hope that whatever they do next year has better success than the past.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

 

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202 Foxtail
Price: $185,000 Beds: 2 Baths: 2 ∏ Baths: 1 Sq Ft: 1744
Very classy condo in wonderful natural setting with a great 2-level floor plan. Offering a spacious living rm, open dining area, well-designed kitchen & cozy family rm with access to a deck. The upstairs master features a lovely vanity, private bath...



AND HERE'S YOUR MONDAY MORNING COFFEE!! 

Sincerely,
Galand

Monday Morning Real Estate Update 8/19/07

by Galand Haas

Galand Haas,

Good Monday Morning!

A little rain was a pleasant surprise.  It was great to settle the dust and water the plants.  More Summer is on the way!

The latest quarterly survey by the National Association of REALTORS® shows that home price trends are improving in metropolitan areas. But existing-home sales are below where they were a year ago in most states.

In the second quarter, NAR reported 97 of 149 metropolitan statistical areas showed year-over-year increases in median existing single-family home prices.

Total state existing-home sales are down 10.8 percent from a 6.63 million-unit pace in the second quarter of 2006.

The largest singe-family home price increases were seen in the Salt Lake City area, Binghamton, N.Y. and Salem, Ore. The best total sales performance on existing home sales were seen in: Wyoming, Iowa, North Dakota, Oklahoma, Indiana and Nebraska.   

Have An Awesome Week!



AND HERE'S YOUR MONDAY MORNING COFFEE!!

Sincerely,
Galand

January Home Sales Improve Nationally

by Galand Haas
 
Existing-Home Sales Improve in January
WASHINGTON, February 27, 2007 - 

Sales of existing homes rose in January, reaching the highest level in seven months, according to the National Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.0 percent to a seasonally adjusted annual rate1 of 6.46 million units in January from an upwardly revised pace of 6.27 million in December.  Sales were 4.3 percent below the 6.75 million-unit level in January 2006.

David Lereah, NAR’s chief economist, said observers shouldn’t overreact to the sales gain, or to other short-term effects.  “Although we’re expecting existing-home sales to gradually rise this year, and buyers are responding to the price correction, some unusually warm weather helped boost sales in January,” he said.  “On the flip side, the winter storms that disrupted so much of the country in February could negatively impact the housing market.

“Although the data is seasonally adjusted, these weather events are unusually large – many transaction closings were postponed in February, and home shopping was essentially shut down for about a week in many areas,” he said.  “We shouldn’t be surprised to see a near-term sales dip, but that will be followed by a continuing recovery in home sales.”

Total housing inventory levels rose 2.9 percent at the end of January to 3.55 million existing homes available for sale, which represents a 6.6-month supply at the current sales pace – unchanged from the revised December level.  Supplies peaked at 7.4 months in October.  “Inventories are looking better, but price softness should continue until spring when the market is expected to become more balanced,” Lereah said.

The national median existing-home price2 for all housing types was $210,600 in January, down 3.1 percent from January 2006 when the median was $217,400.  The median is a typical market price where half of the homes sold for more and half sold for less.

NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said a broader view shows the housing market stabilizing.  “The market is trending up from its low last fall, and that is important in restoring confidence to buyers who’ve been on the sidelines,” said Combs.  “Since buyers can find more favorable terms, and they are looking for a place to call home for some years to come, getting into the market now make sense because it’s a choice many didn’t have during the boom period of bidding wars in much of the country.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.22 percent in January, up from 6.14 percent in December; the rate was 6.15 percent in January 2006.

Single-family home sales rose 3.5 percent to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.50 million in December, but were 4.2 percent below the 5.94 million-unit level in January 2006.  The median existing single-family home price was $209,200 in January, down 3.5 percent from a year earlier.

Existing condominium and cooperative housing sales slipped 0.1 percent to a seasonally adjusted annual rate of 767,000 units in January from a downwardly revised pace of 768,000 in December.  Last month’s sales activity was 5.7 percent below the 813,000-unit pace in January 2006.  The median existing condo price3 was $222,200 in January, up 0.5 percent from a year ago.

Regionally, existing-home sales in the West rose 5.6 percent to an annual pace of 1.32 million in January but were 9.6 percent lower than a year ago.  The median price in the West was $321,300, down 4.6 percent from January 2006.

In the Midwest, existing-home sales increased 4.8 percent in January to a level of 1.53 million, and were 0.6 percent lower than January 2006.  The median price in the Midwest was $162,600, which is 3.5 percent below a year ago.

Existing-home sales in the South rose 2.0 percent to an annual sales rate of 2.54 million in January, but were 7.3 percent below a year ago.  The median price in the South was $174,600, which is 1.7 percent below January 2006.

Existing-home sales in the Northeast were at a level of 1.07 million in January, unchanged from December, and were 5.9 percent higher than January 2006.  The median existing-home price in the Northeast was $260,700, down 1.2 percent from a year earlier.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months.  Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity.  For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns.

