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Tuesday, February 28, 2012

Single Female Households Continue To Grow

Single female households continue to grow: About 20 percent of recent home buyers were from single females, according to National Association of Realtors® data. Single female home buyers represent a growing segment of homeowners. An article at Realty Times notes the following characteristics female buyers tend to want in a new home:


Proximity to family. Female home buyers tend to say they want to live closer to their extended family than their job.

Safety. They’ll likely want to review crime trends for neighborhoods, streets, and buildings as safety tends to be a big priority for female home buyers.

Traditional use. According to a recent Coldwell Banker survey, men are four times more likely than females to turn an extra 12' x 12' foot space into an entertainment room, but females tend to be more traditional in their sense of space. Realty Times notes that while you may point out to a male home buyer all the extra rooms that can be made into media centers or entertainment rooms, a woman is more likely to respond to seeing a house how it already is. “She’ll come up with her own plans,” the article notes.

Source: Realty Times

Housing Affordability

Housing affordability rose to a record high during the fourth quarter of 2011, which means a home buyer’s purchasing power is greater than it ever has been before, according to the National Association of Home Builders Housing Opportunity Index. The index showed that 75.9 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,200, according to the index. That marks the highest percentage recorded in the index’s 20-year history. "Today's report indicates that home ownership is within reach of more households than it has been for more than two decades," says Barry Rutenberg, chairman of the National Association of Home Builders.

Source: National Association of Home Builders


Monday, February 27, 2012

The Negative Effects of Positive Growth



We have been accused of being too optimistic in our projections. For example, last year when economists were calling for a double dip recession, we downplayed this threat. When analysts have pointed towards a housing market that will not recover for years, we pointed out the economic factors which could turn things around quickly. These factors include projected population growth, increased household formulation in a recovery and continued governmental aid for the sector. Today, we are going to look at the other side of the coin. What if the economy starts to heat up from here? Certainly, the stock market is displaying strength which can be seen as the market's belief in the economy's growth potential. The fact that Europe has approved the Greek bailout package is another positive sign.

Economic growth is what everyone has been rooting for. But it does not come without risks. What are these risks? We will cite two -- the risk of inflation and the risk of higher interest rates. The Federal Reserve Board has seemed to discount the risk of inflation, but if there is no risk then why has the price of gold continued to be so strong? Gas prices are now approaching $4.00 per gallon, a price that will affect consumer purchasing power. The Fed also has told us that rates will stay low for at least two years. We need to point out that the Fed does not really "control" rates. If the economy keeps recovering, rates will rise and the Fed will have no choice but to renege on its forecast. Actually, the Fed would love to do that because that means the economy and especially the housing market is on the road to recovery. Everyone has been hoping for a stronger recovery. We just need to point out that if this recovery becomes stronger, there are negative factors we will have to deal with. If the result is more jobs and a healthy economy, it is a price worth paying. For consumers who have been waiting to purchase a home or a car -- remember that you will get no warning that rates are about to rise and the sales are over.

Source: www.newsletterproonline.com



Tuesday, February 21, 2012

Homes for Baby Boomers


Baby boomers that plan to move for retirement are looking for smaller, affordable homes that are easily accessible to medical care and near their family, according to a poll of more than 1,000 adults born between 1946 and 1964 conducted by Associated Press-LifeGoesStrong.com. Baby boomers who make more than $100,000 a year are the most likely to say they plan to buy a new home during retirement. For boomers who plan to purchase a new home, the most important factors cited in a home for retirement included:
  • Smaller home (40%)
  • Near medical offices or hospitals (39%)
  • Different climate--perhaps warmer (30%)
  • More affordable home (25%)
  • Being closer to family (15%)

 
About 10 percent of baby boomers said they will search for a new city to relocate to that offers more services for them in retirement. Only 8 percent of baby boomers surveyed say they want a larger home for retirement, the poll finds. However, more baby boomers say they don’t have any plans to move after they retire, the poll finds.

