Real Estate Market Rolls

Impressive...that is all I can say.

Jim Belote recaps information that I, and perhaps you have seen, from various news outlets in the past week or so. 

A quick read to know that Mortgage Deduction is safe as well as the relief given to home owners going through a short sale or foreclosure.  As Jim notes, this will keep the market improving by removing a costly tax burden to people in these tough situations.

You have to like the news on Phoenix and Las Vegas as well as national 5%+ home value increase.  Yet, note the continued warning on interest rate pressures.  This is bound to be a topic of many reports in the next few months.

Keeping you updated on the market! For the week of  January 7, 2012 MARKET RECAP It appears Congress and the president have finally reached a compromise on the “fiscal cliff” – the agglomeration of tax increases and spending cuts that were set to take effect in January 2013. The good news is the housing and mortgage markets survived unscathed. The Mortgage Forgiveness Debt Relief Act remains in force for another year. This means forgiven mortgage debt will remain untaxed. Without this extension, short sales, foreclosures, and loan modifications would have become encumbered with a tax burden. This would have been a serious blow to the recovery. These basic market-clearing mechanisms were vital to the housing recovery in 2012, and will continue to help the recovery along in 2013. The mortgage interest deduction also remains intact, which means mortgage financing remains a very good low-cost deal. It also means mortgage financing remains a savvy leveraging strategy for purchasing an asset (residential real estate) that is rising in value; thus providing a means to increase returns on invested capital. In other words, the housing recovery is here to stay, and the latest round of price data supports this conclusion. Trulia reports that asking-price gains accelerated throughout the past year. In the first quarter of 2012, national home prices increased 0.8% quarter over quarter; by the fourth quarter, the pace had increased to 2.3%. Year over year, national home prices were up 5.1%. Fueling the home-price acceleration was the former left-for-dead Phoenix market, which staged a remarkable resurrection that continues to this day. Home prices in Phoenix were up 25% for the year. We've frequently written that falling prices will eventually produce more buyer interest, which, in turn, will lead to an eventual recovery. Phoenix is proof this economic maxim works. Las Vegas also proves the maxim. It seems like it has taken an eternity, but the Las Vegas housing market is on the mend. Home prices in Las Vegas were up 10% year over year in December, building on a price-recovery trend that begin in the second half of 2012. We noted early in 2012 that a recovery in the Las Vegas housing market would likely mean the recovery had become a country-wide phenomenon. This appears the case today. Home prices around the country remain on the rise, and it's appearing more likely that mortgage rates will be rising too. Over the past couple weeks, rates have been inching higher. What's more, events in the debt market point to even higher rates. We are speaking specifically of the 10-year U.S. Treasury note – a benchmark for the mortgage-backed security market and the 30-year fixed-rate mortgage. The yield on the 10-year Treasury has moved considerably higher over the past month. In fact, the yield on the 10-year Treasury today is approaching its highest point in nearly four months. The trend in the 10-year Treasury yield is worth following, because if the job market and economy continue to improve (as we expect), then you can be sure that the yield on the 10-year Treasury note will continue to rise. Should this occur, mortgage lending rates are sure to follow.   Economic  Indicator Release  Date and Time Consensus  Estimate Analysis Consumer Credit (November) Tues., Jan. 8, 3:00 pm, ET $15 Billion (Increase) Important. Rising credit use reflects rising consumer confidence. Mortgage Applications Wed., Jan. 9, 7:00 am, ET None Important. Applications are expected to regain pace after the holiday-season lull. International Trade (November) Fri., Jan 11, 8:30 am, ET $40.2 Billion (Deficit) Moderately Important. Lower energy prices are reducing the current account deficit. Import Prices (December) Fri., Jan 11, 8:30 am, ET No Change Important Prices. Import prices continue to help hold inflation in check.   No Such Thing as a Perfect Market   No sooner had news on the “fiscal cliff” reached the market when frets and worries turned to the debt ceiling. The federal government hit its legal borrowing limit of $16.4 trillion this past week. Now pundits and professional worriers are fretting over what implications this impasse will have on financial markets and the economy. No need to fret or worry, because perfection is impossible. Markets will always be encumbered with uncertainty. To wait for perfection is to wait in perpetuity and to never act. In fact, the best time to act is when the outlook appears most dire and sentiment is decidedly negative. That's when the best values appear. We saw that in the residential real estate market in 2011 and early 2012. Many people who bought a home then are already sitting on a tidy gain today. We still see value, just not as much of it. Low mortgage lending rates have been an extenuating factor, but we believe if borrowers (and refinanciers) wait much longer the value of that factor will fall should rates rise. The point we can't emphasis enough is not to wait for perfection, because perfection doesn't (and never will) exist.     If you wish to unsubscribe, click on the link below and send the email. If this message was forwarded to you, please reply to the sender. Click Here To Unsubscribe EQUAL HOUSING LENDER