Each February, NAR Research incorporates a review of seasonal activity factors and fine-tunes historic data for the previous three years based on the most recent findings.  Revisions have been made to monthly seasonally adjusted annual sales rates for 2004 through 2006, as well as the inventory month's supply data.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings.  This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit.  Because of these differences, it is not uncommon for each series to move in different directions in the same month.  In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

2 The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns.  Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

Existing-home sales for February will be released March 23.  The next Pending Home Sales Index will be on March 6 and the forecast will be revised March 13.

3 Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price.  In a given market area, condos typically cost less than single-family homes.

Statistical data, charts and surveys also may be found by clicking on Research

Home Sales Forcast to Rise in '07

by Galand Haas

 

--------------------------------------------------------------------------------
 
 
Forecast: Steady sales to boost home prices in '07
Builders will cut construction to offset inventory surplus
Wednesday, January 10, 2007

Inman News

 
After bottoming out in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer, bringing modest price increases, according to the latest forecast by the National Association of Realtors.

David Lereah, NAR's chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. "We have to 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," he 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 is that the steady improvement in sales will support price appreciation moving forward."

Existing-home sales for 2006 are expected to come in at 6.5 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.

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.

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 said.

"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 said. "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 this year, following a rate of 4.6 percent in 2006, according to NAR. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent 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, the survey found.

National Home Market Stabilizing

by Galand Haas

Monday, January 08, 2007

By Dian Hymer
Inman News 
 

 

David Lereah, chief economist for the National Association of Realtors, recently said that the home sale market has started to stabilize and could even turn around by spring 2007. Other economists are less optimistic.

Ken Rosen, a noted real estate forecaster, predicts that it will take about three years for the San Francisco Bay Area housing market to turn around. Leslie Appleton Young, chief economist for the California Association of Realtors, thinks it will take 18 months for the California market to recover. But, in a recent survey conducted by WSJ.com, the Wall Street Journal's Web site, economists by a margin of 2 to 1 predicted that the worst was over for the housing market.

The opinions about the direction of home prices are equally diverse. Rosen sees home prices dropping by about 8 percent in the San Francisco Bay Area and 11 percent in Miami over the next few years. NAR predicts increases in home prices next year. Some think we've already hit bottom; others think we haven't hit bottom yet.

 
After this cycle is over, we'll be able to look back and pick the point at which excess inventory disappeared and home buyers were back in force. Until then it's anyone's guess as to exactly what the housing market will look like over the next few years.

Diverse opinions about the housing market are not unusual. For the last several years, many economists predicted interest rates in the 7 percent range for 30-year fixed-rate mortgages. But, that didn't materialize. In fact, lower rates fueled a hot market in which home prices rose at historic rates in many areas. This was at a time when most economists were sure that home prices had peaked.

Even though most housing experts would not recommend buying at the top of a market cycle, last years' home buyers bought with reckless abandon, confident that home prices could go nowhere but up. Now that conditions are generally better for home buyers, many are waiting on the sidelines for a clear sign that the market has bottomed out.

Most people feel more comfortable buying when there is a lot of home-buying activity. However, savvy real estate investors take a different approach. They buy when the market is soft and sell when the market is hot.

However, home buying and selling decisions are rarely based simply on whether it's the best time to buy or sell. This is because the "investor" is buying a property that will also function as a home.

Few home sellers who are happy in their current home sell just because the market is strong. On the other hand, no matter how content you are in your home, if your job moves elsewhere, you could find yourself having to sell in a soft market. Lifestyle factors impact home buying and selling decisions.

HOUSE HUNTING TIP: If you have the luxury of picking the time to buy or sell a home, you should first carefully analyze the housing market in your local area. It can be misleading to rely on a forecast that deals with the national housing market, or even a smaller regional market like the San Francisco Bay Area.

There are pockets of strength where demand is high and inventory low even in the midst of markets that are otherwise stagnant or declining. And, some markets like Utah and Washington state aren't declining at all.

THE CLOSING: When you have a grip on local market conditions, you'll be better able to decide if it makes sense to move now or to wait. But, keep in mind that waiting could cost you more if you're a buyer and yield you less if you're a seller, depending on how long you wait.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
 
 

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Mortgage Originations Projected to Drop Through 2008

Fewer mortgages will be written in 2007 because of higher interest rates and a slowing housing market, predicts the Mortgage Bankers Association.

MBA Chief Economist Douglas G. Duncan told the Associated Press that markets are normalizing after historically low interest rates spurred record numbers of home owners to buy and refinance.

The Washington, D.C.-based trade group says it expects the total value of new mortgages and refinanced mortgages to drop 5 percent this year to $2.39 trillion from $2.51 trillion in 2006. The association projected a further drop of 4 percent to $2.29 trillion in 2008 as fewer home owners refinance their mortgage.

Mortgage originations had already declined 17 percent in 2006 from more than $3 trillion in 2005, a near-record year.

