REAL-blog-RE

2012-01-27T14:14:00.001-05:00

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2012-01-27T14:01:00.001-05:00

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2012-01-24T23:30:00.001-05:00

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2012-01-24T12:57:00.001-05:00

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2011-12-28T21:35:00.001-05:00

Tom Murphy from M5 give us a beaut in Overbrook, PA....rehab special - www.814north65thstreet.info

2011-12-22T11:07:00.001-05:00

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2011-12-16T10:07:00.001-05:00

Both floors of this Sea Isle City duplex are available for purchase, either separately or together. www.4602CENTRALAVE.INFO

2011-12-14T09:55:00.001-05:00

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2011-12-06T09:33:00.001-05:00

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2011-11-19T01:01:00.001-05:00

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2011-11-19T00:36:00.001-05:00

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2011-10-27T11:35:00.001-04:00

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2011-10-27T08:40:00.001-04:00

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2011-10-26T22:07:00.001-04:00

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2011-10-20T13:48:00.001-04:00

Thank you all for such a warm welcome to these new networking sites. Videos to follow.

Philadelphia L&I to step up inspections of rental housing

2010-01-09T13:53:00.001-05:00

Philadelphia's Department of Licenses (L & I) and Inspections is stepping up scrutiny of rental properties in the hope of improving upkeep and safety of city housing. L&I is targeting properties that have lapsed housing licenses, which landlords must renew yearly for $50. L&I had conducted such inspections for years but stopped doing so under former Mayor John F. Street. The city estimates there are 50,000 residential rental properties in Philadelphia. L&I hopes to inspect about 10,000 this year.

In December, Councilmen James F. Kenney and Frank DiCicco won unanimous City Council approval for a bill requiring inspections every five years for building exteriors. Initial inspections are to be completed by June 30, 2011, for buildings six stories or taller built before 1950; newer buildings are to have their first inspections between 2012 and 2015, based on their age. Building owners, not L&I, are responsible for the inspections. Click here to visit the Philadelphia Department of Licenses and Inspections.

Source: Philadelphia Inquirer; 1/7/10

Pending Home Sales Down From Surge

2010-01-09T13:43:00.000-05:00

Daily Real Estate News | January 5, 2010

Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit. However, it remains comfortably above the level from a year ago, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 16 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.

Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”
Buyers who have a contract in place to purchase a primary residence by April 30 have until June 30 to finalize the transaction to qualify for the tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

By Region

The PHSI in the Northeast dropped 25.7 percent to 74.4 in November but is 14.7 percent above a year ago.

In the Midwest the index fell 25.7 percent to 82.0 but is 9.2 percent higher than November 2008.

Pending home sales in the South fell 15.0 percent to 97.8, but are 14.7 percent higher than a year ago.

In the West the index declined 2.7 percent to 124.6 but is 21.4 percent above November 2008.

Interest Rates Likely to Go Higher
Yun projects an additional 900,000 first-time buyers will qualify for the extended tax credit, in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit.

“Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.

Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job-growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.

Source: NAR

Homebuyer Credit Gets New Life

2009-10-30T14:06:00.001-04:00

Daily Real Estate News | October 29, 2009

Homebuyer Credit Gets New Life

Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years.

Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.

Source: Wall Street Journal, Corey Boles and John D. McKinnon (10/29/09)

Senate Dems on Board with Credit Extension

2009-10-28T13:23:00.001-04:00

Daily Real Estate News | October 28, 2009

Senate Dems on Board with Credit Extension
Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.

Source: Bloomberg News, Dawn Kopecki and Ryan Donmoyer (10/27/2009)

Pending Home Sales on a Record Roll

2009-09-08T19:20:00.003-04:00

Daily Real Estate News September 1, 2009

Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June. It is 12 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007, when it was 100.7.

Affordability at Record High
Lawrence Yun, NAR chief economist, says the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he says.

“Other buyers are taking advantage of low home values before prices turn higher," Yun says. "Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable."

First-Time Buyers
NAR estimates that about 1.8 to 2 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by Nov. 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.

By Region
Northeast: The Pending Home Sales Index declined 3 percent to 78.8 in July but is 4.7 percent higher than July 2008.

Midwest: The index slipped 2 percent to 88.1 but is 8.1 percent above a year ago.
South: Pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12 percent above July 2008.

West: The index jumped 12.1 percent to 112.5 and is 20 percent above a year ago.Keep the Momentum Going"
NAR President Charles McMillan says Congress needs to keep the momentum going. “Even with a good recovery taking place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices,” he says. “To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy.” NAR’s Housing Affordability Index stood at 158.5 in July, below the peak set in April but is still 36 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates, and family income.

Yun expects existing-home sales to rise through the fourth quarter. “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year,” he says. “However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later?’ to ‘I don’t want to miss out on a recovery.’”

Source: NAR

Banks Plan to Keep Lending Tight

2009-08-23T19:45:00.000-04:00

Daily Real Estate News August 18, 2009

Banks tightened standards for all types of loans in the second quarter, the Federal Reserve reported Monday.

About 35 percent of senior loan officials said they tightened standards somewhat and none of the 51 responding banks said they loosened standards for prime mortgages. The rest said their standards for mortgages remained the same or were substantially stronger. Banks also told the Fed that they expected to maintain strict lending standards until at least the second half of 2010.

“Most banks have woken up to the fact that there is a lot more risk in their loan books than they ever thought possible,” says Joel Conn, president of Lakeshore Capital LLC in Birmingham, Ala. That has caused many banks to reconsider their requirements for future lending, Conn says.

Source: Bloomberg, Craig Torres (08/17/2009)

NAR: Commercial Market Decline Slowing

2009-08-23T19:44:00.001-04:00

Daily Real Estate News August 19, 2009

The decline in commercial real estate activity caused by a severe credit crunch, sustained job losses, and weak consumer spending appears to be slowing, according to the National Association of REALTORS®' latest report. A forward-looking indicator shows commercial real estate will remain weak into 2010, but recent actions by the Federal Reserve should improve some flow of capital into commercial lending, NAR reports.

Average Buyers Can Afford Most Homes

2009-08-23T19:42:00.000-04:00

Daily Real Estate News August 20, 2009

Housing is remarkably affordable these days.A family earning the nation’s median income of $64,000 a year could afford to buy 72.3 percent of all homes sold in the United States during the second quarter of 2009, according to the National Association of Home Builders and Wells Fargo.

Sellers are the ones who are paying the price. More than 30 percent of all homes sold during the second quarter sold for less than the sellers paid originally, according to Zillow.com.

A significant percentage of owners who bought within the past five years and sold during the quarter lost money on the deal, according to Stan Humphries, Zillow's vice president in charge of data and analytics.

[Editor's note: Although discussion of trends on a national level can be useful, conditions in a local market can be vastly different from what's happening statistically on a national level. For that reason, conditions for owners who've bought in the last five years might or might not resemble what analysts are seeing statistically on a national basis.]

Source: CNNMoney.com (08/19/2009)

Strong Gain in Existing-Home Sales

2009-08-23T19:39:00.001-04:00

Daily Real Estate News August 21, 2009

For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of REALTORS®.Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June. Sales are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.

Largest Gain in a Decade

Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said. The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.

“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower-priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June. The rate was 6.43 percent in July 2008.

"First-Time Buyer Tax Credit is Working"

An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions. NAR President Charles McMillan said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said. “Realtors are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”

Inventory Up, Prices Down

Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record. The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

Single-Family Homes and Condos

Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.

Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price was $178,800 in July, down 18.9 percent from July 2008.

By Region:
The Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.

Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.

In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.

Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.

Source: NAR

Yearsley building to be demolished

2009-08-17T20:29:00.001-04:00

West Chester Borough Council is poised to give McCool Properties permission to complete demolition of the former M.S. Yearsley building, a blighted structure that sits at 124 E. Market St. Once demolition is complete, the site may temporarily be converted into a parking lot, which the borough may opt to lease. McCool Properties acquired the Yearsley building in 2005 and has obtained permission to replace it with a seven-story structure which will contain 64 condominiums and 24,000 square feet of retail space. Andrew McCool said that the down economy has slowed pre-sales of the condo units, which means that construction has not proceeded as quickly as intended. Councilman Jim Jones explained that, in order to cut down on empty lots, the borough typically forbids developers from demolishing buildings too far in advance of when they plan to construct new ones in their places.

Source: Daily Local; 8/14/09

PA To Fund Solar Initiatives for Homeowners

2009-08-10T22:06:00.001-04:00

Check out this latest news on the Pennsylvania residential solar initiative on my website: http://www.calljohncap.com/remaxpaaction/modules/agent/agent.asp?p=text&id=1692

Foreclosure Bargains Are Disappearing

2009-08-08T15:21:00.002-04:00

Daily Real Estate News August 7, 2009

Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.

"For every listing that comes out, we have 10 buyers," says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif.

Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show. "We had a lot of inventory last summer. Now we're down to 1,500 listings — from more than 5,000," Dias says.

In Florida, real-estate investment companies, buying in bulk and paying cash, face competition.

Even in the hard-hit Detroit area, bargains are disappearing. "For a good house that's not too beat up, in a good neighborhood, there's no lack of buyers in this market," says Andy Sakmar, founder of Century 21 Sakmar in Rochester, 20 miles north of the city. "There are a lot fewer of these properties than a year ago, and the super buys get multiple offers."

Source: CNNMoney.com, Les Christie (08/06/2009)

Economists Optimistic That Market Is Upward Bound

2009-07-31T21:10:00.000-04:00

Daily Real Estate News July 27, 2009

Economic recovery is still a few months away, say economists surveyed by USA Today, but two-thirds of them think existing-home sales have bottomed out. Both housing and automotive markets “have the potential to generate some quite large percentage increases,” says Bill Cheney, chief economist at MFC Global Investment.

Overall, economists say unemployment won’t peak until the first half of next year and credit markets will remain tight.

Source: USA Today, Paul Davidson; Barbara Hansen (07/27/2009)

Housing Experts: Now Is a Perfect Time to Buy

2009-07-24T13:43:00.001-04:00

Daily Real Estate News July 20, 2009

Don’t forget to remind potential buyers of something that is obvious to real estate professionals: Now is the time to buy, but that opportunity may be slipping away. For people who have a job and money, a dream house is within reach, writes Marc Roth, founder of Home Warranty of America and a columnist for BusinessWeek. He points out that mortgage rates remain low, prices are still at historic lows, and the government is offering incentives for first-time homebuyers.