Source: The Associated Press

 

Monday, February 20, 2012

Breaking News: Housing Market

Breaking News: The government budget for this year includes a hike in the cost of insurance for Federal Housing Administration mortgage loans. It is expected that this increase will go into effect shortly, however consumers that act quickly may have the ability to beat the increase. If you are thinking about refinancing or purchasing, time is of the essence.
The U.S. housing market will begin to mount a turnaround this year, building toward a solid recovery in 2013, according to a forecast by the chief economist of a homebuilding industry trade group. The outlook by National Association of Home Builders Chief Economist David Crowe calls for U.S. sales of new homes and single-family home construction to improve this year compared with 2011, when they hit record lows. The forecast still leaves new home sales and construction well below levels of a healthy housing market, however. That reflects the severity of the industry's downturn, and suggests the housing market could be years away from full health. "I'm looking at 2012 as sort of a ramping event to get a much more solid recovery in 2013," Crowe said in a telephone interview. The economist, who gave his forecast at the trade association's annual conference in Orlando, Fla., sees sales of new, single-family homes climbing 19% this year to 360,000. Next year, he expects those sales to rise a whopping 40% to 505,000. Crowe's outlook also hinges on unemployment staying below 8.5% and the economy adding more jobs. And he's assuming that tight lending requirements will ease this year, enabling more homebuyers to qualify for financing.

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Source: Investors Business Daily
www.newsletterproonline.com

Thursday, February 16, 2012

Buying a Foreclosure


Buyers are drawn to distressed properties. After all, "the No. 1 reason to buy a foreclosure is the potential for a good bargain," says Daren Blomquist of RealtyTrac.com. Indeed, discounts often can range from to 20 or 40 percent off on a short sale or foreclosure compared to a sales price of a nondistressed home. But despite the big bargains, buyers need to tread carefully before jumping in. Blomquist provides some of the following tips in buying a foreclosure in a recent article at Business Insider.

  • Beginners may want to focus on REOs. New buyers may want to avoid short sales, which often come with lengthy negotiations or foreclosure auctions that often require all-cash payments. On the other hand, REOs, Blomquist says, can be similar to a traditional home sale in some ways and can offer some of the biggest bargains. "A bank isn't emotionally attached to a REO; it's just looking to recoup as much of its losses as possible," Blomquist told Business Insider. "So the lender is often more willing to capitulate on price."
  • Don’t forget the inspection. Many distressed properties are sold “as is” and can come with a host of problems if buyers aren’t careful. Blomquist recommends getting a home inspector to inspect the home prior to any purchase. Buyers will then have a list of any potential problems with the home, along with estimates for costs of repair. Buyers can then use the list to possibly negotiate a lower price, Blomquist says.
  • Don’t expect appreciation right away. "It's important to not make the mistake of counting on any major price appreciation in the near term," Blomquist advises buyers. "We're still in a depressed market, and we're probably not going to see home prices appreciate much for quite some time."
Source: Business Insider

Wednesday, February 15, 2012

Purchasing A Home Using Someone Else’s Money



Home ownership in America has reached record levels in the past ten years. More than two-thirds of Americans now own their own homes. This is great news for those who are pursuing the American Dream—because morepeople are achieving this dream.

Fannie Mae has conducted several American home ownership studies in the past. Among other things, they measured the desires to achieve home ownership and the impediments to achieving these desires. One would think that the major impediments to purchasing a home would be not having enough income to qualify or poor credit histories. In reality, the number one obstacle to becoming a homeowner in America is lack of capital.
Knowing the significance of this obstacle, the industry has done much to make obtaining real estate “cash friendly.” While the surging economy has provided much impetus for increasing real estate purchases, industry initiatives have really paved the way to facilitate the whole process.
In this article, we will highlight some of the ways a prospective home purchaser can obtain the capital needed to purchase his/her first or even a move-up home—

Lower down payment programs— In the old days, the VA (open only to active military and vets) and Rural Housing Programs were the only no-down payment options and FHA had a minimal (less than 5.0%) down payment requirement. Then many conventional programs decreased their down payment requirements, however, this trend has reversed itself in the past few years. Today, the VA and Rural Housing Programs still offer no down payment options and FHA is still less than 5.0% down for borrowers with good credit. In addition, some state and local housing agencies have programs that will lend or grant the money for the downpayment for qualified low-to-moderate income borrowers.

Gifts—Typically a gift from an immediate relative is allowed for a purchase transaction. In the past, only FHA and VA loans allowed what is called 100% Gifts. This term means that the total cash necessary for the transaction is allowed to come from a gift. Conventional programs typically required at least 3% to 5% of the money to come from the purchaser’s own funds.