Source: The Associated Press, Eileen Alt Powell (01/09/07)
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What to Know Before Buying a Fixer-Upper

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 lots of 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. Know that your life will be disrupted if you can’t afford to live somewhere else while the work is being completed.

Source: Charlotte Observer, Kathy Haight (01/08/07)
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30-Year Mortgage Rates Hold, Others Mixed

The financial markets during the first week of the year were still trying to determine how much the economy is likely to slowdown, according to experts. For the second consecutive week, Freddie Mac reported 30-year fixed loans averaged 6.18 percent.

However, other rates remained mixed. Interest on 15-year, fixed mortgages rose slightly to 5.94 percent, rates on five-year adjustable-rate mortgages moved up to 6.02 percent, and one-year ARMs slipped to 5.42 percent.

"Currently, the market is waiting for a clearer signal on the direction in which the economy is headed," says Frank Nothaft, Freddie Mac chief economist. Rates on 30-year loans declined over much of the second half of 2006 as the housing market continued to falter.

Source: St. Paul Pioneer Press, Martin Crutsinger (01/05/07)

© Copyright 2006 Information Inc.
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5 Tips for Selling a House in Foul Weather

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)
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 Borrowers eye benefits of FHA home loans
Product offers lower rates, better choices than subprime sector
Monday, January 08, 2007

By Jack Guttentag
Inman News 
 

 

"What type of borrower finds it advantageous to take an FHA loan?"

The answer to this question is a little different today than in 2000 when I first addressed it because FHA's market niche is smaller. This reflects developments in the conventional sector that have not been matched by FHA, including the growth in popularity of loans with no down payment, interest-only monthly payments, and option ARMs. Reflecting these developments, FHA's market share fell from about 15 percent in 2000 to about 5 percent in 2006.

The FHA Market Niche in 2006. An FHA borrower:

 

Has blemished credit acceptable to FHA, but not strong enough for prime pricing in the conventional market.


Doesn't need a loan larger than the FHA maximum, which varies by county. (In 2006, it ranged from $200,160 to $362,790 in the highest-cost counties.)


Can put 3 percent down in cash.


Doesn't want an interest-only mortgage or an option ARM.

Credit Requirements: At risk of oversimplifying, credit standards in the conventional market range from A+ to D-, and within that range, FHA would be about B- or C+.

FHA credit requirements overlap the higher levels of subprime requirements. A good illustration is the underwriting rules applicable to a prior foreclosure. With exceptions, FHA won't accept a loan applicant who has had a foreclosure within the prior three years. Subprime lenders may have a three-year rule for their best credit grade, but the period scales down by degrees and might be only one year for the lowest grade.

Similarly, the maximum ratio of total debt service to income acceptable to FHA is 41 percent, which is generally high relative to prime standards, but well below what passes in the nonprime sector.

A borrower who meets FHA credit standards will usually do better with an FHA loan than with a subprime loan, despite having to pay a mortgage insurance premium. The rate will be lower, the borrower will have access to a large menu of mortgages, and there are no prepayment penalties. Most mortgages in the subprime market are 2-year adjustables with large margins, which means a high probability of a rate increase after two years, and they have prepayment penalties, usually for three years.

Loan Limits: The loan limits on FHAs are a major deterrent. HUD has asked Congress to allow the same loan amounts on FHAs as on loans purchased by Freddie Mac and Fannie Mae. In 2006, this would have meant an increase to $417,000 uniform across the country.

Down Payment Requirements: In 2000, FHA's 3 percent down payment compared with 5 percent on most conventional loan programs. In 2006, however, zero-down loans were widely available in the conventional sector, while the FHA minimum of 3 percent remained unchanged. Since zero-down loans have long been available under the VA program, FHA is now the only sector that does not have them.

This disadvantage of FHA is partially offset by down-payment-assistance programs available to FHA borrowers. One form of such assistance is second mortgages at preferential rates, which is the preferred method of public agencies at the city, county or state levels. These agencies have their own eligibility rules independent of FHA.

A second form of assistance is cash contributions from nonprofit corporations. These have no repayment obligation, but the funds provided come from home sellers who take account of the contribution in setting their sales prices.

Neither type of assistance is a good substitute for a zero-down program, a bill for which was introduced in Congress in 2004. So far, however, it has not been passed.

Interest-Only Mortgages and Option ARMs. These instruments exploded in popularity after 2000, but were not available under FHA and there is little likelihood that they ever will.

Prospects For a Revival in FHA's Market Share. Congressional authorization of no-down-payment loans and a rise in loan limits would increase FHA's market share. So would an increase in public awareness that some subprime borrowers would qualify for, and do better with FHA loans.

A marked increase in FHA's market share would result from an explosion in foreclosures, which would cause a drastic restriction of lending terms in the conventional sector. This is not something I would care to see, but if it happened we will be pleased that FHA was there to help cushion the blow.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.
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What's Hot and What's Not in Home Design

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, practitioners note 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.

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Keller Williams Realty Eugene and Springfield
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