New Weekly Articles - Breaking Bread || Home By Design Weekly Article

Part of Loving Houses is seeing what unique housing ideas are out there.

This week's HomebyDesign article is about re-using an old church for town homes with fascinating history and design.   It is never bad to imagine what are the possibilities.

If ever wondering about the possibilities of a new home, let me know.

For now, relax and enjoy!

New Weekly Articles - Breaking Bread || Home By Design Weekly Article

Have You Missed the Housing Recovery???

As always, Jim Beloit's Mortgage Matters will get you thinking!!    A matter that has been discussed
fully in my blog, news reports and other platform is tightness in financial markets.   Qualified buyers without out hefty down payments or slightly less than stellar credit(guessing Jim is talking under 660 as that seems to be the magic credit score now needed) are being left out of the market.

He restate a National Assoc. of Realtor study that shows only 32% vs typical 45% of first time home buyers have a shot at buying a home right now.  And this is the best time ever to buy a home.

Prices  have improve but aren't in most parts of the country and specifically here in Hampton Roads have not recovered to pre-2008 levels.  So bargains are plenty.  Add historically low 3.5% mortgage money, we should have a very robust housing market.  But as noted the banks aren't in an environment which
encourages them to lend as broadly as they might to qualified buyers that just fall outside the 'stellar buyer' profile.

Read the comments on the silver lining from Sandy!!  Love to hear your thoughts...especially if you live in New York/New Jersey or have family there!

Keeping you updated on the market! For the week of  November 5, 2012 MARKET RECAP “Dog bites man” has been a leading theme as we head toward 2013. By that, we mean we continually report on improving home prices; to the point where home prices are almost no longer longer news. We say “almost,” because after years of reporting on falling prices, we still have a ways to go on the upside to balance the scales. The latest price data from S&P/Case-Shiller added more weight to the rising-price side. Case-Shiller's data show home prices edged up 0.9% month-over-month in August for 19 of the 20 cities it follows. Case-Shiller's data continue to affirm the positive price-trend data issued by other popular pricing providers, such as Zillow, Fiserv, and CoreLogic. Speaking of CoreLogic, its latest data release shows continued improvement in distressed properties. CoreLogic reports that completed foreclosures posted at 57,000 in September, down from 83,000 a year earlier and slightly lower than the 59,000 foreclosures reported in August. Improved pricing and greater demand, which have enabled more short sales, are allowing more underwater borrowers to escape their obligation without foreclosure. The downward trend in foreclosures, along with a gradual clearing of the shadow inventory and rising home price, leave little doubt that we are in the midst of wide-spread housing recovery. Of course, ulta-low mortgage lending rates have aided the recovery in no small measure. Rates today continue to hold their lows (though they haven't been setting new lows lately). Today, the concern, if not the lament, among housing-market participants is credit availability. Last week, we reported on the Mortgage Bankers Association lament that too many qualified borrowers are not getting their loan. Overly strict lending standards, in short, are retarding the speed of the housing recovery. Most of us know that credit availability is a chief concern among first-time home buyers, many of whom lack strong credit scores or large down payments. This segment usually constitutes 45% of the overall home-buying market, but today it's down to 32%, according to the National Association of Realtors. There is still too much uncertainty in the market for lenders to venture farther out on the risk curve. Impending new regulations have lenders understandably nervous. The new regulations will determine risk held by lenders, as well as down payment required for borrowers. To be sure, we need to balance regulation with access to credit, but that's a fine balancing act. What's more, it's not a constant act. The system must be sufficiently flexible to meet market demand.  The good news is that the purse strings show signs of loosening. A recent survey by the Federal Reserve shows that banks, on net, are reporting easing lending standards. (The survey encompasses all forms of credit, not just mortgage.) We think we will see a less restrictive mortgage market in 2013. Economic growth and job creation are expected to improve next year. An improving economy leads to more liberal lending policies and more accommodating regulation. Economic Indicator Release Date and Time Consensus Estimate Analysis Mortgage Applications Wed., Nov. 7, 7:00 am, et None Important. The trend in purchase applications continues to point to higher home sales. Consumer Credit (September) Wed., Nov. 7, 3:00 pm, et $10 Billion (Increase) Important.Rising credit use is reflective of rising consumer confidence. International Trade (September) Thurs., Nov. 8, 10:00 am, et $45.1 Billion (Deficit) Moderately Important. A slight uptick in domestic demand for foreign goods is reflective of economic growth. Import Prices (October) Fri., Nov. 9, 8:30 am, et 0.5% (Increase) Moderately Important. Prices remain subdued and non-inflationary. Uncreative Destruction Hurricane Sandy swept through 12 U.S. states this past week, causing wide-spread flooding and an estimated $10 billion to $20 billion in potential losses, according to research firm Capital Economics. That means a lot of money will be earmarked toward home repairs and new-home construction. Some commentators have viewed this as a silver lining. To be sure, more money spent on housing will help the housing sector, but there is an unseen and a frequently neglected opportunity cost: Money spent on housing is money that could have been spent elsewhere. A natural disaster means money must be spent to replace what already existed; that's money that could have been spent on other goods or services or investments. This lost opportunity to spend elsewhere is what the 19 th century French economist Frederic Bastiat referred to as “the unseen.” Yes, we can see more money being spent on housing, but we can't see where it would have been spent had there been no hurricane. In other words, Hurricane Sandy will provide a boost to housing, which is our gain, but that doesn't translate into a boost to the overall economy because of the lost opportunity to spend elsewhere. The point we want to emphasis is that it's always worth considering Bastiat's the unseen. The seen in housing is improving sales and pricing, but the unseen is what the housing recovery could be if it were unhampered by the exclusion of unfunded qualified borrowers. This unseen is our loss.