He also adds that the inventory of homes to buy is still large, but it is shrinking. According to the NATIONAL ASSOCIATION OF REALTORS®, the housing inventory peaked in November 2008 at an 11-month supply. At the end of May 2009, it had fallen to a 9.6-month supply.

Roth says anyone who dallies will miss a good opportunity to buy a first home at a terrific price or go shopping for a move-up property that is a great buy.

Source: BusinessWeek.com, Marc Roth (11/17/2009)

Real Estate Pro Killed in Foreclosed Home

2009-07-24T13:42:00.001-04:00

Daily Real Estate News July 20, 2009

A real estate practitioner showing a foreclosed home in a community outside Los Angeles discovered the body of a second real estate professional, identified as Ricardo Contreras, 45 of Lakewood, Calif.

Family members identified Contreras, 45, as a real estate professional and father of five who had gone missing on July 14. Officer Karen Rayner said the practitioner who found the body had been unable to locate a key to the three-bedroom home in the 8900 block of Kittyhawk Avenue near the Los Angeles International Airport. He apparently called the listing company, Modern Realty Co., which sent someone to help open the door. Rayner said that together they discovered the body of Contreras, who was lying on the living room floor. According to news reports, he was believed to have been stabbed several times.

Source: The Associated Press and KABC (07/19/2009)

Report: New-Home Construction Increasing

2009-07-20T23:29:00.000-04:00

Daily Real Estate News July 17, 2009

Despite high unemployment and general concerns of too much existing inventory, new-home construction appears to be rising.

According to Friday’s report from the U.S. Commerce Department, construction of new homes rose 3.6 percent in June compared to May. Building permits climbed 8.7 percent, and single-family home starts jumped 14.4 percent to 470,000, after rising 5.9 percent in May.

In real numbers, ground was broken for an estimated 58,300 houses nationwide in June, and an estimated 58,400 building permits were issued. Here’s a look at housing starts in different U.S. regions:

Midwest: up 33.3 percent
Northeast: up 28.6 percent
South: down 1.4 percent
West: down 14.8 percent

Source: The Wall Street Journal, Jeff Bater (06/17/2009)

West Whiteland deed dispute ends

2009-07-10T23:11:00.001-04:00

The township will get the deed to the land for its new municipal building, a judge ruled this week, and the township must pay the developer $242,063 in back taxes. This is good news for the township, where construction of a $16.8 million municipal building has gone forward without clear title to the land on which it sits.

According to court documents, the $242,063 in taxes includes $12,078 paid to the township, $45,394 paid to Chester County and $184,589 paid to the school district.

The developer refused to turn over the deed until the back taxes were reimbursed, and in November 2005 the township filed an emergency petition to enforce the settlement agreement and turn over the deed.

Source: Daily Local; 7/3/09

NAR: Existing-Home Sale Continue to Rise

2009-06-26T17:07:00.001-04:00

Daily Real Estate News June 23, 2009

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the NATIONAL ASSOCIATION OF REALTORS ®. May’s increase was the first back-to-back monthly gain since September 2005.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April. Sales remained 3.6 percent below the 4.95 million-unit pace in May 2008.

Lawrence Yun, NAR chief economist, expected an improvement in sales. “Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” Yun says. “First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory.

Poor Appraisals Stall Transactions

However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.

Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April.

Yun says the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he says. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”

NAR President Charles McMillan says appraisals and the tax credit are key issues. “To maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist,” he said. “In addition, the first-time buyer tax credit should be expanded to all buyers of primary homes regardless of income. Extending the credit into 2010 would allow more time for the market to catch up with underlying demand, in part because many families with children, who normally time their purchase based on school year considerations, do not have enough time to move before the start of school in late August.

“Freeing a pent-up demand in housing will absorb inventory at a faster pace, strengthen communities and stabilize home prices earlier,” McMillan said.

A Closer Look at May Housing Data

An NAR practitioner survey in May showed first-time buyers accounted for 29 percent of transactions, and that the number of buyers looking at homes is nearly 10 percentage points higher than a year ago. “This is the time of year when we see large increases in the number of repeat buyers, who are benefiting from sales to entry-level buyers,” Yun says. “Investors appear less active, but are more prevalent in areas with large price corrections.”

National median existing-home price: for all housing types was $173,000 in May, down 16.8 percent from a year earlier. Distressed properties, which declined to 33 percent of all sales in May from 45 percent in April, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. “The decline in the distressed sales share likely results from an increase of repeat buyers in May,” Yun says. “First-time buyers are concentrated in the lower price ranges, which include most of the distressed sales.”

Single-family home sales: rose 1.9 percent to a seasonally adjusted annual rate of 4.25 million in May from a pace of 4.17 million in April, but are 3 percent below the 4.38 million-unit level in May 2008. The median existing single-family home price was $172,900 in May, down 16.1 percent from a year ago.

Existing condominium and co-op sales: increased 6.1 percent to a seasonally adjusted annual rate of 520,000 units in May from 490,000 in April, but are 8.9 percent below the 571,000-unit level in May 2008. The median existing condo price was $173,800 in May, down 21.9 percent from a year earlier.

By the RegionHere’s how housing fared across the country for existing-home sales:

Northeast: rose 3.9 percent to an annual level of 800,000 in May, but are 10.1 percent below a year ago.
Median price: $243,600, which is 12.5 percent below May 2008.

Midwest: jumped 9 percent in May to a pace of 1.09 million but are 4.4 percent below May 2008.
Median price: $145,800, which is 10.4 percent lower than a year ago.

South: unchanged at an annual pace of 1.74 million in May but are 8.9 percent below a year ago.
Median price: $157,400, down 9.9 percent from May 2008.

West: slipped 0.9 percent to an annual rate of 1.14 million in May, but are 11.8 percent higher than May 2008.
Median price: $197,700, down 30.6 percent from a year ago.

Source: NAR

Home Buyer Tax Credit Could Expand

2009-06-26T17:05:00.000-04:00

Daily Real Estate News June 22, 2009

A first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle. Now both legislators and the business community are hoping to build on the incentive's success by expanding it. A number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes:

Setting a new cap of $15,000.
Extending the tax break into mid-2010.
Making the benefit available to all home buyers, not just first-timers.
Offering a separate tax credit to $3,000 for borrowers who refinance.

USA Today, Stephanie Armour (06/22/09)

Top Rising, Falling Housing Markets

2009-06-26T17:04:00.000-04:00

Daily Real Estate News June 26, 2009

When the recovery in housing finally comes, some housing markets will rebound sooner than others.

Real estate forecasting service Local Market Monitor, which covers the nation’s 300 largest markets, has identified 13 markets where it predicts home prices will rise in the coming months and 11 markets where it expects home prices will continue to decline significantly.

To make these picks, Local Market Monitor uses a proprietary formula.

Here are the 13 markets where it expects prices to rise:
Baton Rouge, La.
Buffalo-Niagara Falls
Dallas-Plano-Irving
Fort Worth-Arlington
Houston-Sugar Land-Baytown
Little Rock-North Little Rock-Conway, Ark.
McAllen-Edinburg-Mission, Texas
Oklahoma City
Rochester, N.Y.
San Antonio
Syracuse, N.Y.
Tulsa
Wichita, Kan.

Here are the 11 markets where it believes home prices will continue to decline:

Bakersfield, Calif.
Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla.
Fresno, Calif.
Las Vegas-Paradise
Miami-Miami Beach-Kendall
Orlando-Kissimmee
Oxnard-Thousand Oaks-Ventura, Calif.
Phoenix-Mesa-Scottsdale
Riverside-San Bernardino-Ontario, Calif.
Stockton, Calif.
West Palm Beach-Boca Raton-Boynton Beach, Fla.

Source: Local Market Monitor (06/23/2009)

Ecovillage to open in London Grove

2009-06-13T01:03:00.000-04:00

A new housing development is being proposed in London Grove that would feature homes where nobody has to pay an electric bill and a clubhouse where residents prepare and eat a communal dinner a few nights a week. The cohousing community, where people would live in their own homes but share communal facilities, would also be built with an eye toward being environmentally sustainable, incorporating features that will earn it a LEED certification, a green building standard of the U.S. Green Building Council.

Known as an ecovillage, all the houses will utilize solar and geothermal energy for their heating and cooling.

Known as Three Groves Ecovillage, the development would be located on a 7.5 acre parcel on the corner of Prospect Avenue and West State Street. The approval process for the development will take about a year and investors are hoping the first construction would begin in the later part of 2010.

Source: Daily Local; 6/7/09

Norristown movie studio receives recommendation from planning commission

2009-06-13T01:02:00.000-04:00

The $100 million Studio Centre renovation of the former Logan Square Shopping Center on Markley Street received a unanimous recommendation from the Norristown Planning Commission this week. Norristown’s council is expected to consider the final site plans at its next meeting on June 16. Council’s approval of the plan is contingent upon a $10 million direct state subsidy and an $8 million tax increment financing (TIF) plan that requires the approval of Norristown, Norristown Area School District and the Montgomery County Commissioners.

The current plans for the studio include 72,000-square-feet of studio space divided into five soundstages, 98,000 square-feet of movie support space, a 50,000 square-foot supermarket and 20,000 square-feet of new retail space.

If final approval is granted and the movie studio construction moves forward, area leaders expect this to be a catalyst to jumpstart Norristown’s revitalization.

Source: The Times Herald; 6/10/09

Top 10 Best Places to Live U.S.

2009-06-12T16:53:00.001-04:00

Daily Real Estate News June 10, 2009

News & World Report magazine looked at areas with strong economies, low living costs, and plenty of fun things to do to identify this year's best places to live.

The editors reviewed more than 2,000 locations nationwide, considering such factors as sales taxes, housing prices, average number of children per square mile, proximity to healthcare, and the availability of educational institutions. Readers can use a database search to tailor the results to their own situation."Choosing where to live is a difficult decision for any family," says Brian Kelly, editor of U.S. News & World Report. "With U.S. News's Best Places to Live, we've crunched the most important geographic, economic, and educational data and provided the search tools to help make this decision a little easier for families."

The 10 cities honored as Best Places to Live are (listed alphabetically):

Albuquerque, N.M.
Auburn, Ala.
Austin, Texas
Boise, Idaho
Durham, N.C.
La Crosse, Wis.
Loveland, Colo.
San Luis Obispo, Calif.
St. Augustine, Fla.
Upper St. Clair, Pa.

