Real Estate Information

Home price gains arelooking to slow according to a recent study that examined the health of the national housing industry. Data compiled from nearly 400 metropolitan areas, which comprises more than 80% of the United States housing market, suggests that the double digit price increases are expected to slack by upwards of 6.5% by the end of March 2014.

The study, derived from data supplied by CoreLogic Case-Shiller indicates that home prices had jumped more than 12% from July 2012 and July 2013. Several factors have fueled that impressive growth including record affordability, an improving job market, and comparatively small inventories of new and existing homes on the market. Some areas are certainly doing better than others, however.

The study highlights those five states that have seen the most impressive growth in housing prices over the previous 12 months and include: Nevada (27% increase), California (23.2% increase), Arizona (17% increase), Wyoming (16.4% increase) and Oregon (15% increase).

However, home price gainsare looking to slow during the second half of the year, according to the data. Dr. David Stiff, chief economist for CoreLogic, cites historical seasonal demand levels, which finds most people nesting during the holidays as opposed to house hunting, and rising mortgage rates as the leading causes for the temporary damper on the housing recovery.

Despite the anticipated slowing, Stiff and others are confident that the housing recovery has resiliency. He notes that in those areas where prices have taken a southward trajectory, he anticipates that they will reverse direction by the year’s end. Additionally, short shrift was paid to the idea that the nation was headed for yet another housing bubble in the face of impressive housing gains.

“Housing prices remain 26% below their peak nationally and are even lower in some metro areas,” said Stiff in dismissing the fear.

A recent survey done by Longwood University and published in the Wall Street Journal, the answer says its a lot, as in $25,000 worth of a lot.  The results show that an experienced agent will net you about $25,000 more than an agent with little or no experience.  At the Rob Levy team, we have been selling homes in Portland since 1988.  We ARE experienced.

You can see the report here...  http://online.wsj.com/article/SB10001424127887324123004579057500395585922.html

Just about everyone took a hit when the housing bubble popped and the federal government was no different. As proof, the Federal Housing Administration has racked up more than three billion in losses associated with insuring nearly a fifth of all home loans during the time that the housing market was in free fall. In an effort to recoup their losses, the agency has instituted a new mortgage insurance policy that makes low down payment options from private lenders for first-time homebuyers an increasingly attractive option.

For the past couple years, the FHA has been slowly nudging up the costs of homeownership by periodically raising mortgage-insurance premiums however, in June of this year they instituted a policy that can significantly raise the long term cost of buying a home by requiring that borrowers maintain mortgage-insurance coverage over the entire life of the loan. Previously, this requirement was lifted after 22% of the value of the home was paid off and the risk of default was significantly lowered.

With these new provisos in place, exploring low down payment options from private lenders for first-time homebuyers can potentially save thousands of dollars off the total cost of the loan. As always, FHA loans are attractive because of their 3.5% low down payment requirements and the ability of those parties with less-than-stellar credit to obtain financing.

That being said, for those with the financial wherewithal to pony up the additional funds for a down payment that are mandated by private lenders, typically between 5% and 10%, a conventional loan from a private lender may be the most affordable entry into home ownership due to the increasing costs associated with an FHA loan.

It has been estimated that a first time homebuyer would stand to save more than $13,000 over the FHA borrower after a decade of steady payments. With private lenders looking to reassert themselves in the housing market, their entry provides low down payments options from private lenders for first-time homebuyers as a way of countering costly fee hikes associated with getting an FHA loan.

People who are thinking of putting their home on the market often ponder completing some home improvement projects beforehand. When choosing the right projects to complete, Realtor® magazine recommends exterior improvements over interior ones, because these greatly increase the curb appeal of a home.

Unless a home looks well maintained on the outside, potential buyers are unlikely to want to see the inside. As a result, improving curb appeal will not only help a home sell faster, but will increase the amount of money a property is able to fetch as well.

Some improvements tend to provide a greater return on investment than others do. At the top of projects listed by Realtor® magazine is adding a new steel entry door. This not only gives the front of the home a new look, but also provides a sense of security for new buyers. It is also one of the least expensive repairs to complete, and will provide an estimated 85.6% return on investment.

Siding replacement is one of the more expensive improvements, but it also provides a lucrative ROI.  Most homeowners can expect to recoup around 79.3 percent of the investment they make in new siding. These figures are for new fiber cement siding, but consumers could expect similar results when choosing vinyl, aluminum, or wood siding as well.

Adding a new deck is one way to make sure a home stands out from similar properties.  The addition of a deck will provide anywhere from a 77 to 85 percent return on investment. According to MSN, a deck appeals to potential buyers because they perceive it to be additional living space. Homeowners benefit because adding a deck costs less than a room addition costs. In order to realize the greatest benefit, How Stuff Works recommends a 16 by 20 foot deck made from pressure treated lumber.

Garage door replacement and window replacement are also top improvements to consider. Both of these help to improve a home’s appearance, thereby attracting potential buyers. Buyers are often encouraged by the fact that these improvements help increase a home’s energy efficiency.