VARbuzz: Trulia: Buying 45% (!) cheaper than renting

No Surprise here!!!!  Yet  maybe you didn't know it was 45% cheaper!!!

Read, get off the fence and call your Realtor.    Hampton Roads...call 757 580-6546


VARbuzz: Trulia: Buying 45% (!) cheaper than renting

Economy Isn't as Bad As Might be Believed

HOT NEWS FLASH:

Then again, maybe the economy isn't as bad as many economists believe. Housing has always been a key component in economic growth, and the outlook for housing is pretty darn good these days. In fact, Fannie Mae's Economic & Strategic Research Group believes that increases in residential construction will add 0.2 percentage points to gross domestic product this year. Housing construction and home sales have a cascading effect, producing additional demand for home furnishings and many other retail products and services.

You will find this quote in Jim's Belote's Mortgage Matters below.  It underlies building momentum in the housing market...instead of decreasing the GDP as it has for the last 2 years, housing will add to it once again.

Historically, the Housing Market is a key component of the economic engine that moves the broader U.S. Economy.
Confident home buyers enter the market, increasing the demands for appliances, windows, HVAC systems, furnitures, home decor, bedding and the list goes on.  So suddenly, contractors, salesmen at Home Depot, new Target and Bed Bath & Beyond stores (and their competiton) are needed to supply this growing demand.

As noted, the disappearing "shadow" over the market of the "shadow foreclosure inventory" will eliminate uncertainty from the housing market.  This will boost the housing market.  

Jim's article addresses the real possibility that the "uncertain budget" sequestering still on the table may be resolved via higher taxes and reduced government expenses to curb the high government debt.   Though this may slow the economy a bit, it could cause interest rates, rising recently, to retreat. Won't that be a silver lining to buyers???

Read and respond!!!  Love to chat about it!!