Source: U.S. News & World Report (06/09/2010)

Update: FHA backs away from no down payment loans

2009-06-10T11:54:00.001-04:00

June 2, 2009 1:51 pm

After announcing a plan that would have allowed first time homebuyers to use a special tax credit to cover the 3.5% required down payment on an FHA-insured loan, the Dept. of Housing and Urban Development apparently had second thoughts.
Late last week HUD released a newly remodeled plan that does not allow the first-time homebuyer tax credit to be used for the down payment. Seems there was plenty of push back that allowing borrowers to land a mortgage without any “skin in the game” was not exactly a great idea. What’s amazing is that the proposal even got floated in the first place; the notion that taxpayer dollars would have been on the line for mortgages that required no down payment was a bit of a head spinner.

What HUD finally settled on was that lenders can essentially advance qualified home buyers the value of their tax credit today to reduce their mortgage costs, but only if the borrower can bring a minimum 3.5% down payment to the table. Approved uses of the tax credit include paying for closing costs, making a larger down payment (to thereby reduce the monthly mortgage cost) or buying down the interest rate by paying points. The real value of the new rule is that eligible homebuyers can now “use” their tax credit today, rather than having to wait to recoup the value of the credit when they file their 2009 federal tax return in early 2010.

Basically, if you meet the eligibility rules you can now get a maximum of $8,000 advanced to you to buy a home. Single homebuyers with income below $75,000 and married couples who file a joint return with income below $150,000 are eligible for the max tax credit. (A limited credit is available for individuals with income between $75,000-$95,000 and joint filers with income between $150,000 and $170,000; the credit completely phases out above those income levels.) Anyone who has not owned a primary residence for three years is considered a first-timer, but to grab the tax credit you must close on an FHA-insured loan before December 1 of this year.

– Carla Fried

DASD plans 2.5% property tax hike

2009-06-08T00:23:00.001-04:00

Residents living in the Downingtown Area School District will see a tax increase of about 2.5 percent next school year, finance administrators said at a meeting on Tuesday night. The school board approved the preliminary 2009-10 budget in February. At that time, the budget stood at $184 million and included a 3.75 percent property tax increase.

At Tuesday's finance meeting, district officials announced that the budget now stands at $183.9 million and includes a 2.5 percent tax increase. This is the lowest proposed tax increase the district has had in 14 years. A 2.5 percent hike would raise the tax rate to 25.48 mills, with one mill equal to $1 in tax for every $1,000 in assessed property value.

An average taxpayer with a home in the district assessed for tax purposes at $175,000 would therefore generate a school property tax bill of $4,459 — an increase of $109.28 over the prior year. Eligible residents will receive a tax credit of $209 in their school property tax bill from slot revenues.

The school board is expected to vote on next year's budget at its June 10 meeting.

Source: Daily Local; 5/29/09

West Chester School District hikes taxes 5.9% in Chester County and 9.4% in Delaware County

2009-06-08T00:21:00.001-04:00

School taxes for property owners in the Chester County portion of the West Chester Area School District will increase by 5.9 percent next year. For property owners in the district's Delaware County section, school taxes will go up 9.4 percent.

The West Chester Area School Board approved a 2009-2010 final budget on Monday night that calls for $198.7 million in spending. This represents an increase of 3.3 percent over the current year budget, but it comes in the face of a decrease of 6.6 percent in local tax revenue, the district's biggest source of funding, district officials said.

Earlier this year the board approved a preliminary budget that included a 6.6 percent tax increase for Chester County and a 10.1 percent increase for Delaware County. The board's finance committee last week recommended dropping these increases a full percentage point.

The 2009-2010 tax increase is above the limit set by Act 1, but it does not need to go to referendum, officials said, because the district was able to use several Act 1 exemptions.

The district in December 2008 projected a $13.3 million 2009-2010 budget deficit, but due to budget cuts and federal stimulus funding, the gap has been brought down to $6.4 million. The average residential tax bill in the District's Chester County portion will be $3,391, while the average bill in the District's Delaware County portion will be $4,036, officials said. This is based on an average Chester County assessed value of $189,950, and an average Delaware County assessment of $285,000. The millage in the district's Chester County portion will rise 1 mill, to 17.85 mills, while the millage in the district's Delaware County portion will rise 1.22 mills, to 14.16 mills. A mill is a dollar of tax on $1,000 of a property's assessed value.

Source: Daily Times; 5/27/09

Pending home sales rise 6.7 percent in April

2009-06-08T00:17:00.003-04:00

By ALAN ZIBEL

WASHINGTON (AP) — The number of U.S. homebuyers who agreed to buy a previously occupied home took the largest monthly jump in nearly eight years in April, but there are still plenty of danger signs for the U.S. housing market.

Home sales appear likely to head upward this summer, potentially to levels not seen since the stock market collapsed last autumn, but prices are expected to keep falling well into next year. Layoffs, which are causing foreclosures to soar, coupled with rising mortgage rates could dampen any real estate recovery.

The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.

The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by Obama in February. Since buyers need to complete their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a statement.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.

While economists are encouraged by signs that demand for housing is returning, the outlook is far from sunny. Mortgage rates are rising, making homes less affordable for many borrowers. The average rate for a 30-year, fixed-rate mortgage is around 5.3 percent this week compared with about 5 percent last week, according to Bankrate.com.

Stock indexes advanced modestly in morning trading, but then traded in a tight range around the break-even point. Financial stocks fell after several banks announced plans to raise capital to help repay federal bailout funds.

The health of the U.S. housing market, mired in a three-year slump, is one of the key issues facing the economy. Though sales may be recovering, analysts cautioned that prices will take longer to stabilize because of the glut of unsold properties for sale. Prices are unlikely to rise until foreclosures start declining, and that's unlikely to happen before the end next year.

The national median sales price in April plunged more than 15 percent from year-ago levels to $170,200, driven by sales of inexpensive foreclosures and other distressed low-end properties. That was the second-largest yearly price drop on record, according to the Realtors' group.

Still unknown is the effectiveness of President Barack Obama's $50 billion plan to prevent foreclosures by modifying loans in bulk. Analysts are growing worried that it will not have a substantial impact.

"I haven't seen evidence yet of any significant modifications," said Mark Zandi, chief economist at Moody's Economy.com. "I was hoping that we would see more of a pickup."

The Realtors' index of pending sales contracts was 3.2 percent above last year's levels and has risen for three straight months after hitting a record low in January. A nearly 33 percent sales increase in the Northeast and a 9.8 percent jump in the Midwest led the overall surge. Sales contracts were flat or up slightly in the South and West.

Still, Yun cautioned that the pending sales data is more volatile than in the past. Many homeowners need to sell their properties for less than the balance they owe on their mortgages — a so-called "short sale" — which requires the lenders' approval. That process is often difficult, time-consuming and can fall apart before the deal closes.

Copyright © 2009 The Associated Press.

Tax Credit Can Be Used for Down Payment

2009-05-13T17:20:00.001-04:00

Daily Real Estate News May 12, 2009

Tax Credit Can Be Used for Down Payment Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C.

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Developers propose shopping center for The Flats in Coatesville

2009-05-01T20:31:00.000-04:00

Without a slide show, architectural renditions or any other frills, developers hoping to put a grocery store and other retail shops on what is currently a contaminated, desolate site made their pitch to City Council on Monday night. City Council did not take any action on the proposal, which the city's Redevelopment Authority approved last week. But council is expected to support or reject the plan at its May 11 meeting.

Mosaic developers said they hope to construct a roughly 82,000-square-foot shopping center with a grocery store as an anchor. It will occupy the southern half what is known locally as The Flats — 26 acres north of West Lincoln Highway and west of Route 82 along the east bank of the Brandywine Creek. It's still unclear what will be done with the northern portion of the site. Previously, Iacobucci Homes was in the mix with the intention of building row homes and condominiums on the site. But the company has since pulled out of the project.

Last week, Chetty Builders and The Shelter Group presented their hopes for the site to the authority.

Chetty Builders' plan includes building about 90 townhouses. The Shelter Group told the authority it would like to build about 75 apartments for senior citizens at The Flats. The authority has made no decisions on either company's proposals.

Source: Daily Local; 4/30/09

West Goshen residents fret road-widening project

2009-05-01T20:29:00.000-04:00

West Goshen Township's plans to widen a section of Boot Road near the Route 202 interchange to deal with heavy traffic from QVC and other business parks has drawn the ire of local residents. The area to be widened is Boot Road between Greenhill Road and Wilson Drive.

Township Manager Casey LaLonde said the project, which is a joint endeavor of West Goshen and East Goshen, is just in a preliminary stage. The Pennsylvania Department of Transportation has not approved it yet.

The township plans to hold a meeting with residents regarding the Boot Road corridor improvements at 7 p.m. May 14.

Source: Daily Local; 5/1/09

West Chester approves 87 townhomes for Davis Lumber site

2009-05-01T20:28:00.000-04:00

West Chester Borough Council granted Davis Realty Holdings final approval to build 87 townhomes on the 3.85-acre Davis Lumber site at Franklin and Barnard streets.

The Davis Lumber site is in an industrial sector of the borough and is near the former site of Wyeth Pharmaceuticals, which is also considered a prime candidate for residential redevelopment. Hunter Davis, who owns the lumberyard, declined to say when construction would begin. Davis first submitted development plans for the site last summer. The first draft of the plan showed 98 townhomes, but due in part to stormwater issues, the number of residences has been reduced. Davis' site is one of the few remaining lots in the borough suited to a large-scale housing development.

McCool Properties recently received preliminary approval to build 58 townhomes on another such parcel, the former Bishop Shanahan High School site at West Gay and Brandywine streets. Some borough officials have criticized Davis' proposal, saying it is too dense and could create traffic problems in surrounding neighborhoods. However, the proposal conforms to borough zoning, leaving Borough Council members little power to negotiate the number of planned homes.

Source: Daily Local; 4/27/09

Top Economists Say Recovery Has Begun

2009-04-20T19:35:00.000-04:00

Daily Real Estate News April 7, 2009

Economic recovery is about making people feel more confident, says Mark Zandi, chief economist of Moody’s Economy.com. Zandi evidenced increasing home sales and gains in the stock market are some promising signs that the worst is over and people will start spending again.“We’re starting to see some pent-up demand for goods,” he says.