When getting property ready to sell, homeowners can’t go wrong when they make some of these exterior home improvements. Doing so could mean the difference between a house that sells quickly over one that remains on the market for several months.

In a recent article printed by the Associated Press, statistics showed that home sales on new homes hit a five-year high during the month of May. The Department of Commerce tracks these figures, and claims that May saw a 2.1 percent increase when compared to statistics for April. This was an incredible 29 percent increase over the same month only one year ago.

The seasonally adjusted numbers showed annual sales of around 476,000 homes. This is the highest number since July 2008. Although there was an increase, the number is still below what economists consider healthy for the economy. Nonetheless, this means that the housing market may finally be on the upswing.

CNN reports that the S & P/Case-Shiller Home Price Indices improved by 12.1% in April. The S & P Indices are the leading method of measuring residential real estate prices in the United States. National figures as well as those from 20 different metropolitan regions are compiled when making these calculations. As such, an increase here serves as proof that housing prices are indeed continuing to increase.

The fact that home prices are increasing along with mortgage rates that have slightly increased could have spurred a number of buyers into action. Many who had been waiting for the so-called “right time” to buy have realized that they had better act soon in order to snatch up prime real estate with historically low-monthly payments attached.

Buyers also seem encouraged by the fact that foreclosures are down over one year ago. This is giving consumers peace of mind because they do not have to worry about whether or not the previous owners took good care of an available property. New home construction is also up, which means that potential homeowners also realize they have more choices than they would have had only a few short months ago.

The fact that home sales are up also means that more and more people are finding themselves able to qualify for a mortgage loan. Right now is still an excellent time to invest in real estate, so those who have been putting off doing so should contact a Realtor® soon to discuss their options.

Buying a home can be a time of both anxiety and excitement. Home buyers that know about the terminology associated with home ownership have a better chance of fending off some of that anxiety. Pre-approval and pre-qualification are two of the most confusing terms when buying a home. Knowing the difference between pre-approval vs. pre-qualified allows buyers to understand what their agreement with the financial institution is, as well as what kind of house they can afford.

Pre-qualification

This step simply involves looking at the buyer's finances and estimating how much they can afford to spend on a house. Items like income, assets, down payment, and debts are taken into consideration. There is no commitment involved with a pre-qualification. The buyers are not obligated to purchase a home, and the financial institution is not obligated to give the buyers a loan. Pre-qualification does not include an in-depth look at the buyer's finances or an evaluation of their credit report. It simply lets the buyers know if home ownership is an option and the range of prices they can look at. Pre-qualification is a relatively short process and there is usually no cost to the buyer.

Pre-approval

When trying to look ahead at your loan options, pre-approval takes pre-qualification a step further. In this step, the lender does an extensive evaluation of the buyer's financial history, including their credit report. Instead of just telling the lender what their income, assets, and debts are, buyers are required to provide some documentation. Payroll records, bank statements, and other records are often required to proceed with a pre-approval. A pre-approval usually includes an application fee and is a tentative agreement from a lender stating that the buyer will be given mortgage financing. It is important to understand that a pre-approval is not a mortgage guarantee. A mortgage application is only guaranteed after a title search, appraisal, and other financial verifications are established. Since the pre-approval already takes many financial situations into consideration, the pre-approval status is very attractive to sellers. In situations where multiple offers are presented, buyers with pre-approval will often get selected over buyers that haven't established financing.

There are advantages to completing both of these steps, and it is important to remember that buyers always have the option of choosing a different lender. Just because one lender performed a pre-qualification does not mean that the buyer has to continue with that lender for the pre-approval and mortgage. Shopping around sometimes reveals better interest rates or a lender that better represents the buyer's wishes and communication style.

It is also important to note that the terms pre-approval and pre-qualification sometimes get interchanged by either lenders or other real estate professionals. Knowing the difference between pre-approval vs. pre-qualified can help buyers take control of their home ownership situation.

The housing market is showing more signs of recovery according to recent reports. This publication reports that home prices hit their highest point in seven years, increasing more than 12.2% in May over the same month in 2012. The jump was the biggest one in more than seven years, suggesting that the housing market bubble may have finally burst.

CoreLogic, a provider of real estate data, reported that home prices increased in 48 states in May. The only states to see a decline in home prices were Alabama and Delaware. In addition, 97 out of the top 100 cities in America also reported an increase in home prices.

Western states showed substantial gains when compared to the rest of the nation. The state with the highest gains was Nevada, which saw a 26 percent increase. California followed with a 20.2 percent increase; Arizona, 16.9 percent; Hawaii, 16.1 percent; and Oregon, 15.5 percent.

May 2013 was also the 15^th consecutive month in which home values improved. The increase between April and May amounted to a 2.6 percent increase. Even so, home prices are still around 20% lower than they were at their peak in April 2006.

