Can it be? Really?? SPRING!!!!!!

Spring is HERE!!

I may be a bit too optimistic.  Yet after three weeks of snow and cold reminiscent of my childhood in the Midwest, Hampton Roads is ready for the 50's and 60's projected for this week.

Yes, we have nothing to complain about!  Boston, you took the brunt of the abuse but weren't far ahead of the Kentucky, Michigan and host of other states with record snow falls and/or horrific traffic snarls due to the "normal" winter weather.

Rather interesting that the snow and cold that all those kids were told about by parents finally showed up!!

With the break in the weather, the already strong Spring selling season should really heat up.  Even with weather, I have had the strongest Spring in four years!!  

For the past three years, buyers and sellers stayed on the sidelines while interest rates were low and buyer demand(for sellers) was starting to show until the second half of the year.  Thus, the sales time frame was inverted:  Spring slow   Fall fast.

But with rates for the fourth year in a row around and right now below 5%(closer to 4% right now), mortgage credit availability way up and FHA lowering the MIP premiums, buyers are out in force.

Many of the buyers are sellers looking to move up or downsizing to retire.  Thus, 2015 should see exponential activity caused by the $200,000 home seller, buying the $250,000 house so that seller can purchase a $350,000 home and so forth.

The Spring season strength is also seen in new construction.  Builders again believe that their product will move.  And it is all because of what I noted above.  As the lower price homes sell, eventually a home buyer seeks to move to new construction versus resale.  

Also, home owner strickly wanting new construction provide needed inventory to buyers looking for their next house.

Once the cycle begins, it is like any natural cycle in nature: it becomes self sustaining!!   Normal factors of the market keep this self-sustaining cycle in appropriate parameters to continue for years.

Only the enzyme of "frantic" buying caused by too little inventory for too many buyers would cause the cycle to spiral out of control as relates to home prices.  

With the pent up demand caused by 5+ years of buyers "waiting for the market to improve", it is possible in the later phases of this self-sustaining cycle that prices will once again skyrocket.

Though benefiting a few sellers over a short period of time, such skyrocketing values have very negative affect upon a normally healthy real estate market.

All this said, you should know now is the time to buy.  Rates and prices will only go up as this cycle reaches maximum operating potential.  

Call me today at 757 680-6546 to make your dreams come true!

Home Equity is Improving NATIONALLY

Where are You Sitting??

         Has your equity position in your home improved???

For the most part, in many parts of the country, the huge losses in home equity have been erased in the past three years as the housing environment improved.   

Buyers have been out, investors and home owners.  In Hampton Roads and other markets, the lower price ranges now are having multiple bids on some homes.   For this market, homes even up to $400,000 are selling quickly.

It appears that this trend of "normal market" will expand to the $500,000 price range in 2015.  

What does this have to do with home equity??

As demand outstrips supply, values of widgets or homes goes UP!!!

Thus, with buyer confidence and improving financial markets have encouraged town home and apartment dwellers to purchase a first or second home, we have the sellers of those homes pushed to purchase a new place.  And so it repeats through the various price strata.

Thus, this new analysis of home equity is not surpising.  Only about 10% of home owners are now under water with their mortgage.

Imagine it!  Perhaps you are not where you once were!

It could be very likely it is time to make that move you been holding off on, fearing your equity situation.

Home Equity

Trendy Bathroom Upgrades for a Quick Sell

If you have any thought about selling with the housing market improving so much, this is a must read.

Bathrooms and Kitchens sell homes.  Yes, the bedroom sizes and the swing in the back yard do make a difference.  So do many other factors of a house  matter.



Yet, if the bathrooms are ugly, dated or dirty, the buyer, especially the ladies, will be gone and not consider any other attributes of the house.



So don't distress possible or probable buyers!  If you will sell in 2015, read carefully, evaluate your own baths(and kitchens) and do as needed!!!!!!!





I CAN SELL your home for more in less time but only if your home is ready to sell

Trendy Bathroom Upgrades for a Quick Sell

Lower Payments & More House

The Magic of

Interest Rates

A frequent topic of this blog is current interest rates and the impact on your, the buyer's, house payment.  The frequency is due to the changing environment of rates never the same day to day.