But Zandi warns that the situation is still fragile. "Confidence is a very fickle thing. It can go from abject pessimism that pervades now to a more balanced view of the world rather quickly.”

Robert Brusca of FAO Economics is predicting strong growth in the last half of the year and a quick recovery for the labor market. "You've lost 5 million jobs. It shouldn't be hard to put 2.5 million jobs back on rather quickly after you hit bottom," he said.

Joseph Carson, chief economist at AllianceBernstein, calls improving home sales, a rising stock market, and better-than-expected retail sales in February and March good signs of a turnaround. By the time President Obama’s stimulus package takes effect, the economy will be ready, he says. "The stimulus has a much better chance of working if trends are already turning up than if it needs to halt a decline," he said.

Source: CNNMoney, Chris Isidore (04/06/2009)

10 Riskiest U.S. Housing Markets

2009-04-20T19:29:00.001-04:00

Daily Real Estate News April 8, 2009

Even with hints of a housing recovery in some places, risky markets, dominated by nonprime mortgages, still prevail in a number of areas. Forbes magazine and Moody’s Economy.com surveyed the 200 largest metropolitan areas, adding up the number of loans to low-rated borrowers and dividing that sum by the total number of mortgages to calculate the percentage of each area’s market that is below prime.

Here are the 10 metro areas with the highest percentages of nonprime mortgages, which makes them susceptible to defaults as unemployment rates continue to rise.

Mission, Texas
Detroit
Miami
Brownsville, Texas
Merced, Calif.
Lakeland, Fla.
Bakersfield, Calif.
Fort Lauderdale, Fla.
San Bernardino, Calif.
Visalia, Calif.

Source: Forbes, Maha Atal (03/31/2009)

Route 29 ramp supporters say turnpike commission slipped up

2009-04-19T20:16:00.000-04:00

Members of both political parties in Chester County are decrying the Pennsylvania Turnpike Commission's recent decision to suspend work on the Route 29 slip ramp to the turnpike in Charlestown.

The long-planned project was designed to decrease traffic congestion on Route 202 and nearby residential roads. The slip ramp would feature unmanned toll booths that allow motorists with E-ZPass to get on and off the turnpike between the Downingtown and Valley Forge exits.

The decision to shelve the project followed a decision to halt a turnpike widening project set for the 13-mile stretch between those exits. The turnpike commission issued a statement that the decision to suspend development was made in reaction to a major cost increase required to meet the demands for alternative stormwater-control methods that include features such as spray irrigation and underground storage.

The (commission) has investigated several alternative stormwater-control methods and concluded that the requested methods would increase overall construction costs by as much as 50 percent.

The Route 29 slip ramp had been anticipated for years. As recently as 2007, the commission trumpeted it as the answer to traffic concerns in the Great Valley area.

Source: Daily Local; 4/12/09

PA limits Transco gas pipeline project

2009-04-19T20:15:00.000-04:00

The state Department of Environmental Protection (DEP) has granted natural gas company Transco the permits it needs to begin work on the controversial Downingtown pipeline replacement project — with one important exception. Transco does not have permission to start construction in a 2,600-foot segment that spans the East Branch of Brandywine Creek in East Brandywine and East Caln.

The most environmentally sensitive way to cross the creek would be by horizontal directional drilling, which involves digging under the creek, proponents of this method said. But Transco resisted this approach, saying it would be too expensive. Instead, the company proposed a cross-cut method, which diverts surface waters. But this approach would release a lot of sediment into the creek, which is a source of drinking water in Chester County, and so state legislators appealed to state DEP Acting Secretary John Hanger to carefully review Transco's permit applications.

The DEP issued a statement Thursday saying that while the agency has granted the permits that Transco needs to start construction, the company must submit an amendment advising the state how it proposes to proceed in the 2,600-foot section around the creek. About 177 county residents are affected by the project.

Source: Daily Local; 4/12/09

Federal Housing Rescue Plan Launches

2009-04-19T20:12:00.001-04:00

Daily Real Estate News April 17, 2009

The Obama Administration’s program to rescue distressed home owners got off the ground this week. The program was announced on Feb. 18, but it took several weeks to put the bureaucracy in place.

Six of the nation’s largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.

Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.

The plan calls for loan servicers to reduce interest rates so a family’s monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.

Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments—and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.

Source: CNN, Tami Luhby (04/16/2009)

Signs Point to Improving Economy

2009-04-19T20:09:00.001-04:00

Daily Real Estate News April 17, 2009

Economic observers point to several factors that indicate the economy in general and the housing market in particular may be on the mend.Positive signs include:

● Sales of single-family homes in March remained flat compared to January and February at $358,000, the U.S. Commerce Department reported.

● The Labor Department reported claims were down in the week ending April 11. While some argued this could just reflect the shortened Easter/Passover holiday, others took the optimistic view that some segments of the economy are stabilizing.

● New-home construction remains low because there is so much inventory—but the situation doesn’t appear to be worsening.

"The economy is still very weak, but there are some encouraging signs that support cautious optimism," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech Thursday.

Source: The Wall Street Journal, Sudeep Reddy (04/17/2009)

West Chester Officials recommend condo plans

2009-04-09T14:42:00.000-04:00

A local developer's proposal to build 58 townhouse-style condos on the former Bishop Shanahan site got a favorable recommendation from West Chester Borough's Planning Commission on Tuesday. The planning commission recommended that borough council give McCool Properties' proposal preliminary approval. Should borough council grant this approval, McCool would have to make minor adjustments to the project and seek final approval.

Chris McCool, of McCool properties, said he hopes to get final approval by June, to begin marketing the townhomes by late summer, and to break ground by late fall 2009 or early spring 2010. According to current plans, the townhouses will be three stories with a two-car garage underneath; they will have three to four bedrooms, 2.5 baths, and two additional parking spaces in back. The site, which contains the former Bishop Shanahan High School, is at West Gay and Everhart streets. The high school building, which most recently housed the Collegium Charter School, will be demolished.

Source: Daily Local; 4/6/09

Chester County fares well on lists measuring wealth

2009-04-09T14:32:00.001-04:00

Chester County has found itself in rather prestigious company, ranking among the top 50 counties across the country in three categories: wages and salaries, dividend income and adjusted gross income.

The report, complied by the Transactional Records Access Clearinghouse at Syracuse University, looked at individual and joint federal tax returns filed in 3,140 counties nationwide in 2007. In Adjusted Gross Income, or AGI, Chester County ranked 21 at $96,578. On the Wages and Salaries list, Chester County ranked 15 at $70,404.

Top employers include Vanguard, QVC and Sungard, which offer top wages. Chester County is home to a number of biotechnology companies as well. On the education front, Chester County has four universities and graduate campus Penn State Great Valley. In addition, the county has an excellent public and private high-school system within its borders.

In Chester County, 42.5 percent of adults 25 and older have a bachelor’s degree or higher compared to 22.4 percent in the rest of the commonwealth, he noted. For the complete list, visit www.trac.syr.edu.

Source: Main Line Suburban Life; 4/8/09

Survey: Households Say Now Good Time to Buy

2009-03-30T20:29:00.001-04:00

Daily Real Estate News March 26, 2009

More than three-quarters (78 percent) of potential first-time home buyers say that now is a good time to buy a home, despite widespread concern about the economy. Out of the 1,000 prospective U.S. first-time home buyers surveyed in early March for the CENTURY 21 First-Time Home Buyer Survey, 68 percent think now is a better time to buy than six months ago.

Prices are the driving motivation for potential first-time home buyers with more than eight of ten first-time home buyers (85 percent) saying they consider current home prices affordable and 73 percent citing that taking advantage of current prices is a major factor in their decision to buy. Interestingly, potential first-time buyers are still split between “being willing to consider an offer now” (42 percent) and “waiting for prices to go down before they seriously consider making a purchase” (48 percent).

“Current pricing, rates and incentives, such as the First Time Homebuyer Tax Credit, provide tremendous opportunities for first-time home buyers to get into the market,” said Tom Kunz, Century 21 Real Estate president and CEO. “Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season.”

Among the survey’s other key findings:
Bargains in the marketplace are providing additional options for buyers to consider. 56 percent of potential first-time home buyers are considering purchasing a foreclosed or short sale home, and 63 percent are open to purchasing either a “fixer-upper” or “as-is” home.

When asked to rate the features that they look for when choosing a home, price is the primary consideration with 87 percent saying this feature is “very important,” followed closely by neighborhood safety (80 percent) and the condition of the home (71 percent).

Having enough money for a down payment is a top concern of potential first-time home buyers as nearly half (46 percent) said they are “very worried” about the issue.

Most respondents (86 percent) are in the market for single family homes.

Source: Century 21

FBI Sting: 24 Caught in Mortgage Loan Fraud

2009-03-30T20:28:00.000-04:00

Daily Real Estate News March 26, 2009

An undercover FBI sting netted 24 people in the Chicagoland area, accusing them of mail and wire fraud that helped straw buyers get $4.2 million in home mortgages.

Among those charged were mortgage brokers, loan officers, loan processors, attorneys, property appraisers, accountants, and a banker. It’s possible that each could be facing prison terms as long as 20 years.

"We want to send a message to people that, if they think they can get $150,000 out of a bank by committing mortgage fraud, and they think that's easy money, our view is they may be walking into a criminal case," said Patrick Fitzgerald, the U.S. Attorney in Chicago who announced the indictments.In nine of the cases, the straw buyers were actually undercover investigators and there was no financial loss. In the tenth case, the loans caused losses in excess of $1.1 million.

"We will not stand by while [some] exploit the financial system for their personal gain," Robert Grant, special agent in charge of the FBI's Chicago office, told a news conference.