Fiscal Cliff: Mortgage Deduction On Way Out???

Ever since Mitt Romey made note in August about the possiblity of the Mortgage Deduction being reduced, the Mortgage Deduction has come a focus of the "tax revenure enhancement" forces in Congress.

With the Fiscal Cliff rapidly approaching(less than 45 days!!), House Republicans and President Obama will be looking for a means to avoid going over the cliff.  As is the wonk of political compromise, unseen consequences arise for the expediency required to avoid a crisis.  And the the Fiscal Cliff is a CRISIS!!

Thus, you need to be aware that the Mortgage Deduction will come under attack as will many others like Oil Subsidies and like "Corporate Welfare" deductions/loopholes.   The basis of the attack will to raise tax revenues without "raising tax rates"....kind of like a bank giving free checking with lots of fees for checks, copies of checks and like...significant cost impact hidden by words like "Free" or "No tax increase" pledges.

You and I may debate for hours if this is the right way or the wrong way to increase federal revenues.  Yet, the fact remains the fact.   Fiddling with the Mortgage Deduction, at minimum,  will:

    1. Directly impact the finacial feasibility of home ownership,
    2. Remove the incentive to buy a home
    3. Reduce home values by up to 25%
    4. Cause more homeowners to go under water on their mortgage
    5.  Reduce home affordability for low income, first time home owners and other buyers with
            low reserves.

IF you believe as I do, that the Mortgage Deduction is a value added feature of our tax code, contact your Congress man/woman, Senator, and the President's office.  Let them know where you stand.

 Perhaps as Congressman Forbe did, your representatives will send a email survey to get your take on this matter.

Shadow Foreclosures Missing in Action...Inventory Shortage???

THE POSITIVE DRUM BEAT GOES ON!!!


If you have been following this blog for awhile, you have seen the trend in Jim's Mortgage Matters updates.   Foreclosures aren't ramping up due to "shadow inventory" so inventories are actually a bit light...possibly the main cause for home prices improving.
The ole'  rules of supply and demand:  The shortage or amply supply of a "widget" is directly linked to the increasing or decreasing price of that "widget".