But more importantly, to keep the buyer and seller aware of the true magic of low interest rates on house payments.

As can be seen again in the three charts below, that regardless of your purchase price, today's lower rates allow the buyer to buy and a seller to sell a substantially higer price home.  The value is amazing.

For only an increase of 1.5% in interest rate, every price range can make the same payment for a home 10% lower mortgage amount or house value.  No matter how you put it, having to buy a less expensive home ($20,000 to $60,000 less) than you could today because interest rates rise will hurt.   With home prices rising and expected to rise over the next five years, it will be double whammy of buying less house for the same payment.

Don't let it happen to you!!! If your situation or your family situation requires more or less space, or a move to a different city or state, now is the time to act while rates and home prices are lower than they will be in the future.

Seller: What's a Website Do for Me

What Can a Website

Really Do?

Talking to potential seller clients, numerous valid topics are discussed:   current competition

                   recent home sales

                   company market presences and benefits thereof

                   my experience and how I sell for more in less time

Yet one of the most interesting discussions is regarding the marketing plan.  As over 90% of home buyers begin their home search on line, web presence is essential.  Yet, the home seller frequently doesn't understand the market presence is very broad on the web.

If asked, the home seller frequently, believes home buyers search simply Zillow and Trulia or the company website. Thus a discussion of the value of presence across multiple portals ensues to help them know how a broad presence among other websites like those shown above(and many more) makes a difference.

Home buyers find varying amount of information on various websites.  Yet, in beginning or continuing a home search, the home buyer may have as little as the city to search or as detailed as the address of the house.

In either situation, multiple hits for a given home or Realtor across multiple sites provide improved information and assures the Seller of a given home a expotential improvement in exposure of their home.

As a result, any marketing plan not leveraging real estate information website will be ineffective in exposing home to every potential buyer for a given home.  Thus, perhaps failing to gain the highest price in the least amount of time that I offer and a seller expects.

Ignore the web at your own peril!!!

The Importance of Using an Agent when Selling Your Home

Getting the Important Stuff

Right

Since the real estate debacle in 2008, the question "Why use a Realtor" to sell a home has just not been

a question asked in conversations with sellers, potential sellers or just friends and past clients.  The tough heavy short sale and foreclosure climate of those years had any home owner needing to sell anxious to seek out a Realtor to navigate those tough waters.

As the market has now improved, the "Why" question is again being asked.  This article attached below from a well respected source, Keeping Current Matters, really speaks to the "Why" in any market.

The high percentage of buyers noted looking online have high demands:  easy access and picture, pictures, pictures.   With the many portals that share available homes like Zillow, Realtor.com and Truila(there are hundreds), it is crucial that a seller's home is present on any one of these sites and preferably numerous websites.  One never knows which website a buyer may look at a home.   We all must realize that a good number of the home buyers don't even live in the States.

Add to this that home buyers reach out to a Realtor very frequently to learn more about a house, the city, neighborhood and much more as the home buyer becomes ready to purchase a home.  As is common with all of us when involved in an infrequent event, home buyers seek out advice, information and knowledge.  The seek a Realtor's help with the buying process, finding mortgage options, school information and so much more.

The Importance of Using an Agent when Selling Your Home

Deferred Maintenance--The Bane of a Home Selling

Deferred Maintenance

The Bane of Home Sales

Frequently, whether previewing a home with seller looking to prepare a home for sale or showing homes to a buyer, deferred maintenance is more present than not present.

What is deferred maintenance?  Deferred Maintenanc is needed repair work in a given house that has not been performed.

At times, deferred maintenace is as show in the picture above.  Walls with "stale" paint and tile grout needing cleaning are maintenance items that are common.  These items reduce a home's value to the buyer as the "home doesn't shine" and there is money/time/labor to be expended to correct the issue.

Factors like dated lighting, peeling mirrors, brick steps needing pointing and like are really cosmetic issues that could have been resolved easily by the seller at any time for minor cost.

On the other end of the spectrum, expensive deferred maintenance that will frighten away many home buyers and are frequently unaffordable(by finances or perception) for the home seller.