Source: The Associated Press, Mike Robinson (03/25/2009)

America's 10 Wealthiest Towns (3/09)

2009-03-30T20:26:00.000-04:00

Daily Real Estate News March 24, 2009

The very wealthy seem to be mostly immune from recent economic downturns. BusinessWeek ranked America’s wealthiest towns based on the 2008 net income and 2008 net worth of their residents. Here's BusinessWeek's list of America’s top 10 wealthiest communities:

Brookville, N.Y.; average income: $328,404; average net worth: $1,670,075
Atherton, Calif.; $380,535; $1,648,161
Rolling Hills, Calif.; $324,190; $1,647,622
Kenilworth, Ill.; $334,634; $1,619,702
Hillsborough, Calif.; $300,943; $1,668,732
Roslyn Estates, N.Y.; $298,935; $1,664,191
Hidden Hills, Calif.; $318,843; $1,630,085
Oyster Bay Cove, N.Y.; 317,661; $1,625,524
(tie) Chevy Chase Village, Md.; $311,170; $1,635,311
(tie) Los Altos Hills, Calif.; $298,510; $1,653,676

Source: Business Week, Prashant Gopal (03/17/2009)

Survey: Chester County residents like what they have

2009-03-30T20:25:00.001-04:00

Life is good — except in traffic. In a nutshell, that is the message Chester County residents gave to researchers surveying their opinions for county commissioners, who plan to use the responses while developing a long-range strategic plan to deliver county services.

The survey found that a significant majority of respondents say the county is a better or as good a place to live as it was five years ago. It remains an excellent place to raise a family and a good place to get an education and buy a home, respondents said.

The respondents liked the county’s open space and its convenient location. They found county workers to be courteous and knowledgeable, and they would be willing to pay higher taxes if it meant children were not abused and criminals were imprisoned. But they did not like the county’s roads, traffic, taxes and cost of living, and they said land-use planning is a concern.

Respondents were concerned about overdevelopment and had little time or inclination for a property reassessment. Key indicators show 75 percent of residents believe Chester County is a good place to live, and more than half (55 percent) say it is an excellent place to raise a family. One in three citizens responded that open space is the best thing about Chester County life.

Source: Main Line Suburban Life; 3/25/09

Districts react to declining land value: Officials warn that as property values fall, tax rates will rise

2009-03-30T20:23:00.001-04:00

The recent decline in real estate value has prompted droves of local land owners to seek reassessments to lower their property taxes. In 2004, the Chester County Board of Assessment Appeals received 824 reassessment requests. That number rose to 1,342 in 2005 and stayed about the same in 2006 and 2007.

In 2008, however, nearly 2,000 requests were filed through the county’s Department of Assessments. In turn, this has strained the budgets of public school districts, which rely on local property taxes for much of their funding. Not all of Chester County's school districts have been equally affected. While finance directors of the West Chester Area and the Downingtown Area school districts said reassessments have caused substantial declines in property tax income, the finance directors of Coatesville Area, Great Valley, and Tredyffrin/Easttown school districts said they've seen little change. Property owners in Chester County can file reassessment appeals from May 1 to Aug. 1. The board of assessment appeals — not local school districts or municipalities — is responsible for reassessing properties.

Source: Daily Local; 3/23/09

How Will Foreclosure Effect Credit Scores?

2009-03-23T01:13:00.000-04:00

Daily Real Estate News March 16, 2009

The amount of damage to a credit score caused by foreclosure, deed in lieu or a short sale during 2008 and 2009 may be mitigated by the slower economic times, say some credit and legal experts.FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the last two years, says Todd J. Zywicki, a professor of law at George Mason University.

''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''

One of the country’s largest credit unions, Golden 1 has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.

BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ''How to Lend to the Newly Credit Impaired.”

Source: The New York Times, Ron Lieber (03/14/2009)

Some See Detroit As Land of Opportunity

2009-03-23T01:06:00.001-04:00

Daily Real Estate News March 18, 2009

Home prices in the Detroit area have cratered, creating opportunities for investors who are snapping up property to renovate and flip or just rent out.

Jeremy Burgess is typical. He started his company Urban Detroit Wholesalers in 2007 with partner Jared Pomranky. They buy houses for a few thousand dollars or less because owners who are leaving the area want to get rid of the tax burden and liability. Burgess and Pomranky look for homes in working-class neighborhoods on the outskirts of the city. They do a little fix-up and painting, and then sell the homes to out-of-state investors for an average of $35,000. Local investors, they say, have a hard time seeing the opportunities, Burgess says.

Burgess claims he averages a 12 percent to 20 percent return on investment. He believes home prices will go back up once financing is easier to get. "This last drop I think is totally due to lack of financing options, and when cash is king, prices drop significantly. I see it as an artificial drop in value, and I am obviously taking advantage of it. So are my investors," Burgess says.

Source: CNN, Tristan Smith (03/17/2009)

Underwater Owners May Keep Walking Away

2009-03-23T01:03:00.002-04:00

Daily Real Estate News March 18, 2009

Housing economists are growing increasingly worried that home owners whose properties are underwater will stop trying to pay their mortgages and just walk away.

In all, the total value of U.S. residential properties fell to $19.1 trillion in December 2008 from $21.5 trillion in December 2007. About 52 percent of Nevada mortgages are underwater, followed by 32 percent in Arizona and 30 percent in both Florida and California, according to researcher First American CoreLogic.

"Should the downward spiral in home prices, neighborhood condition, and equity deterioration continue, more and more mainstream borrowers are likely to walk away from their homes," Credit Suisse said in a December report.

Source: Reuters News, Lisa Baertlein (03/17/2009)

Mortgage-Help Site, Call-in Number Go Live

2009-03-23T00:58:00.001-04:00

Daily Real Estate News March 19, 2009

The U.S. Treasury Department went live on March 19 with its Making Home Affordable program, which aims to help home owners refinance or modify their mortgages. The campaign includes a Web site at makinghomeaffordable.gov as well as a telephone hotline number at (888) 995-4673. The federal government is targeting 9 million home owners whose loans are held by Fannie Mae or Freddie Mac.

Source: Indianapolis Star (03/19/09)

Scammers Target Troubled Borrowers

2009-03-23T00:54:00.001-04:00

Daily Real Estate News March 16, 2009

Scam artists are proliferating, attempting to make money off troubled borrowers interested in taking advantage of President Barack Obama’s foreclosure-prevention plan.

The firms charge fees for what they tell borrowers will be quick and effective negotiations with banks. In most cases, the firms take the home owners’ money – often more than $1,000 – and do nothing.

The Federal Reserve recently issued this advice for people seeking to modify their mortgages:
Work only with HUD-approved nonprofit counselors. (See www.hud.gov)
Don't agree to pay a fee before you are provided with the promised service.
Beware of people offering "guaranteed" results.
Don't sign blank forms or documents you haven't read.

Source: The Wall Street Journal, James R. Hagerty (03/11/2009)

Chinese Drywall Leads to Lawsuits

2009-03-23T00:51:00.001-04:00

Daily Real Estate News March 17, 2009

Several home owners are blaming some drywall imported from China in the wake of Hurricane Katrina and Wilma as giving off a foul odor and causing a range of health problems, according to a lawsuit.

Several class action lawsuits have been filed, including claims against U.S. homebuilder Lennar and a Chinese drywall manufacturer, Knauf Plasterboard Tianjin. Lennar, which has been replacing drywall in some homes, says it didn’t approve the use of the imported drywall. Knauf says it wasn’t necessarily the manufacturer and that the drywall has passed tests that have indicated that it produces no health hazards.The Consumer Product Safety Commission and Florida regulators are investigating. One estimate suggests 60,000 homes may contain the drywall.

Attorneys who have filed the suits claim residents have suffered rashes, new allergies, asthma and sore throats. Victims should be compensated and their health monitored, says attorney Ervin Gonzalez of Colson Hicks Eidson in Washington, D.C.

Source: USA Today, Julie Schmit (03/17/2009)

The REALTORS® Confidence Index: Measuring Expectations

2009-03-23T00:45:00.002-04:00

By Meredith Dunn and Wannasiri Chompoopet
NAR Research

Current economic trends are certainly informing consumers' feelings about the nation's economic well-being, as well as their own. As measured by The Conference Board, consumer confidence has been on a continual downturn since November of 2008. In fact, from February of 2008 to February of 2009, the consumer confidence index is off more than 67 percent!

But REALTORS® confidence in and expectations for the housing market has improved recently. Expectations of real estate practitioners for residential properties for the next six months are more optimistic than they've been in a while. Below we summarize the latest figures from NAR's REALTORS® Confidence Index.

About the REALTORS® Confidence Index
The REALTORS® Confidence Index - RCI - is a key indicator of housing market strength based on a monthly survey of 3,500 real estate practitioners. Actually, the RCI comprises several indexes about different housing market conditions. Practitioners are asked about their expectations for home sales, prices and market conditions. More specifically, the RCI survey is a monthly fax survey that asks practitioners three basic questions pertaining to business in their region:
How would you describe the current housing market in your region?
What are your expectations for the housing market over the next six months in your region?

How do you rate the traffic in your region?
These three questions are asked for major segments of the housing sector including, single-family homes, townhomes/duplexes, and condominiums. These same questions are asked each month. Answers are then quantified and used to create the confidence index.

The RCI Indexes are calculated as follows: Respondents indicate whether conditions are, or are expected to be "strong" (100 points), "moderate" (50 points), and "weak" (0 points). The results are the average score for each question. A score of 50 is the threshold between a "strong" and a "weak" condition.

The RCI for January
The REALTORS® Confidence Index for single-family home sales rose for the first time in eight months from 18.8 in December of 2008 to 23.2 in January. The index for townhouses showed a similar trend, and rose to 13.1 from 11.4. The condo index also increased in January, from 9.6 in December to 11.2 in January. It should be noted, however, that the indexes for all three types of housing, are still well below last year's levels.

Confidence was highest in the Northeast and lowest in the Midwest. Existing Home Sales data for January show that prices fell the most in the Northeast, at 14.7 percent. Perhaps the rising confidencefactor in the Northeast is related to buyers beginning to take advantage of the lower prices.

Expectations of real estate practitioners for residential properties for the next six months are optimistic, and increased for all three types of housing. The single-family homes sales expectation index climbed to 34.0 from 28.3 in December. The townhouse and condo figures were 20.2 and 17.8, respectively.

The index measuring the prospective traffic of home buyers was at 31.7 in January - an improvement from December's reading of 25.1 and also an improvement over the reading of 30.7 in January of 2008. The seller's traffic index for January was 45.1 which is virtually flat compared to a month ago.

Other Survey Questions
In addition to the standard questions, each month the RCI survey features questions about a timely aspect of the housing market. In January, survey participants were asked about their most recent home buyer client experience. More than a third of survey respondents indicated that their most recent buyer client was a first-time purchaser. A third reported that their buyer purchased a foreclosed home, and just under a third of practitioners indicated that their most recent buyer client used an FHA loan for the home purchase.