The increase in home prices is largely due to the fact that there have been more buyers in recent months.  Encouraged by unusually low interest rates, many people have decided not to put off purchasing real estate any longer.  That fact, coupled with a fewer number of foreclosures on the market, has caused home prices to increase again.

Not only are more houses selling, but fewer of them fall into the category of “distressed homes” than in the recent past.  Distressed homes are those that have previously been affected by foreclosure or a short sale, which involves selling a home for less than the amount owed on a mortgage. This is good news for consumers who might have concerns about purchasing a home, but did not want to contend with the potential problems a distressed property might bring.

Over the next few months, experts anticipate another increase in home sales, since a record number of real estate purchase contracts were signed in June. Now is an excellent time to invest in real estate, so those who have been putting it off may want to go ahead and contact The Rob Levy Team and jump on this opportunity.

Here’s an important seller’s tip: securing a water heater is required in most Western states. Since an earthquake can toss these appliances around, lawmakers now require them to be strapped down securely enough to withstand this disaster.

Water heaters are relatively easy to secure by using a DIY strapping kit purchased from a local hardware store. This kit normally contains either metal or nylon straps that go around both the top and bottom of a water heater tank. These kits also contain tension bolts, washers, spacers and screws to aid in wall attachment. Retailers offer different sized kits to accommodate different sizes of tanks.

Installation begins with securing one end of each strap to the wall. If the wall is concrete, this could involve drilling into the concrete and then installing concrete anchors. Water heaters that are quite a distance from the wall could require the placement of wooden blocks on them.

If you wrap the straps at least one full rotation around the water heater tank you will insure its stability. Begin at the back of the tank and then wrap towards the front. Once this is accomplished, tighten the straps down so that the water heater does not rock back and forth when pressed on from either side.

In addition to straps, a water heater should also contain flexible hoses. Made from coiled stainless steel, they flex whenever the appliance is shifted from side to side. They prevent the additional damage that could come from a broken hose or gas line.

Laws in earthquake-prone states mandate this seller’s tip: securing a water heater is required before placing your property on the market. A home inspection should include checking the water heater to insure its safety in the event of an earthquake. Securing a water heater is easy to do, and provides peace of mind for everyone involved.

Mortgage rates are on the rise according to some news sources. Oregon Live reports that the average rates on a 15-year fixed mortgage escalated above the three percent mark in late May. This was the first occurrence in more than a year, but many feel this rise in interest rates is only the beginning.

Freddie Mac  reported that the average rate on a 15-year mortgage was 3.03% at the end of May. This was an increase from an all-time low rate of 2.56%. 30-year mortgages saw rates rise from 3.3% in early May to 3.91% at the end of that month. According to Doug Duncan, a chief economist with Fannie Mae, mortgage rates are unlikely to ever be that low again.

One of the reasons for record low rates was that the Federal Reserve had been purchasing around $85 billion a month in mortgage-backed securities and treasury bonds. This resulted in mortgage lenders being able to offer their loans at record low interest rates while still making a hefty profit. The Federal Reserve never intended these rates to carry on indefinitely, but rather were to taper off later this year. That timeframe has since been moved up to late summer or early fall.

Although mortgage rates have risen somewhat, they have nonetheless stayed low enough to help stimulate an increase in home purchases during 2012. In addition, home sales and market values have both increased across the country during the past two months.

Since mortgage rates are on the rise, potential buyers should strongly consider whether or not to take advantage of these lower rates. There are numerous advantages to purchasing now, and many people could find it in their best interest to go ahead and invest in the American dream of home ownership.

Recent data shows that foreclosure activity was down in April when compared with  last year. Foreclosures in March and April remained nearly the same, yet there were significantly fewer of them in 2013 than during the same period in 2012.

Foreclosures numbered around 52,000 in April compared to around 62,000 just a year ago. This reflects a 16% decrease in the number of repossessed properties in a 12-month period. Across the country, more than 1.1 million homes are currently in foreclosure. This represents approximately 2.8% of all homes with a mortgage. The total number of homes in foreclosure by June of last year was more than 1.5 million.

The decrease in foreclosures is partly due to an increase in home loan modifications that have made it possible for more people to retain their property. This in turn has resulted in a slight increase in home values. More people have also been applying for loans in recent months, which is a sign that the economy is finally on the upswing.

Some areas of the country have seen more than their share of foreclosures during the recent past. Five states have collectively seen more than half the new foreclosures over the past 12 months. These states are Florida, Georgia, Texas, California and Michigan.

Tracking changes in foreclosure numbers has been difficult in Oregon, as new legislation has changed the way lenders file these proceedings. Our state has seen a decrease in the number of foreclosures, and foreclosures make up about 2.9 percent of all mortgaged homes, compared to 3.2 percent just one year ago.

The fact that foreclosure activity is down in April from last year is good news for both buyers and sellers, because it means there are more buyers available, and they have a better quality selection to choose from. A drop in foreclosure rates is also good for the economy at large, which means that everyone benefits from it.