	Keeping you updated on the market! For the week of  June 18, 2012 MARKET RECAP Let's call it “the crisis that never was.” We are referring to the mother lode of foreclosures and distressed properties – the shadow inventory – that so many pundits predicted would swamp the real estate market in 2012 and return home prices to a downward trajectory. That's hardly been the case. RealtyTrac reports that servicers started a few more foreclosures in May than in April, but filings were still 4 percent lower than in May 2011. RealtyTrac goes on to tell us that foreclosure activity has decreased 20-straight months based on year-over-year comparisons. Yes, foreclosures are still elevated compared to five years ago, but the market continues to handle them in a rational and orderly manner. Short sales have been an attenuating variable. Banks realize they can make more money treating delinquent mortgages with short sales than repossessions. Better pricing is the key variable to making a short sale the superior option. Why take on a home you have to maintain, manage, and market when improved pricing will naturally draw in buyers? The dearth of inventory (which we discussed last week) is the principal contributor to rising prices. Realtor.com reports that the national inventory of for-sale residential properties is down over 20 percent year-over-year, dropping in 144 of the 146 markets it covers. Over the same period, the median age of inventory has dropped nearly 10 percent, while the median list price has risen over 3 percent. The recent spike in mortgage purchase applications points to even more inventory contraction and/or higher prices as we head into the su mmer months. After holding in lackluster territory for much of the spring season, weekly mortgage applications took a huge 13-percent jump, signaling that the su mmer-selling season might be more brisk than many analysts had expected. What's more, the composition of those buying into the reduced inventory also points to a healthier market. The more owner-occupied buyers who jump into the pool, the better. The data show that many more owner-occupied buyers have jumped into the pool in recent months. Buyers of all stripes continue to benefit from an ultra-low lending rate environment. In past issues, we've discussed at length the benefits of financing real estate in a low-rate, low-price environment. In short, the opportunity costs of cash buying is high when mortgage lending rates are low (and vice versa), because the money allocated to the house could have been allocated to other cash-generating investments. That opportunity cost got a little higher this past week, with rates on most lending products dropping a couple basis points. We don't expect them to move meaningfully higher over the next few weeks. Greece and Spain are still a mess, and now it appears Italy is set to join the fray. That means investors remain risk averse, which means more money flowing into haven securities, including the influential 10-year U.S. Treasury note. That said, it's important to keep in mind that we have a supply-and-demand issue at work. Demand for mortgage products have spiked in recent weeks, which means processing times could rise. Therefore, it's still prudent for borrowers to get their applications in ASAP. The benefit of waiting for a lending rate five or 10 basis points lower than today's market rate can easily be offset by a home whose price rises or is snapped up by another buyer. What's more, even though we expect rates to remain low, rates can (and have) turned on a dime. Economic Indicator Release Date and Time Consensus Estimate Analysis Home Builder Index (June) Mon., June 18, 10:00 am, et 28 Index Important. Increased demand is lifting home-builder optimism. Housing Starts (May) Tues., June 19, 8:30 am, et 725,000 (Annualized) Important. Starts continue to rise off a base that itself has risen over the past six months. Mortgage Applications Wed., June 20, 7:00 am, et None Important. A 13% increase in purchase applications points to pivotal underlying strength in home sales. Existing Home Sales (May) Thurs., June 21, 10:00 am, et 4.6 Million (Annualized) Important. The trend of rising purchase applications suggests the consensus estimate is too low. The Perfect Investment? To be honest, we can't say any investment is the perfect investment (then again, no one can). Personal circumstances and goals determine what investment is most appropriate to any individual investor. Nevertheless, there is a heckuva lot to like about residential real estate these days: prices rising off a bottom, low financing rates, rising rental rates, shrinking inventory. This is almost the opposite of what the market was like six years ago. Back then, most everyone would have been better off selling rather than buying, as hindsight has clearly proven. Of course, there are no guarantees when it comes to investing or price appreciation, but for investors or occupiers who plan to own their property for at least five years, we see little downside risk and a lot of upside potential at this stage in the market. If you wish to unsubscribe, click on the link below and send the email. If this message was forwarded to you, please reply to the sender. Click Here To Unsubscribe EQUAL HOUSING LENDER This Newsletter is for informational purposes only. The information contained herein may not be applicable to every situation or jurisdiction and we urge you to consult your professional advisor prior to acting on information contained herein. The content, accuracy and opinions expressed herein are not verified or endorsed by the sponsor hereof.

Another Voice: Don't Miss This Opportunity

Yesterday, I posted on the significant advantages of this Real Estate Market!


And Today I get an email from Jennifer Keenan of Old Point Mortgage on the Same.


Be sure to click on the link with charts and graphs...


AND NOTE HER FIRST SENTENCE...ENDS
  "send to your buyers".


I think everyone...even sellers need to review her notes.