Some concerns
While REALTORS® confidence is higher than last month and their expectations for their markets are in general more optimistic, they are not as confident about any upswing in home prices. The majority of survey participants - 61 percent - felt that home prices will fall over the next year. Only 39 percent thought that home prices would rise over the same period. Their view matches that of the NAR forecast which projects median prices for existing homes will decline in 2009.

Gas company pursues eminent domain for pipeline

2009-03-20T15:50:00.001-04:00

Williams Transco, the natural gas giant who has a project to replace a seven-mile section of their pipeline in the county, has started condemnation proceedings against 36 property owners who have not accepted offers made for their land. The company will be filing a joint motion expressing its need for immediate access. The action was criticized by legislators who have sought to help residents whose property is being severely affected by the natural gas company's desire for additional right-of-way for the project. The county is crisscrossed with existing pipelines by eight different companies that bring natural gas, liquid gas or other petroleum products through 62 of Chester County's 73 municipalities. Currently, at least three natural gas companies have new pipeline or pipeline expansion projects going on in the county.

Source: Daily Local; 3/11/09

New-home construction logs unexpected gain

2009-03-19T20:44:00.002-04:00

By JEANNINE AVERSA
Ap Economics Writer
Tue Mar 17

WASHINGTON – The number of new housing projects that builders broke ground on in February rose sharply, defying economists' forecasts for yet another drop in activity.

The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.

February's pickup was led by a big increase in apartment construction.
By region, all parts of the country reported an increase in overall housing construction, except for the West, which led the housing boom and has been hard hit by the bust.

Some economists said the new housing figures offered a glimmer of hope.
"While it may be premature to call an absolute bottom in residential construction, we are clearly getting close," said Adam York, economist at Wachovia.

Overall housing construction activity fell to a pace of 477,000 units in January, according to revised figures. That was a little higher than first reported but still marked a record low.

Applications for building permits, considered a reliable sign of future activity, also rose in February by 3 percent to an annual rate of 547,000. Economists were expecting permits to fall to a pace of 500,000 units.

Even with February's rare burst of activity, housing construction is down a whopping 47.3 percent from a year ago.

"This is a temporary rebound, not a recovery," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

The collapse of the once high-flying housing market has been devastating to the United States' economic health.

Its spreading fallout has contributed to big pullbacks by consumers and businesses alike, plunging the economy into a recession now in its second year.
The Obama administration has announced a $75 billion program to stem skyrocketing home foreclosures, which have dumped even more properties on an already crippled market.

More than 2 million American homeowners faced foreclosure proceedings last year, and that number could soar as high as 10 million in the coming years depending on the severity of the recession, according to a report last month by Credit Suisse.

Home mortgages are harder to come by because of the credit crisis and unemployment is at a quarter-century peak of 8.1 percent, factors that will make it difficult for the depressed housing market to snap back to full health.
Builders aren't optimistic that will happen any time soon.

The National Association of Home Builders' housing market index was flat in March at a reading of nine. That was one point above the all-time low reached in January. Readings lower than 50 indicate negative sentiment about the market. The index has been below 10 since November, reflecting the toughest market conditions in a generation.

Tighter lending standards for home mortgages, rising defaults and fear about the housing market's future have sidelined buyers, an absence felt acutely by homebuilders such as D.R. Horton Inc., Pulte Homes Inc. and Centex Corp.

Will the Housing Rescue Plan Work?

2009-02-21T12:39:00.000-05:00

Daily Real Estate News February 20, 2009

Some big guns in the world of economics have doubts.

The plan seeks to stem foreclsoures by helping home owners who are still current on their mortgage but at risk of defaulting. (For more details: Read What's in the Foreclosure Plan)

"It's a positive step in the right direction," says economist Mark Zandi of Moody's Economy.com. "I think it will be much more successful than those that preceded it. I worry that it's not going to be successful fast enough."

Likewise, Dean Baker, a housing specialist with the Center for Economic and Policy Research, said: "I'm not impressed. There are some good things in there. I think giving servicers incentives is a good thing. But it's mostly money for banks, not money for home owners. … The banks still decide who gets into this, and that's been a problem all along."

Patrick Newport, an economist with IHS-Global Insight, is also skeptical. He pointed out that the number of people who are underwater on their mortgages has risen to 15 million, but the Obama initiative aims to help only 7 million to 9 million, "Obama's plan is an ambitious one, more ambitious than analysts had been led to expect," he says. "Whether it will stop the bloodletting, however, time will tell.”

Source: Los Angeles Times, Maura Reynolds (02/19/2009)

Fannie and Freddie Plan Big Fee Increases

2009-02-21T12:35:00.003-05:00

Daily Real Estate News February 18, 2009

Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1. In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.

Under the new guidelines, buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty, no matter how high their credit score. Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on.

Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.

Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees "default at four to eight times" the rate of other mortgages backed by Freddie. "We have to manage these risks appropriately," he says.

Source: Washington Writers Group, Kenneth R. Harney (02/15/2009)

Fannie and Freddie Plan Big Fee Increases

2009-02-21T12:35:00.000-05:00

Daily Real Estate News February 18, 2009

Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1. In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.

Under the new guidelines, buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty, no matter how high their credit score. Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on.Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.

Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees "default at four to eight times" the rate of other mortgages backed by Freddie. "We have to manage these risks appropriately," he says.

Source: Washington Writers Group, Kenneth R. Harney (02/15/2009)

5 Tips for Homebuyers Seeking a Mortgage

2009-02-21T12:33:00.001-05:00

Daily Real Estate News February 19, 2009

Here’s a warning for potential borrowers: Nervous lenders have tough new rules and are paperwork crazy.

"Borrowers are going to have to prove they are the borrower they say they are," says Keith Gumbinger, vice president of HSH Associates, a mortgage-industry publisher in Pompton Plains, N.J.Gumbinger says homebuyers should consider these things before they apply for a loan.

1. Down payments are critical. Borrowers should expect to put down at least 10 percent for a “conforming loan” – a mortgage that Fannie Mae and Freddie Mac will purchase.

2. Credit scores count. A 720 on the 850-point FICO rating scale will get a borrower access to the best rates. Rich Bira, branch manager of FCM Direct Lender in Chicago, says: "A score between 720 and 739 gets 0.125 percent added to the rate, a score between 700 and 719 gets 0.375 percent added to the rate, and a score between 680 and 699 gets 0.5 percent added to the rate.”

3. Consider VA and FHA. Borrowers without down payments or with less than stellar credit scores should consider these government-insured loans offered through the Federal Housing Administration of the Veterans Administration.

4. Unearth the records. Before applying, borrowers should organize tax, banking and other records that prove income, savings and debts. They should also expect to be patient about what may seem to be endless requests for information.

5. Get rid of debts. Limiting debts, including what borrowers expect to pay for the mortgage, to less than 43 percent of gross income is important.

Source: Chicago Tribune, Mary Umberger (02/15/09)

30-Year Rates Drop to Near 5%

2009-02-21T12:31:00.001-05:00

Daily Real Estate News February 20, 2009

Mortgage rates across the board fell this week, a welcoming sign to potential buyers and home owners looking to refinance.

The 30-year fixed-rate mortgage averaged 5.04 percent this week, a drop from last week's 5.16 percent. Last year at this time, the 30-year rate averaged 6.04 percent, Freddie Mac reports.

Freddie Mac reported the following for other rates for the week:

15-year mortgage rates: averaged 4.68 percent, down from last week's 4.81 percent. Last year at this time: 5.64 percent.

5-year hybrid adjustable-rate mortgages: averaged 5.04 percent this week, a drop from last week's 5.23 percent. Last year at this time: 5.37 percent

1-year ARMs: averaged 4.8 percent, down from last week's 4.94 percent. Last year at this time: 4.98 percent

"Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation," says Frank Nothaft, Freddie Mac's chief economist.

Source: Freddie Mac (02/19/09)

What's In the Foreclosure Prevention Plan

2009-02-21T12:30:00.001-05:00

Daily Real Estate News February 19, 2009

The Obama administration yesterday released its long-awaited plan to stem foreclosures.

It's organized into three categories:
1.) Help for home owners making their payments but at risk of default and foreclosure. Home owners with a Fannie Mae or Freddie Mac loan would be eligible to refinance as long as their mortgage doesn't exceed 105 percent of the home's current market value. Currently owners need to have at least 20 percent equity. Potential impact: 4-5 million households.

2.) Help for home owners already in default and in need of loan modification. For lenders that voluntarily agree to lower a borrower's payment so that it makes up no more than 38 percent of the borrower's income, the government would share the cost of lowering the mortgage burden to 31 percent of income. Incentives to lenders to participate include a $1,000 payment. Borrowers can receive up to $1,000 as an incentive to stay current on their new mortgage. Still in the works is a proposed provision that would allow bankruptcy judges to require loan modification (known as a cramdown) as part of a household's restructuring. That provision requires legislation by Congress. Estimated potential impact: 3-4 million households.

3.) Doubled resources to Fannie Mae and Freddie Mac. To encourage investors to buy the secondary market companies' mortgage-backed securities, the government explicitly backstops them to up to $400 billion, twice the current amount.

The plan does not provide help to investors or to home owners who are in trouble with a second home, nor does it apply to homeowners whose mortgage is part of a private-label mortgage security that is not backed by Fannie Mae or Freddie Mac.

"The administration's proposed plan, combined with provisions like the $8,000 first-time home buyer tax credit in the just-enacted American Recovery and Reinvestment Act, will help minimize foreclosures, shrink housing inventory, stabilize home values, and move the country closer to an economic recovery," says NAR President Charles McMillan.

Source: REALTOR® Magazine Online

Real Estate Market Trends in West Chester

2009-02-17T20:17:00.000-05:00

According to the latest Zillow Real Estate Market Reports, home values in West Chester decreased -0.4% in the fourth quarter of 2008, compared to the fourth quarter of 2007.

Nationally, home values decreased -11.6% during this same period.

NAR's Take on the Stimulus Package

2009-02-15T11:12:00.001-05:00

Dear Fellow REALTOR®,

Here's our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulis package AND the Treasury's package holistically, in compliment with each other - mostly because that's how the Obama team is looking at it.

Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have).

Here they are:
1) get loan limits raised for high cost areas,
2) make the $7,500 tax credit NOT a loan,
3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and
4) help provide solutions to the foreclosure/short sale problem.