Keeping you updated on the market! For the week of  August 27, 2012 MARKET RECAP Existing home sales gained traction in July, moving up 2.3 percent to 4.47 million units annualized, to partially reverse a 5.4-percent decline in June. The monthly existing home sales trend has been choppy for most of 2012, but going back to July 2011, the trend is mostly higher. Price concessions appeared to be occurring in more existing home markets (or perhaps fewer markets experienced sharper concessions) in July; the national median price for an existing home declined 0.8 percent to $187,300. When viewed from a longer-term perspective, though, the median price looks encouraging – up 9.4 percent year over year. Supply is one frequently mentioned factor for the choppy sales trend. Supply relative to the current sales rate is at 6.4 months, down from 6.5 months in June and 9.3 months in July 2011. Inventory levels remain far below the peak set in 2004. That's good news for prices, but maybe not so good news for sustaining an upward sales trajectory. New home sales, on the other hand, continually make gains. July sales increased 3.6 percent to an annualized rate of 372,000 units, which beat the consensus estimate by 2,000 units. If we go back to June 2011, the trend in new home sales has been mostly up, and mostly unbroken. As with existing home sales, new-home sales experienced a few more price concessions, though mostly in the lower-priced sectors. The national median price dropped 2.1 percent, to $224,200, for July. The dearth of inventory should keep future discounting in check. Inventory is a mere 4.6 months at the current sales pace, a 31-percent decline over the 6.7 months in July 2011. The positive trends in pricing and sales are welcomed news, to be sure. But that doesn't mean everyone is content. Sluggish job growth continues to weigh on the economy, while articles on shadow inventory continue to capture headlines. We are more sanguine than most on the housing recovery. The Wall Street Journal appears to share our sentiment. A recent WJS article reiterated a number of the more salient points we've been hitting on for the past year: namely that shadow inventory is a well-vetted issue, many of the homes in the inventory will never hit market because they are uninhabitable, many of the homes have been converted to rentals, and many of them have been disposed through orderly short sales. The most important takeaway is that shadow inventory is well vetted. It's never the known issues that sink a recovery, it's always the unknown issues – those lurking in the shadows. That said, shadow inventory has long ceased to lurk in the shadows, which is why it really is no longer shadow inventory. Economic Indicator Release Date and Time Consensus Estimate Analysis Consumer Confidence Index (August) Tues., Aug. 28, 10:00 am, et 66.2 Index Important. Recent improvements in retail and new-home sales point to rising confidence. Mortgage Applications Wed., Aug. 29, 7:00 am, et None Important. Purchase activity has stabilized; cash transactions continue to power sales gains. Gross Domestic Product (2nd Quarter 2012) Wed., Aug. 29, 8:30 am, et 1.8% (Annualized Growth) Important. GDP is being revised upward, which suggests economic growth is gaining pace. Pending Home Sales Index (July) Wed., Aug. 29, 10:00 am, et 100 Index Important.Increased contract signings point to future sales gains. Is This Trend Sustainable? Speaking of trends, we'd be remiss not to mention the trend in mortgage rates, which has been rising over the past month. Indeed, the rates on some mortgage products are up over 25 basis points. So the obvious question is, will the trend continue? Opinions are mixed, but they tend to lean toward the trend reversing. Some analysts believe that impending government spending cuts and tax increases, which could occur in 2013, will further slow economic growth. That means money will leave riskier investments like stocks and head for haven investments like U.S. Treasury securities. The demand for these securities, in turn, will lead to lower mortgage rates. Then again, maybe the economy isn't as bad as many economists believe. Housing has always been a key component in economic growth, and the outlook for housing is pretty darn good these days. In fact, Fannie Mae's Economic & Strategic Research Group believes that increases in residential construction will add 0.2 percentage points to gross domestic product this year. Housing construction and home sales have a cascading effect, producing additional demand for home furnishings and many other retail products and services. The rising trend in mortgage rates might be unsustainable, but even if rates reverse course, recent history suggests they aren't going to reverse much lower. Therefore, it's important to remind our home-purchase clients that rates have risen, but any savings achieved by waiting for a reversal could be offset by a higher purchase price. If you wish to unsubscribe, click on the link below and send the email.

Jim Belote's Mortgage Matters is frequently shared on this blog.   Shared for one reason alone:  great facts from the mortgage side on the Real Estate market.

Though I have been a frequently espoused the growing demand, the cause behind the great mortgage rates and slacking inventories/rising or firming prices, Jim's input from the financial side rounds out the chorus.

Scan the article if time is short.  But a read is worth the time.