Historic Data for Home Appreciation 09/30/11

I thought I would provide today, a piece that you can use to send to your buyers.  The housing market still faces many challenges. High unemployment, foreclosures and other distress sales are keeping negative pressure on prices. This of course is good news if you are looking to buy as low rates and lower prices have brought affordability to record levels.   How Affordable? Since 1963, it has cost an average of approximately 43% of 'per capita' or individual income to finance the cost of a median priced home (20% down payment and prevailing 30 year fixed rate mortgage). Right now, it's only about half of that cost at approximately 22%.    Are you holding off on a purchase for fear that prices might fall further? Chances are that some sellers might be thinking the same thing. If you're smart about it, you can use that as an advantage to strike the best possible deal on a home today for once a seller believes that prices have bottomed or are going back up, your advantage will be gone.   Don't confuse Price with Payments - Gambling on the expectation of a lower price tomorrow at the risk of higher rates can cost much more in the long run than locking in a sure thing today. Ex. $200,000 30 Yr. fixed loan @ 4.625% = $1028/mo. today vs. $180,000 @ 6.5% = $1137/mo. later. In other words, paying less can still cost you more.   Own, Rent, or Borrow - One way or another, a home is something we all need every day. The numbers here tell the story and it's no secret that values have fallen, yet over time, that's not the case. As you can see by the chart, values over the last 10 years in most states show very healthy appreciation, and over the long haul (map below) all states have.   We don't get a history lesson in the news because the news is about the moment and the more dramatic the better. That's what sells advertising and that's how they get paid. For the rest of us, taking a rational, longer term view of things makes more sense. This is particularly true when it comes to a home, for this is something we are likely to own for many years rather than just moments.  I have attached this letter along with chart and graphics.  (Click on the sentence).      UP AND RUNNING...www.jenniferkeenan.net!!!!! I look forward to working with you and your clients, if you have any questions, please feel free to contact me.  Never banker's hours!  I'm here even on weekends and evenings! 200 Golden Oak Ct., Suite 100   Virginia Beach, VA  23452 Direct:  757.605.4641 Mobile:  757.272.4199 Facsimile:  757.605.4666 NMLS #101837  MLO #5315VA Email:  jkeenan@oldpointmortgage.com www.jenniferkeenan.net

Thoughts????  Questions???


Don't be left holding the bag when prices and rates increase!!

1st Timers...Buy Before FHA rates are up!!

Yes!!!  Another message on BUYING NOW!!!

Personally, I am surprised so many buyers are on the sidelines...and I do mean BUYERS that need to BUY!!

Did you know you may be among 300,000 people that graduated, got divorced, add a family member that are projected to be the "pent up market".   

Economists have been stymied by the lack of recovery in the housing market with the pressures present from those noted above that have had a life change event and the general population growth that has occured since 2007(both immigration and births) coupled with the overall increased aging of the American population.

So if great rates under 5% and bargain priced homes has kept you on the sidelines, perhaps new FHA regulations will inspire you.  In June, FHA mortgages will have a higher monthly MI(mortgage insurance premium) which will result in higher mortgage payments for home owners.

For instance, if you purchase a home resulting in a $200,000, your PMI will go from a present  $92/mth to $142/mth:  $50 increase.  

This $50/month equates to $600/year and $6000 over 10 years

Thus if you purchase a home with an FHA Loan and had the appraisal ordered prior to June 1st, you could either save the money or purchase a home up to $210,000 for a similar payment.

Any questions????

                           Ready to Move???

         Call me today...(757) 580-6546

Home Values are Better Than You Think

A Wonderful Investment: A Home (edit/delete)

A Home continues to be your best investment!!!  And that doesn't count a home's"priceless" value as a place to raise your kids, share time with friends or just escape after a long day of work.

Yet with all the news on home values and foreclosures, buyers and sellers alike have sat on the sidelines as they were uncertain if it made sense to buy a home.  in the past month, an AP article even stated that real estate may never be the value to Americans that it once was.