So here's what we have achieved:
1) the loan limits will be raised to $727,000 in high cost areas,
2) the tax credit will be raised to $8,000 with NO payback [a true credit],
3) interest rates have come down 125-150 basis points, and
4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES's thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have — which some tend to forget is always on the table when these negotiations start up again — mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects). We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of 'what we are willing to give up to get a $15,000 tax credit' and kept the debate again, on how much it should be. It's pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help 'unclog the pipeline' and get capital flowing into housing again.

Sincerely,
Charles McMillan, CIPS, GRI
2009 NAR President

Stimulus Advances With Tax Credit Changes

2009-02-13T14:09:00.002-05:00

Daily Real Estate News February 12, 2009

The $790 billion stimulus package hammered out by House and Senate conferees late yesterday increases the home buyer tax credit to $8,000, from $7,500, and drops the repayment feature for buyers who hold on to their property for at least three years. The NATIONAL ASSOCIATION OF REALTORS® has sought removal of the repayment requirement because it discourages buyers from taking advantage of the tax credit. The three-year minimum holding period is a safeguard against speculators' use of the credit. The legislation also extends the effective date of the credit to December 1 from June 30, and extends eligibility to borrowers who buy their home with the help of state or local financial assistance that comes from the proceeds of tax-exempt mortgage revenue bonds. The credit remains open only to first-time buyers (those who haven't owned in at least three years) and some income eligibility restrictions apply, but those are unchanged from the existing program.

Other provisions reportedly in the bill that could help housing markets and communities include:
FHA and conforming loan limits. Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the secretary of the U.S. Department of Housing and Urban Development.

Foreclosure mitigation and neighborhood stabilization. Funding for states and localities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized. Some news reports put the funding level at $2 billion.

Rental assistance. Up to $1.5 billion to provide short-term rental assistance and other aid for families during the economic crisis.

Transportation infrastructure. Up to $29 billion for highway construction projects, $8 billion for rail projects, and $5 billion to weatherize low-income homes.
Rural housing development. Increased funding for the Rural Housing Service direct and guaranteed loan programs.

Low-income housing grants. Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations

Tax-exempt housing bonds. Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds

Energy efficient housing. Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.

Source: NAR, AP, Washington Post, New York Times, Bloomberg, and Wall Street Journal.

Mortgage Rates Rise, Despite Fed's Efforts

2009-02-06T16:35:00.000-05:00

Daily Real Estate News February 6, 2009

Despite the Federal Reserve's campaign to lower mortgage rates, Freddie Mac reports a jump in the 30-year fixed rate to 5.25 percent in the week ended Feb. 5 from 5.10 percent the prior week. Experts say home-loan interest is on the rise because long-term Treasury bond yields have climbed and because mortgage lenders are upping rates to ease the flood of refinancing applications.

Source: The Los Angeles Times, Tom Petruno (02/06/09)

Senate OKs $15,000 Bonus for Home Buyers

2009-02-06T16:34:00.002-05:00

Daily Real Estate News February 5, 2009

Housing could get a big boost from the latest addition to the mammoth stimulus bill working its way through Congress.

Senate legislators unanimously approved a proposal Wednesday that would allow a tax credit for home buyers of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers. "It is time to fix housing first," said Sen. Johnny Isakson, R-G.Isakson's office said the proposal would cost the government an estimated $19 billion. In all, the stimulus is now topping an estimated $920 billion.

In an op-ed that appears in Thursday’s Washington Post, President Barack Obama painted "a dire picture" if Congress "fails to move quickly to pass the stimulus bill."

"This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the op-ed titled, The Action Americans Need.

Source: The Associated Press, David Espo (02/05/09)

Fannie Loosens Refinancing Rules

2009-02-06T16:32:00.001-05:00

Daily Real Estate News February 6, 2009

Fannie Mae plans to eliminate some credit-score requirements, scale back income-documentation standards, and waive the need for appraisals in some cases, starting on April 4.The mortgage finance company believes the changes will allow more home owners to refinance into new home loans at near-record low interest rates. Analysts say the relaxed rules for loans that Fannie Mae owns or guarantees are unlikely to have a significant impact on mortgage-bond investors and mortgage insurers.

Source: The Washington Post, Jody Shenn (02/06/09)

Um, excuse me, but isn't this part of how we got here?

Economist: $825B plan may avert 'depression'

2009-01-28T20:17:00.003-05:00

Up to 10 million homes at risk of foreclosure through 2012, say analysts
by Matt CarterInman News
Wednesday, January 28, 2009

The House of Representatives is expected to vote today on an $825 billion stimulus bill that could save millions of jobs and prevent foreclosures, but which might also make the recession worse if the government's growing debt sends interest rates up and the dollar plummeting.

President Obama urged fast passage of the bill, saying new statistics being released every day "underscore the urgency of the economic situation."

"The American people expect ... us to put together a recovery package that puts people back to work (and) creates investments that assure our long-term energy independence, an effective health care system (and) an education system that works," Obama said.

House Republican Leader Rep. John Boehner called the stimulus plan "wasteful and unfocused" and said it would be "irresponsible to pass this massive debt onto our children and grandchildren." Boehner and other Republicans are pushing for an approach that puts more emphasis on tax relief and less on government spending to stimulate the economy.

H.R. 1, the American Recovery and Reinvestment Act of 2009, would earmark money for a range of federal programs and increase or extend benefits payable under Medicaid, unemployment and food-stamp programs. The bill also includes an estimated $165 billion in tax cuts for individuals and $110 billion for businesses.

In an analysis, the nonpartisan Congressional Budget Office estimated that the combination of increased spending and reduced tax revenue would create an additional $816 billion in deficit spending through 2019.

But CBO Director Douglas Eledorf told members of the House Budget Committee Tuesday that the bill would provide a "substantial boost to economic activity," leaving as many as 3.6 million more people employed at the end of 2010 than if the government took no action.
Grim jobs outlook

The U.S. lost 2.5 million jobs in 2008 — including 1.9 million in the last four months of the year alone, Eledorf testified — sending the unemployment rate to 7.2 percent. Without more government measures to create jobs and stimulate spending, unemployment could surge to 9.2 percent by early next year, up from the recent low of 4.4 percent at the end of 2006, CBO projects.

Moody's Economy.com chief economist Mark Zandi was even more pessimistic, telling lawmakers that without a stimulus bill the U.S. is looking at a loss of 8 million jobs by late 2010 and 11 percent unemployment by early 2011.

The stimulus plan now being considered in the House "will not keep the downturn from becoming the worst since the Great Depression, but it will ensure that it remains a recession and not a depression," Zandi said.

Even with a stimulus plan in place, Moody's Economy.com projects 5.5 million jobs will be lost and that unemployment will peak at nearly 9.5 percent in the summer of 2010, Zandi said.
Analysts at Credit Suisse estimate that for every 10 people added to the unemployment rolls, there are four potential foreclosures. That's a "back of the envelope" approach that assumes homeowners lose jobs in the same proportion as renters, and that about 60 percent of homeowners who are laid off may lose their homes.

If unemployment peaks at 8 percent at the end of this year, Credit Suisse projects a potential for 9 million homes to enter the foreclosure process from 2009 through 2012. If unemployment continues to rise into 2010 and reaches 10 percent by year end, Credit Suisse sees another 1.2 million foreclosures, or 10.2 million homes in jeopardy.

Many of those homes might be saved from foreclosure through loan modifications by lenders. If 50 percent of mortgages headed for foreclosure are modified and the re-default rate on those loans is 40 percent, only 6.3 million of the 9 million foreclosures envisioned in the more optimistic scenario would be completed, Credit Suisse estimated.

The Obama administration is already committed to putting $50 billion to $100 billion of the second half of the $700 billion Troubled Asset Relief Program, or TARP, into foreclosure prevention programs (see story).

CBO forecasts that national home prices will fall another 14 percent between third-quarter 2008 and the middle of 2010, leaving more homeowners unable to refinance their mortgages because their homes are worth less than they owe. Rising unemployment and the resulting loss of income will also contribute to high foreclosure rates, Eledorf said.

Hefty price tag
According to the CBO's analysis, the bill would provide $43.1 billion for highway construction and other transportation programs; $11.1 billion for housing assistance programs administered by the Department of Housing and Urban Affairs, and $5.2 billion in community development grants to states and cities. The bill also earmarks $48.9 billion for renewable energy and water resource programs; $14.2 billion for science, technology and criminal justice programs; and $4.5 billion for the Department of Defense to repair and renovate facilities.

Former CBO director Alice Rivlin, now a senior fellow at the Brookings Institution, warned lawmakers that they need to offset spending increases that add to the budget deficit by making offsetting spending cuts or by creating new "revenue streams" — raising taxes.
Not since the U.S. was in its infancy "have we been so dependent on foreign creditors," Rivlin said. For now, global investors are flocking to the safety of U.S. Treasurys, allowing the government to borrow at "astonishingly low rates," she said.

A failure to tackle future budget deficits could rattle the confidence of creditors and lead to "much higher interest rates" on public and private debt, Rivlin warned. A rapid increase in interest rates and a weakened dollar could deepen the recession and slow recovery, she said.
Rivlin was one of a dozen budget analysts who signed a memo to President Obama urging his administration to follow through on a campaign promise to "scrub every line item in the current budget with an eye to finding items that are either ineffective or outdated."

Zandi acknowledged that the stimulus plan and other bailout measures could more than triple the annual federal budget, from $450 billion in fiscal 2008 to $1.5 trillion this year and next. The federal debt load could rise from about 40 percent of gross domestic product to 60 percent, he said.

But Zandi said the borrowing the government would have to undertake to fund the $825 billion stimulus package shouldn't lead to excessively higher long-term interest rates, because private bond issues are expected to remain low. Even factoring in the Treasury's issuance to fund the growing debt, total credit market needs should remain "modest," Zandi forecasts, with yields on 10-year Treasurys staying below 4 percent through 2010.

Given the intensity of the downturn and the disarray of the financial system, Zandi called the budget deficit and other unintended consequences of the stimulus package "problems for another day."

The Moody's Economy.com economist urged lawmakers to consider additional tax relief measures — including expanding the current $7,500 tax credit for first-time homebuyers — that would bring the cost of the stimulus bill to $1 trillion.

H.R. 1 would grant requests from real estate, mortgage lending and home-building industry groups to remove the current repayment requirement on the first-time homebuyer credit, which is scheduled to expire on June 30 (see story). Zandi said lawmakers could go further, increasing the homebuyer credit and expanding it to all buyers of owner-occupied homes through the end of the year.