	Keeping you updated on the market! For the week of  July 2, 2012 MARKET RECAP It's getting easier to understand why home builder sentiment keeps rising monthly: sales and prices are now in an established uptrend. Indeed, new home sales recorded a very solid 7.6 percent increase in May, posting at a much higher-than-expected 369,000 annualized units. Now, it's true that the national median price of a new home sold in May edged down 0.6 percent to $234,500 for the month but when we look at the past 12 months, we see that new home prices are up 5.6 percent. We see no reason why prices will backslide for long. There simply isn't enough supply to satisfy demand. The surge of buying in May lowered new-home inventory to a 4.7-month supply at the current sales rate. This is the lowest inventory level since 2005. Lack of inventory is contributing to firming prices, to be sure, but it's also impeding sales growth. While the new home sales report exceeded the consensus estimate, sales might have posted an even stronger gain if builders had more inventory for sale. Having been burned in the past with false recovery signals, builders have maintained a conservative stance on both “spec” building and co mmunity-count growth, thus limiting sales potential. Low inventory levels could become a greater issue in the existing-home sales market as well. Many of us have already dealt with lack of inventory in certain categories of homes. In many markets, supply is being kept tight for two primary reasons: Negative equity is one and expectations is the other. Potential sellers simply don't want to (or can't) come to the table with additional money, so they don't list their homes. As for expectations, more potential sellers are anticipating rising prices; therefore, they're holding inventory off the market anticipating higher prices. Expectations, in this way, is a self-fulfilling prophesy. Given the trends in inventory and median prices, we weren't at all surprised to read that the S&P/Case-Shiller home price index posted a strong gain in April. In fact, the index surged 0.7 percent – an unusually large gain, last exceeded in April 2010. If you'll remember, back then, the market was riding on the expiration of the federal tax credits for first-time home buyers. The market today is without a doubt much healthier than it was in 2010. We expect the market to remain healthy into the distant future. The NAR reports that home contract signings rose for the 13 th consecutive month, with pending home sales rising 13.3% over May 2011 and nearly 6% over April 2012. According NAR economist Lawrence Yun, we should expect to see a 9 percent to 10 percent improvement in total existing home sales for 2012. The question that looms is, can shadow inventory derail the recovery? It's a legitimate question. After all, there are four million housing units that could potentially come to market as foreclosed or short-sale property. We're not particularly worried, though. We've previously argued that we don't think shadow inventory is a game changer. Banks are processing foreclosures in an orderly and rational fashion, while at the same time they are taking on more short sales. As we like to say, markets are clearing. Here's a another consideration on shadow inventory. We consistently write about housing starts and new home sales, but we rarely talk about lost homes; that is, homes that are lost through neglect, fire, and natural disasters. According to U.S. Census data, we lose an estimated 300,000 housing units from such events, most of these are existing home, and many, we suspect, are in the shadow inventory. So, again, we think the housing recovery is on track for good. Economic Indicator Release Date and Time Consensus Estimate Analysis Construction Spending (May) Mon., July 2, 10:00 am, et 0.2% (Increase) Important. Continued strength in residential real estate construction points to rising new home sales. Factory Orders (May) Tues., July 3, 10:00 am, et 0.3% (Decrease) Moderately Important. Orders are expected to turn positive in coming months on low inventory, thus helping GDP growth. Mortgage Applications Thurs., July 5, 7:00 am, et None Important. Increases in FHA premiums have increased weekly volatility, but the longer-term trends remain positive. Employment Situation (June) Fri., July 6, 8:30 am, et Unemployment Rate: 8.2% Payrolls: 100,000 (Increase) Very Important. Any unexpected divergence from the consensus estimate will move interest rates. It's Not Really Greek To Us Well, mortgage lending rates hit another record low in many markets this past week. This is becoming a weekly occurrence, albeit one in small increments. We mentioned last week how the Federal Reserve has stiffened its resolve to keep long-term lending rates at record lows at least through this year. The Fed is accomplishing this task by rolling short-term securities into long-term U.S. Treasury notes and bonds and mortgage-backed securities. The increased demand in these longer-maturity issues increases their price and thus lowers their yield. The Fed is also being helped by our friends in the Mediterranean, namely Greece. People are often perplexed how Greece's fiscal woes impact our lending markets. The short answer is that we operate in a world financial market, not a national one. That means money and capital easily and frequently cross national borders. Many financial institutions – domestic and foreign – own the sovereign debt issued by other countries. When the risk of owning the debt of a particular country (like Greece) rises, investors sell and often seek haven in less risky securities, like U.S. Treasury securities. As with Fed demand, private investor demand increases prices and lowers yield. Investors have been dumping Greek debt and buying U.S. Treasury debt in recent months, thus helping the Fed to maintain low lending rates. There is a familiar saying “that's Greek to me,” which means “I don't understand.” In this case, it really is easy to understand Greek, when you understand that today's financial markets are global in nature. 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.

