Sales of existing homes were down in January while home prices continued to appreciate at double-digit rates, according to the NATIONAL ASSOCIATION OF REALTORS®.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 2.8 percent to a seasonally adjusted annual rate1 of 6.56 million units in January from an upwardly revised pace of 6.75 million in December. Sales were 5.2 percent below the 6.92 million-unit level in January 2005.
David Lereah, NAR’s chief economist, said sales are tracking the trend in the association’s Pending Home Sales Index. “Our leading indicator, based on pending sales, has been trending down since hitting a record last August,” he said. “In the wake of interest rates peaking in November, I expect we are in a bit of a trough that may be followed by a modest rise and then a general plateau in the level of sales activity. Existing-home sales should stay below the record levels experienced over the last two years, but they’ll maintain a historically high pace.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.15 percent in January, down from 6.27 percent in December; the rate was 5.71 percent in January 2005. In November, the 6.33 percent fixed rate was the highest in over three years.
The national median existing-home price2 for all housing types was $211,000 in January, up 11.6 percent from January 2005 when the median was $189,000. The median is a typical market price where half of the homes sold for more and half sold for less.
NAR President Thomas M. Stevens from Vienna, Va., said home prices continue to show the long-term effects of tight supply. “Although housing inventory levels have been improving, it is far from being a buyer’s market in most of the country and we see the momentum of double-digit appreciation being sustained in home prices,” said Stevens, senior vice president of NRT Inc. “Even when home sales slow, they still supply solid returns. The longer you own, the bigger the gain.”
Total housing inventory levels rose 2.4 percent at the end of January to 2.91 million existing homes available for sale, which represents a 5.3-month supply at the current sales pace.Single-family home sales dipped 1.5 percent to a seasonally adjusted annual rate of 5.77 million in January from an upwardly revised 5.86 million in December, and were 4.8 percent lower than the 6.06 million-unit pace in January 2005. The median existing single-family home price was $210,500 in January, up 13.1 percent from a year earlier.
Source: NAR
Tuesday, February 28, 2006
Sunday, February 26, 2006
Mortgage Options for Tricky Situations
When customers want to close on a new home but their current home hasn't sold yet, there are a number of financing arrangements that can help bridge the gap. The odds of such a situation occurring is higher when the real estate market cools.
The most common interim financing tool for buyers is a a short-term bridge loan, which finances the down payment and closing costs for a new home. When buyers sell, they repay the bridge loan. While it provides lots of flexibility, this type of loan usually carries high interest rates.
A better alternative for some is a bridge loan with deferred interest payments. It pays off the first mortgage, eliminating one set of mortgage payments, plus it covers the down payment and closing costs on the new home. The seller often doesn’t pay anything until he sells his home.A third possibility is 100 percent financing on the new mortgage. With no down payment needed, the buyer can manage until his old home is sold. However, the buyer must be approved to hold two mortgages.
Source: Wall Street Journal, Kirsti McCabe
The most common interim financing tool for buyers is a a short-term bridge loan, which finances the down payment and closing costs for a new home. When buyers sell, they repay the bridge loan. While it provides lots of flexibility, this type of loan usually carries high interest rates.
A better alternative for some is a bridge loan with deferred interest payments. It pays off the first mortgage, eliminating one set of mortgage payments, plus it covers the down payment and closing costs on the new home. The seller often doesn’t pay anything until he sells his home.A third possibility is 100 percent financing on the new mortgage. With no down payment needed, the buyer can manage until his old home is sold. However, the buyer must be approved to hold two mortgages.
Source: Wall Street Journal, Kirsti McCabe
Tuesday, February 21, 2006
2005 Cost vs. Value Report
Remodeling's Payoff:
The annual report compares construction costs with resale values in 58 markets.
The “Cost vs. Value Report,” published each year in conjunction with Remodeling magazine, gives you a city-by-city guide on what various home projects will pay back at resale. This year’s report features data for five more markets than last year* and a new project—a mid-range home office remodel.
On a somber yet optimistic note, we included New Orleans’ results, compiled before Hurricane Katrina, with the firm belief that in time the Big Easy’s real estate market will once again be thriving.