Recently, Van Rose, a principle with Rose & Womble Realty, shared with the company a topic that I have brought up to buyers and sellers over the past couple of years.   The topic:  HOME VALUES OVER THE PAST 10 YEARS CONTINUE TO OUTPACE HISTIORICAL RESULTS.

In the graph below, the Blue line notes the actual appreciation experienced in Hampton Roads since 2000. The Yellow line notes the historical 4% rate of increase that has been the 50 year average.

Not hard to see the "hot years" strong appreciation or the tough depreciation of the past two years.  Yet look at the delta(difference) after 2010.   A $50,000 positive variance!!!!   What investment would you shun that over a 10 year period beat the last 50 years average.

Also note the flattening trend....and the solid expectation that we will resume price appreciation in late 2011/2012.  

                                   AND WHAT DO YOU GET???

             A clear sign that any one needs a new home for any of the many reasons that cause an individual or family to need to make a change:                       

                                    CALL A REALTOR AND GET GOING!!!

Market Realities

Hampton Roads Market Realities (edit/delete)

With 2011 Real Estate Market unknown, we have to look at the results of 2010 to get a sense of our direction and in the current conditions to know where we are headed.

In a great Rose & Womble meeting today, we learned that the New Homes division was up over 4% in units last year and there is only 3.5 months inventory at present.  In addition, the New Homes division saw:

                          

 11% Increase in sales of home in $350,000-$400,000 range

 31% Increase in sales of homes in $400,000-$450,000 range

As Van Rose, President New Homes, these results are a great indication that the market is turning a corner as buyers are feeling the improvements in the market and are confident about moving forward to purchase that new home they have wanted.

With the pent up demand for home purchases caused by the uncertainty and anxiety of the  past three years, there are people the need and will buy homes in 2011.  Buyers have begun to peak their heads out with the growing confidence and the new homes data shows it.

Both New Homes and Resale will benefit in 2011 from:

•     Low New Home Inventory
•     Good Inventory of Homes Priced to Sell(Values are at 2004/2005 levels)
•     Low, low interest rates
•     Improved Buyer Confidence

A recent survey cited by Van, noted 90% of people said it was a great time to buy real estate.   In addition, Van showed a chart noting that a home purchased in 2001 was still valued higher in 2011($50,000 on average) than it would have been if growth rate was 4% over the 10 year period.  Thus, numerous home owners have amply equity in his/her home to act on his/her interest to buy a new home.

In addition, this home owner and renters looking to buy their 1st home can realize that though home values have softened in the past three years, real estate remains an excellent long term investment.      

             

So if you are one of the millions that have wanted to know the right time to buy...YOU FOUND IT!  

 

Market Slow??? Not All That You Think

No doubt you wondered where I went!!!

Business has been solid in the Real Estate Market in Hampton Roads....how is it in your area?
Perhaps you are seeing it different. Yet buyers are putting contracts on my listings so that I might have the best March ever. On top of that, a number of buyers are getting serious about buying that new home they seek. I hope if you are seeking or selling a home that you are having the same good fortune.

Should you be sitting on the fence, you might want to know that the buyer of your house(should you need to move) or that the home you wish to buy may have a lower payment today than if you wait a year. How? You may ask.

A great mortgage officer I know, David Katz, pulled together a scenario that proves this point.
Assume the values of homes reduced by 5%(due to the lagging market...we were up 4.5% in 2007) but the rates go up only .05%, the following mortgages would exist:

Today's Value Today at 6% 5% Reduction In one year at 6.5%
$200,0000 $1163.13 $190,000 $1164.90

$300,000 $1744.69 $285,000 $1747.35

$400,000 $2158.38 $380,000 $2167.67

The above assumes 3% on 30 year note.

As you can see, based on this scenario, one can purchase today and have a lower house payment than waiting. Thus, buyers and sellers lock in today's market rather than testing the future to see if it is only modestly different in values and interest rates. Or will the interest rates go higher after the November election?? No one knows but this possibility must be considered.

So Today is the best day to seize your future...whether in real estate, your marriage or in attaining job satisfaction. It is all up to you!