Roof issues are one of the most frequent.  Samples above could be simple tab replacement or may be indicative of a roof past its prime.  With roof replacement typically being in excess of $3000 tends to be passed on to buyers.  This can be due to cost or perception of "the roof isn't leaking so the buyer has nothing to worry about".  In such situations, the buyers highly discount the price due to inflating the cost of repair.

Another major deficiency is stained or warned carpet.  Though the cost is more reasonable to the seller and typically is acknowledged as a item to address.  The logistics of moving furniture and disrupting the daily event of the house causes sellers to refrain from replacing the carpet.  

You can think of any major factor of a house that hasn't been addressed in years and most likely cost and the fact that the item not addressed still serves its purpose is the reason that deferred maintanence is present.  Heating and cooling are prime examples.

In summary, deferred mainteance items are present in many homes.   Buyers hate to see it. Sellers frequently acknowledge the issue. Yet, the cost of repair and the knowledge that "nothing is really broken" makes the Sellers resilient to do the repair.

Adjustable Rate Mortgage are BACK!!

Adjustable Rate

Mortgages

Fascinating!!!  Absolutely Fascinating!!

Over the weekend in the Virginia Pilot, I noted a Navy Federal ad boasting of a 3.05% interest on a 5/5 adjustable interest rate mortgage.  Today, I see a RisMedia's blogpost, self titled as Leader in Real Estate Information, along with a couple other touting the comeback of the adjustable mortgage due to the rising interest rates.

With interest rates within a 1 point or so of absolute historical lows, the home buyer must carefully evaluate the adjustable rate mortgage option.  To take an adjustable rate mortgage just for a lower payment without looking at the bigger picture or evaluating the entire situation can be a huge mistake.

No doubt if you are buying in 2014 and will be moving or expect to move in three years, you are a good candidate to buy a home with an adjustable rate mortgage.  With the low introductory rate, even a rapid run up in rates(not expected), your rate would at the highest point(based on Navy Federal's start rate) would be 5.05% when you sold the home even if rates went to 5.75%.  

Saving money on one's mortgage is always very attractive.  In the example above, the home buyer/owner would absolutely spend fewer dollars than if he/she locked in a 30 year mortgage in current mid to high 4% range.

Yet, if a home buyer unsure if he/she will sell in 5 or 10 years decides on a adjustable mortgage, he/she could find themselves in a much less positive situation.   In five years, it is very hard to predict the interest climate that far out.  It even gets worse for 8 years or 10 years out.

With interest rates low(artficially low) for all of 2011-2013, it is very possible that rates could rise over the next few years.   Perhaps they rise and settle at the historical average of mid 7% interest rates.

The homebuyer unsure of a move date would see increasing interest rates and house payments each year.  Then when the 5 year period is up(Navy Federal's example), the homebuyer, now home owner, would have to refinance to a 7% interest rate for the next 5 years(if moving in 10) or next 25 years possibly.

This minimum 2.5% premium in interest for 5 to 25 years would caused the homeowner to spend substancially more for housing than he/she would have if she would have locked in a 30 year 4.5% mortgage at the time of purchase.

As your situation can be different both at the price point of home you seek to purchase and the interest rate, based on your credit score, precise examples were not presented.  

Yet, it should be abundantly clear that a home buyer must carefully evaluate the advantages and disadvantages of an adjustable mortgage.

Your Realtor can help you and point you to an expert Mortgage Officer for a detailed discussion.

Consult your Realtor today!!

Value of Condo Association or Home Owner Association

The Value of Your Condo or Home Owner Association

Establishing the value of an Association, whether a Condo or Home Owners, can be a complex dilemma for home buyers.   Associations are proven to maintain/improve home values due to consistency of home condition and an assurance that continuity of style and condition will be maintained.   It is very easy during the home search process to point out to buyers the higher values of similar age homes found in an Association versus a nearby neighborhood that has no Association.  