Where we get the data:
Cost data for the report come from HomeTech Information Systems, a remodeling estimating software company in Bethesda, Md. HomeTech collects current cost information quarterly from a nationwide network of remodeling contractors and employs an adjustment factor to account for regional pricing variations. Construction cost figures include labor, material, sub-trades, and contractor overhead and profit. Resale values (“cost recouped” in the tables) are aggregated from estimates provided by National Association of REALTORS® members. E-mail surveys containing construction costs and median home price data for each city were sent to more than 20,000 appraisers, brokers, and salespeople, yielding data from more than 1,600 respondents (an 8 percent response rate). Specpan, an Indianapolis-based market research company, hosted the Web-based survey and collected and compiled the data. Farnsworth Group, a sister company to Specpan, analyzed survey data and provided pre- and post-survey consulting.
What do the numbers mean?
If some remodeling job cost figures appear too high or too low, one cause is the leveling effect of averaging.
The demand for—and cost of—remodeling services can vary greatly within a given metro area.Averaging also affects the value side of the equation. The amount recouped for an actual remodeling project depends on the condition of the rest of the house, as well as the value of similar homes nearby, the availability of new homes, and the rate at which property values are changing. Location in an urban, suburban, or rural setting will also affect a home’s value. In some cases, the value of the remodeling project at resale is more than 100 percent of its original cost. This usually happens in markets where property values are rising very rapidly, but it can also occur when buyers regard certain types of remodeling projects as “standard.” For example, in a neighborhood where most homes have an updated kitchen, remodeling a kitchen may well increase the resale value of the home beyond the cost of construction. In some cases, in fact, not redoing the kitchen could cause the home to sit on the market for much longer than normal and to eventually sell for less than similar homes in the area. Keeping up with the Joneses can be a savvy investment move. But ultimately, the best reason for a remodel is to enjoy it.—Sal Alfano, editorial director of Remodeling magazine, and Christina Hoffmann Spira, managing editor of REALTOR® Magazine
Confidence is high
National figures have a confidence level of 99 percent (+/– 4 percent), according to Farnsworth Group. Dividing the results into regions effectively reduces the number of responses and likewise the confidence level. Data for cities are the least reliable because of the smaller number of responses.
Survey confidence levels
National:
99% (+/– 4%)
East
95% (+/– 7%)
Midwest
95% (+/– 7%)
South
95% (+/– 4%)
West
95% (+/– 5%)
Note: The confidence level is a measure of statistical accuracy. The national level of 99 percent (+/– 4 percent) means that 99 percent of the time, national results for this survey will fall within 4 percent to either side of the national numbers published here.
Since 2002 four projects, reported each year since 2002, have shown the greatest return at resale on a national basis. Two of the projects, siding and windows, reflect the importance consumers place on curb appeal and insulation; the others, a kitchen and a bath project, are consistently high performers in most markets.
The annual report compares construction costs with resale values in 58 markets.
The “Cost vs. Value Report,” published each year in conjunction with Remodeling magazine, gives you a city-by-city guide on what various home projects will pay back at resale. This year’s report features data for five more markets than last year* and a new project—a mid-range home office remodel.
On a somber yet optimistic note, we included New Orleans’ results, compiled before Hurricane Katrina, with the firm belief that in time the Big Easy’s real estate market will once again be thriving.
Where we get the data:
Cost data for the report come from HomeTech Information Systems, a remodeling estimating software company in Bethesda, Md. HomeTech collects current cost information quarterly from a nationwide network of remodeling contractors and employs an adjustment factor to account for regional pricing variations. Construction cost figures include labor, material, sub-trades, and contractor overhead and profit. Resale values (“cost recouped” in the tables) are aggregated from estimates provided by National Association of REALTORS® members. E-mail surveys containing construction costs and median home price data for each city were sent to more than 20,000 appraisers, brokers, and salespeople, yielding data from more than 1,600 respondents (an 8 percent response rate). Specpan, an Indianapolis-based market research company, hosted the Web-based survey and collected and compiled the data. Farnsworth Group, a sister company to Specpan, analyzed survey data and provided pre- and post-survey consulting.
What do the numbers mean?
If some remodeling job cost figures appear too high or too low, one cause is the leveling effect of averaging.