Seller Contributions—Some of the money needed for closing costs typically can be paid by the seller in a purchase transaction. On VA loans, the seller can pay all closing costs. On FHA loans, the seller can pay up to 6.0% towards closing costs—but require a small minimum from the borrower’s funds. On minimum downpayment conventional loans, the seller can pay up to 3.0% of the sales price towards closing costs.

Lender-paid closing costs—With the advent of more complex secondary market vehicles, lenders have been able to develop more sophisticated mortgage products, some of which lessen the cash needed to purchase. For example, the purchaser can opt for a higher rate, no-point mortgage which in fact lessens closing costs. An even higher rate may mean that the lender can advance a loan which will creditadditional closing costs associated with the home purchase. In effect, the purchaser is financing their costs through a higher rate.

Not to be outdone, mortgage insurance companies have offered an option which has helped lessencash requirements. Conventional mortgage insurance in the past required an up-front cash payment of more than 1.0% of the sales price. This option allows the monthly payment to be increased and eliminates the up-front cost. Under new rules and options the payment may be tax deductible as well.

Loans—Most programs allow the purchaser to borrow the money needed to purchase. Some even allow unsecured loans for this purpose.

Source: Newsletterproonline.com




Monday, February 6, 2012

Home-Within-a-Home Concept


Builders are revamping product offerings to serve families with multiple generations living under one roof. Faced with demographic changes, they're moving in with new ideas on how to accommodate this growing segment of the population. Lennar Corp. is one an example of a homebuilder practicing innovation at a time of great change, according to John Burns, chief executive of John Burns Real Estate Consulting. Lennar is now selling what it calls a home-within-a-home. The company is offering houses that feature a full home connected to a smaller apartment. The home-within-a-home concept is designed to give families more versatility in living arrangements. For example, if grandma or grandpa moves back in, the NextGen home offers them a private suite with a bedroom, living area, kitchen, bathroom and a separate patio. The living areas are separated by double doors, for example, if more privacy is desired. Prior to the baby boomers, adulthood was not defined by owning your own property. In fact, older generations stayed within the confines of the family unit. At the time, this arrangement was considered a sign of prudence and fiscal conservatism since it gave older generations a place to stay and younger generations a place to live, while saving money to secure a solid future.

Source: Yahoo Finance
www.newsletterproonline.com


Thursday, February 2, 2012

Yes to the Green House

green-home-stagingWhile home sales may be sluggish in many parts of the country, more buyers are placing an emphasis on green -- with some studies showing that green homes can sell for higher dollar than non-green homes. In Portland, Ore., an analysis from the Earth Advantage Institute found that green-certified new homes sold, on average, for 8 percent more than non-certified green homes--and in one of the counties included in the study even more than 23 percent higher. Earth Advantage Institute analyzed sales data from May 2010 through April 2011 from the Portland Regional MLS. The study found that the sales price was even higher for existing homes outfitted green -- an average of 30 percent more, and one county reporting a more than 61 percent premium on green-certified homes. The green certifications on the homes were from Energy Star, LEED for Homes, Earth Advantage, or an Earth Advantage/Energy Star combination. This is the fourth year in a row that the Earth Advantage Institute has conducted such a study and has found green-certified homes sell for higher prices than non-certified homes. “There's certainly a premium there to be had,” says green builder Josh Wynne from Sarasota, Fla. “Clients are naturally skeptical of green building. If you're disingenuous or sell green as an upgrade like a granite counter,” it won't work. But the hook, experts say, is to promote the upgrades by showing the energy savings that green homes can offer.

Source: EcoHome


Wednesday, February 1, 2012

Time to Buy


Two key measures now suggest it's an excellent time to buy a house, either to live in for the long term or for investment income. First, the nation's ratio of house prices to yearly rents is nearly restored to its prebubble average. Second, when rates are taken into consideration, houses are the most affordable they have been in decades. Whether buying is a better deal than renting isn't a stagnant fact but a changing condition that depends on the relationship between prices and rents, the cost of financing and other factors. But the math is turning in buyers' favor. Stock-oriented folks can think of a house's price/rent ratio as akin to a stock's price/earnings ratio, in that it compares the cost of an asset with the money the asset is capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else equal. Nationwide, the ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble, according to Moody's Analytics. The average from 1989 to 2003 was about 10, so valuations aren't quite back to normal. But for most home buyers, rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren't hitting new lows. As a result, house payments are more affordable than they have been in decades. 

Source: Smart Money