Though this be a truth in Hampton Roads and through out the country (as reported by NAR(National Association of Realtors), the value of such Associations will vary by buyer.  This is true for the following reasons:

1.  Association Monthly Fee reduces Buyer's price point 

2.  Amenities may be limited in given Associations

3.  Condition of homes may call into question the proper use

         of Association Funds(Condo Associations)

4.  Exterior work requires Association Approval

5.  Association can censure/fine home owner for non-compliance

          to Association guidelines

6.  Association Fees are not capped thus increase are inevitable.

7.   Rental Factor in Neighborhood

8.   Mortgage Restrictions

Of these value "adjusters", items 4 and 5 are very easy for the home buyer turned home owner to see as a "value add" element of an Association.  By simply knowing the factors that can provide censure or fine or needing Association approval and avoiding these infractions will make these non factors as relates to living in an Association.  This is normally quite easy: the infractions are outlined in the Condo or Home Owner Association documents provided to a buyer prior to purchase of the property.  In Virginia, the buyer is permitted three days to read and to accept or reject the documents, resulting in the transaction continuing or being canceled.

The other six evaluation points range in meaningfulness to each individual buyer.  For example, a first time home buyer may find a $150 condo fee restricts his/her purchasing power by $30,000 even in the present 4.5% interest rate market.  For a first time home buyer, this is a significant challenge many times.  To this first time home buyer as well as other buyers, the strong possibility of fees increasing over time can be a challenge especially in Condo neighborhoods, especially if the fees have stayed constant and the properties are in need of repair.

The rental factor and mortgage restrictions can play a part in a given neighborhood.  As most condo and home owner association bylaws and restrictions tend to have a limit the number of rented homes allowed in given neighborhood.  In addition, Condo and Town Home Neighborhoods must be approved by the VA and Dept of Housing Development(meet reporting guidelines related to a given association).  As I tell buyers, though no issues are present now whether the buyer wants the condo or town home sold or rented in the future, changed parameters of the neighborhood could impact their ability to sell or rent down the road.

Even with the challenges present in a condo or town home or a single family home, an Association may be the right choice for a home buyer.  

Yet a fair and impartial evaluation is required to make the right decision for a given buyer.

Questions on what are the benefits of a Condo/town home or a single family in a Association neighborhood?   Please comment and let me know!!!

More on the Mortgage Deduction

Topic Summary: In the last edition we alerted you that Congress is laying the foundation for comprehensive tax reform. (article is below) Sure to be part of those conversations is the Mortgage Interest Deduction (MID) that millions of homeowners benefit from. In this ongoing series we aim to keep you up to speed on the talks in Washington. We will give you an opportunity to get your views across to your elected officials and generally will be a valuable source of information as tax reform takes over the activity in Washington.

But I Don't Have A Mortgage. Why Should I Care? 

If certain provisions in any new tax reform are counter-productive to a robust housing market, all homeowners will lose out. If you have a paid off mortgage are you still deducting state and local property taxes? They are talking about these too. For many homeowners, property taxes are their largest tax deduction, one that continues even after a mortgage is paid off. Just remember if less people can afford to buy a home, selling yours will be more difficult.

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What To Believe: If you benefit or not from the MID, you should be aware of some of the myths that are floating around that distort the conversation on the merits of the tax provision. Our friends at Houselogic have added their research on 6 MYTHS ON THE MORTAGE INTERST DEDUCTION

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By The Numbers. State By State Usage Of The MID

Recently the Pew Organization added some of their findings to the conversation on Tax Reform. They wanted to find out if the benefits of the MID were evenly distributed throughout the country. In other words, where do you stand in relation to other states? 

The percentage of tax filers deducting mortgage interest in 2010 ranged from a high of nearly 37 percent in Maryland to a low of 15 percent in West Virginia and North Dakota.   The Pew Organization's very comprehensive report  can be downloaded HERE

The Beat Goes On

The beat goes on!!!!

Jim Belote's Mortgage Matters shares again the threat to "the bottom of market" wait it out buyers.   

                         YOU MISSED IT!!!

The notes below relate again the reduction in foreclosures, the tightness of inventory and the increase in mortgage rates.  I totally
agree that buyers will, in the future, face the double whammy of higher home values and higher payments.

Sellers:  Be jumping for glee...it is time to put your house on the
             MARKET!