The demand for—and cost of—remodeling services can vary greatly within a given metro area.Averaging also affects the value side of the equation. The amount recouped for an actual remodeling project depends on the condition of the rest of the house, as well as the value of similar homes nearby, the availability of new homes, and the rate at which property values are changing. Location in an urban, suburban, or rural setting will also affect a home’s value. In some cases, the value of the remodeling project at resale is more than 100 percent of its original cost. This usually happens in markets where property values are rising very rapidly, but it can also occur when buyers regard certain types of remodeling projects as “standard.” For example, in a neighborhood where most homes have an updated kitchen, remodeling a kitchen may well increase the resale value of the home beyond the cost of construction. In some cases, in fact, not redoing the kitchen could cause the home to sit on the market for much longer than normal and to eventually sell for less than similar homes in the area. Keeping up with the Joneses can be a savvy investment move. But ultimately, the best reason for a remodel is to enjoy it.—Sal Alfano, editorial director of Remodeling magazine, and Christina Hoffmann Spira, managing editor of REALTOR® Magazine
Confidence is high
National figures have a confidence level of 99 percent (+/– 4 percent), according to Farnsworth Group. Dividing the results into regions effectively reduces the number of responses and likewise the confidence level. Data for cities are the least reliable because of the smaller number of responses.
Survey confidence levels
National:
99% (+/– 4%)
East
95% (+/– 7%)
Midwest
95% (+/– 7%)
South
95% (+/– 4%)
West
95% (+/– 5%)
Note: The confidence level is a measure of statistical accuracy. The national level of 99 percent (+/– 4 percent) means that 99 percent of the time, national results for this survey will fall within 4 percent to either side of the national numbers published here.
Since 2002 four projects, reported each year since 2002, have shown the greatest return at resale on a national basis. Two of the projects, siding and windows, reflect the importance consumers place on curb appeal and insulation; the others, a kitchen and a bath project, are consistently high performers in most markets.
Thursday, February 16, 2006
What If You Can No Longer Afford To Keep Your Home?
Dear Seller,
If you cannot or do not want to keep your home, your mortgage company can work with you to avoid foreclosure. This can help reduce the negative effect on your credit reputation. There are several different ways this might occur depending upon your financial circumstances:
An assumption permits a qualified buyer to take over your mortgage debt and pay the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.
If you can sell your house but the sale proceeds are less than the total amount you owe on your mortgage, your mortgage company may agree to a short payoff and write off the portion of your mortgage that exceeds the net proceeds from the sale.
Your mortgage company may agree to a deed-in-lieu of foreclosure if you agree to voluntarily transfer title of your property to your mortgage company in exchange for cancellation of your mortgage debt. In most cases, you must attempt to sell your home for its fair market value for at least 90 days before a mortgage company will consider this option. This option may be unavailable if there are other liens on your home, such as judgments from other creditors, second mortgages, or tax liens.
David Rigney
Professional Realtor® in the Chicagoland Area
www.davidrigney.com
Real Estate News: www.davidrigney.blogspot.com
rigneyrealty@comcast.net
Direct Line: 847.732.7436
24 Hour Real Estate Information Line @ 1.800.731.1162
If your home is currently listed for sale with another broker, this is not intended as a solicitation of that listing.
If you cannot or do not want to keep your home, your mortgage company can work with you to avoid foreclosure. This can help reduce the negative effect on your credit reputation. There are several different ways this might occur depending upon your financial circumstances:
An assumption permits a qualified buyer to take over your mortgage debt and pay the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.
If you can sell your house but the sale proceeds are less than the total amount you owe on your mortgage, your mortgage company may agree to a short payoff and write off the portion of your mortgage that exceeds the net proceeds from the sale.
Your mortgage company may agree to a deed-in-lieu of foreclosure if you agree to voluntarily transfer title of your property to your mortgage company in exchange for cancellation of your mortgage debt. In most cases, you must attempt to sell your home for its fair market value for at least 90 days before a mortgage company will consider this option. This option may be unavailable if there are other liens on your home, such as judgments from other creditors, second mortgages, or tax liens.
David Rigney
Professional Realtor® in the Chicagoland Area
www.davidrigney.com
Real Estate News: www.davidrigney.blogspot.com
rigneyrealty@comcast.net
Direct Line: 847.732.7436
24 Hour Real Estate Information Line @ 1.800.731.1162
If your home is currently listed for sale with another broker, this is not intended as a solicitation of that listing.