Prepare to Buy in 2012: Type of Home

Ready to Build 

 

2012:  The Year of Opportunity

For Home Buyers, 2012 may be the last year of competitive home prices nationwide and historic low interest rates at 4% or better.

So it is time to prepare now!!

         Is a New Home in your plans?

Or do you prepare a previously owned     

                                                   Home?

A big question that all buyers must start with.

Home buyers have found builders aggressive at the beginning of 2011 to unload inventories. Yet, most bank's unwillingness to lend money unless a builder has a house pre-sold has caused the standing inventory(thus quick closings) to dry up.

As a result, New Home Buyers must plan 4-8 months from contract to closing.  This lengthy time between contract to closing requires patience and understanding by the buyer; there are many parts to a house and many contractors involved with unforeseen challenges that can come along.  In addition, due to low inventories, Builder may once again tighten up on incentives and may be less flexible on price and terms.

Typically, resale home(previously owned) do not require the lengthy delay between contract and closing.   Normally, working directly with a seller, responses to offers is 24 to 48hrs with closing in 45-60 days with Home Inspections typically negotiated.  Yet, as foreclosures and short sales promise to continue to be popular among buyers, especially 1st Time Buyers, due to the low prices, buyers of these distressed homes will likely

see delayed responses from banks that can rival New Home time frames.  Secondly, these distressed homes will continue to be sold "AS IS", causing buyers to accept home just as it is with flaws and all.   

In large, non-short sale/foreclosures cost more than short sale and foreclosure homes.  But, typically, the prior are in much better shape and "move in ready" versus the latter.

In conclusion, a buyer seeking to buy in 2012 must determine:

   a) New Home or Previously Owned Home

   b) Time frame home is needed

   c) Willingness to buy home "AS IS"(with warts and all)

   d) Need to feel "I got a great deal"

   e) Need to "do nothing but move in"

Awe...but we only begun. 

Preparing now to buy in 2012 is absolutely the right thing to do.

More tips in next post!!!  

Tell me what you think!! 

                                                Question(s)??? 

      Chime in with your plans to move in 2012 

The Sky IS NOT FALLING

What to Do??? What to Do??? (edit/delete)

The question of the day!!  After two days of "smashing" Wall Street loses, I have heard questions from friends and clients alike about what to do now that the "world is collapsing".

Any one remember Moses' line in the movie "Ten Commandments" when he finds out that he is viewed different now that he has found that he is the son of a Hebrew slave.  He says, "Are these not the same arms, same hands that were mine a moment ago."

Basically, it is the same question we must answer now but with a different basis.  We are the same country with the same economic environment.   We have the same industries, the same 9.2% unemployment, the same 4 to 4.5% mortgage rates, the same declining foreclosure market and strengthening finance/bank environment.

For instance, last Friday's loss on Wall Street at 5% equated to $3 Trillion dollars.  Do you realize that means there is $600 Trillion of your and my money invested for future gain?????   Then imagine the Trillions invested between Commercial and Residential Real Estate. Not to speak of oil reserves, intellectual capital ect ect.

We must stay focused on the big picture and not the sound bites that the news media may use to alarm us as they focus on "the news of the moment".

So if you have investments don't run!

If you plan to buy a new home or business, move forward!!!  Interest rates and banks openness to lend is improving it seems daily.

The future is bright though a few clouds are on the horizon

Bryan Cerny, Associate Broker, GRI, ABR, SRES, SFR
Rose &Womble Realty, Chesapeake, VA
Licensed in VA & NC