Keeping you updated on the market! For the week of  February 18, 2013 MARKET RECAP Is the End Upon Us? We hope so, and the evidence suggests that it is. This is a good thing, because we are referring to the national foreclosure crisis, which has weighed on the housing recovery (at least it did through mid-2012). RealtyTrac reports that the number of homes in various stages of foreclosure is down to the lowest level since the housing bubble burst. For most of 2012, we said that the overhang of foreclosures and distressed properties would dissipate. Our rationale was that the issues were well-known and understood. Market participants would actively address the issues, and thus, would rectify them. That's exactly what's occurred (and is occurring). RealtyTrac also reports foreclosure starts fell to a 79-month low, reaching levels not seen since June 2006.  We expect foreclosures to continue to trend lower. TransUnion finds that the rate of borrowers 60 days or more past due on a mortgage dropped 14%, the largest reduction since the recession ended in mid-2009. Just as encouraging, many of the delinquencies are a result of older vintage loans – borrowers who haven't made payments for an extended time – and are inflating the overall delinquency rate. We expect housing construction to continue along its trend as well. For-sale inventory – both existing and new – is at a decade low (and possibly a multi-decade low). This points to a rise in construction activity. In fact, Goldman Sachs expects real residential investment to grow at a 10%-to-15% annual rate through 2014. This means we'll also likely see a surge in housing-related employment. Goldman's economic models point to 25,000 new housing-related jobs being formed each month for the next two years. So the stage is set for an uptick in economic growth. This means mortgage lending rates will be pressured to move higher, thus continuing a trend started last fall. We look for higher rates because as the economy improves more money will flow out of fixed-income investments – Treasury and mortgage-backed securities – and into riskier investments. We've already seen a surge in stock-market investments. Both the Dow Jones Industrial Average and the S&P 500 are up strongly over the past three months. The counter argument states that mortgage rates will remain subdued because of the current battle in Congress over sequestration and spending cuts. In other words, market uncertainty is rising, which means investors will be motivated to seek shelter in Treasury and mortgage-backed securities. This might happen, but its impact would be ephemeral. This big-picture view points to economic growth. Economic growth and continued strength in housing will also force the Federal Reserve to exit its open-ended policy of quantitative easing sooner than expected. The bottom line is that anyone who can benefit from a refinance or a purchase loan should take advantage of today's rates. The risk/reward paradigm strongly lists toward taking action; it makes little sense to procrastinate at this point. Economic Indicator Release Date and Time Consensus Estimate Analysis Home Builders' Index (February) Tues. Feb. 19, 10:00 am, ET 48 Index Important. Rising sentiment is reflective of strong pricing and rising consumer demand. Mortgage Applications Wed., Feb. 20, 7:00 am, ET None Important. Record-low inventory is limiting purchase-application activity. Housing Starts (January) Wed., Feb. 20, 8:30 am, ET 918,000 (Annualized) Important. The rate of starts is expected to accelerate through 2013. Consumer Price Index (January) Thurs., Feb. 21, 8:30 am, ET All Goods: 0.1% (Increase) Core: 0.2% (Increase) Important. The current trend in consumer-price inflation is a non-factor to interest rates. Existing Home Sales (January) Thurs., Feb. 21, 10:00 am, ET 4.85 Million (Annualized) Important. Low inventory continues to retard sales growth. Money and Consequences Over the past four years, the Federal Reserve has pumped an unprecedented amount of money into the banking system, which is one reason interest rates have remained so low for so long. This new money has also found its way into many investment assets: Today, the S&P 500 and Dow Jones Industrial Average are at multi-year highs; oil continually hovers near $100/barrel; many metal commodities are near all-time highs, as are many food commodities; gold remains near its all-time high and continues to adhere to its decade-long price trend. More money has also been funneled into housing, especially from institutional investors. Hedge funds are large buyers of single-family houses, which is a new phenomenon. Interest among these institutions appears to be growing. American Homes 4 Rent , a California-based firm specializing in single-family rentals, recently purchased 10,000 homes, making it the second-biggest owner of single-family rentals in the institutional space. The point we need to emphasis is that more money flowing into housing from institutional investors means there will be fewer values available to individual owner-occupied buyers. We've been warning over the past year that the pool of good deals is evaporating. It's important to let clients know that the rate of evaporation is accelerating.