Zandi also suggested adding a payroll tax holiday in the third quarter, which he said would boost spending by lower- and middle-income households and help cash-strapped small businesses stem layoffs.

Financing the Home Purchase

2009-01-23T16:08:00.002-05:00

by Paul Bishop, Harika "Anna" Barlett and Danielle Hale, NAR Research

The 2008 National Association of REALTORS Profile of Home Buyers and Sellers was released in November.* The Association surveys home buyers and sellers annually to gather detailed information about the home buying and selling process. These surveys provide information on demographics, housing characteristics, the experience of consumers in the housing market, and the role that real estate professionals play in home sales transactions. In the November and December issues of Real Estate INSIGHTS, we looked at highlights from the profiles about home buyers and sellers. This month, we focus on home financing.

Financing the purchase of a home can be a significant challenge for some buyers. The recent turmoil in financial markets has definitely had an impact on the availability of mortgage credit for those consumers wanting to purchase a home.

But eventually credit will flow again. Recent trends in home financing can help real estate professionals be ready. Below we summarize information about financing the home purchase from July 2007 to June 2008 from the most recent NAR Profile of Home Buyers and Sellers.

Tighter underwriting standards have made financing the home purchase more challenging than it has been in previous year. In fact, compared to the previous survey in 2007, a smaller share of both first-time and repeat buyers report that they financed the entire purchase price of their home with a mortgage. Moreover, a significant percentage of buyers reported that they made some type of financial sacrifice in order to qualify for a mortgage and complete the sales transaction.

Financing the Home Purchase
Ninety-three percent of home buyers reported that they financed their home purchase with a mortgage. Among younger buyers, the percentage was 98 percent, decreasing somewhat for buyers between 45 and 64 years old. A significantly smaller share — two thirds — of buyers 65 and older financed their home with a mortgage, reflecting a significant share who used equity built up over a number of years allowing them to forgo use of a mortgage. Unmarried couple households rely on mortgages more often than other types of households. Single person repeatbuyer households were least likely to finance their home purchase with a mortgage.

Percent of Home Purchase that was Financed
One of the most significant changes in the characteristics of mortgage financing has been the sharp drop in the percentage of buyers who financed the entire purchase of their home. This no doubt reflects the tighter underwriting standards that many lenders implemented during the past year. In 2007, 29 percent of buyers reported that they financed their entire purchase with a mortgage compared with 23 percent in 2008. Among first-time buyers the share with 100 percent financing fell from 45 percent to 34 percent.

Downpayments
The median downpayment by first-time buyers was 4 percent, up from 2 percent in 2007; the number purchasing with no money down fell from 45 percent in 2007 to 34 percent in the current survey. Again, this likely reflects tightened lending standards. Indeed, by the close of the survey period (June 2008), no-downpayment loans all but disappeared.

Savings remains the major source of downpayment funds for the purchase of a home. As the share of buyers financing with no downpayment decreased, the share of buyers who relied on savings rose from 52 percent in 2007 to 56 percent in 2008. Half (51 percent) of repeat buyers used the proceeds from the sale of their previous home, down from 60 percent in 2007. Twenty-six percent of first-time buyers used a gift from a friend or relative, up from 22 percent in 2007.

Sources of downpayment vary across households of different types as well, although savings is the dominant source of downpayment for all types of households. Compared with other types of households, a greater share of unmarried couples and single male households relied on savings. Married couples depended on the proceeds of the sale of a previous home more often than other buyers.

Giving Up to Get
For some households, the purchase of a home and qualification for a mortgage requires some type of financial sacrifice. Buyers most often reported that they cut spending on luxury items(29 percent), entertainment (28 percent) or clothes (21 percent) in order to keep their debt lower to qualify for a loan. By a wide margin, first-time buyers more often reported cutting spending in these areas compared with repeat buyers. Still, 63 percent of repeat buyers and 41 percent of first-time buyers noted that they did not need to make any sacrifices.

Across different types of households, single female and unmarried couple buyers more often reported making some type of sacrifice in order to qualify to purchase a home. Nearly one-third of single female buyers cut spending on luxury items and entertainment; 29 percent of single female buyers also reported cutting spending on clothes. Among unmarried couple buyers, four in ten cut spending on luxury items or entertainment, and three in ten reduced expenditures on clothing.

Mortgage Challenges
Among recent home buyers, 7 percent noted that the mortgage application and approval process was much more difficult than anticipated with an additional 20 percent noting that it was somewhat more difficult than in recent years. It should be noted, however, that these views belong to those home buyers who successfully completed a home purchase transaction and consequently do not include an assessment of the difficulty of the process by potential buyers who were unable or unwilling to complete the purchase of a home.

One in ten unmarried couples who purchased a home described the mortgage process as much more difficult than anticipated. Although there was some variation across other types ofhouseholds, most did not consider the process difficult.

Of course, some households who wanted to obtain a mortgage in order to purchase a home faced additional hurdles. Among home buyers who successfully financed the purchase of their home, 5 percent reported that their mortgage application was rejected by one lender, with an additional 3 percent experiencing a rejection by two or more lenders.

Types of Mortgage Loans
Nine of ten home buyers reported that they secured a fixed-rate mortgage to finance their home purchase. That is an increase from the 81 percent who financed their home via a fixed-rate mortgage in 2007. Just 4 percent of buyers indicated that the interest rate on their mortgage was fixed for an initial period before adjusting, down from 10 percent in 2007.

Buying a Home: a Good Investment?
The majority of home buyers still believe that their home purchase will be a good investment. Eighty-seven percent of home buyers considered their purchase a good financial investment. Nearly half (47 percent) of buyers believe that their home is a better investment than stocks,with an additional 31 percent viewing it as equivalent to stocks. There is little difference in the perception of first-time or repeat buyers.

There was, however, disagreement agreement about the investment value of their home purchase, depending on the type of home buyer household. Single male buyers were somewhat less likely to consider their purchase a better investment than stocks while single female buyers and unmarried couples were the most optimistic.

Looking Ahead
The current economic recession, job losses, and more restricted access to mortgage capital will no doubt have an impact on home buying activity in early 2009. But with mortgage rates around 5 percent and an unprecedented inventory of homes - both new and existing - there are many opportunities for homeownership for buyers with solid credit. Government programs, including the home buyer tax credit, higher FHA loan limits, and the eventual flow of mortgage capital from banks and lenders (as a result of the Troubled Asset Relief Program) will also help home buyers and homeowners. A new economic stimulus package - if it includes significant housing-stimulus provisions — should also help enable consumers to become homeowners and purchase a piece of the American Dream.

*NAR mailed an eight-page questionnaire in August 2008 to a national sample of 133,000 home buyers and sellers who purchased their homes between July 2007 and June 2008, according to county records. It generated 10,053 usable responses; the adjusted response rate was 7.9 percent. All information is characteristic of the 12-month period ending in June 2008 with the exception of income data, which are for 2007. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent.

Local ‘Journal Register’ newspapers out of business

2009-01-23T15:57:00.001-05:00

The PA8 weekly newspaper group owned by the Journal Register Co. is now the PA3 with the folding of 5 local weekly papers. Four Chester County papers, including the Oxford Tribune, Coatesville Ledger, Parkesburg Press and Downingtown Ledger, ceased publication last week. The closings also end the combined Classified Section that ran in all the PA8 weeklies.

It is expected that the weekly closings are just a beginning for the Journal Registry Company and more closings and consolidations are right over the horizon.

Source: Chester County Press; 1/14/09

I'm Baaa'aaack

2009-01-23T15:30:00.004-05:00

It's been a while since I actually penned something original here. Not sure why that is since I love to hear myself talk....

Since last I "spoke" here, the world has undergone some massive change. We have a new President, a ton of turmoil in the credit markets, old standbys GM, Ford and Chrysler are begging for mercy, and well, the Eagles have blown another shot at the Super Bowl. Some things in life ARE consistent alas!

What is inconsistent is the real estate market. The market took a dramatic plunge of inactivity when the credit debacle hit the proverbial fan after Labor Day and never recovered as we went through those dastardly holidays we end the year with. Only when Prez-elect Obama started to speak up and credit rates dropped after Christmas did the sideline-dwelling buyers start to peak back out their doors. Lately first-time buyers seem to be basking in the sunlight of our 15 degree days and business is brisk (relatively speaking of course). Many many showings of late and our office is posting encouraging results lately in contracts completed.

This is the spring market afterall, and with rates extremely low and a nice selection if not overabundance of inventory, buyers really should be more motivated than they seem to buy. It is, afterall a buyers market. But buyers seem to think they can time a market and I believe, with the encouragement of well-meaning Realtors, seem to be sitting back waiting to spy that bottom price for their next dream home. the reality is that many of these reluctant buyers will not pull the trigger until the next upswing is months old and they will in fact pay considerably more for their next home than they probably would now. But that's the American way!

The market is particularly peculiar (say THAT real fast a few times!) for investors. Urban areas such as Philly and Wilmington are teeming with finished rehabs that aren't selling and so are being rented. In Philly, typical rentals are now competing with granite countertop-adorned flips that are being rented, essentially at rates the regular rentals were getting 18 months ago. As I wrote last spring, investors seem to still be unloading, or trying to unload, portfolios, why, I'm not sure, maybe because they aren't finding renters, or the rentals aren't cashflowing like they did two years ago.

Alas, what goes up will come down, and what goes down, will usually find its way back up.

Let's hope so. To all those economics experts, especially the self-proclaimed ones, like Suze Orman, all I can say is this: SHUT THE HELL UP! Enough with all the negative BS. Keep saying it (I can't even say it) will happen, and it WILL sell-fulfill your prediction! So, SHUT UP! As someone's mom used to say, if you have nothing good to say, keep quiet......

New Refinance Boomlet May Lift Economy a Bit

2009-01-23T14:53:00.000-05:00

Daily Real Estate News January 23, 2009

Record low mortgage rates are providing a small measure of stimulus to the troubled U.S. economy as borrowers scramble to refinance their home loans — a move that frees up cash to spend on other items. The Mortgage Bankers Association reports that the volume of loan applications has soared since November to its highest level in six years. However, despite mortgage rates hovering around and even under 5 percent in recent weeks, some homeowners who want to refinance are finding they cannot because of lenders' tightened credit standards.

Source: Christian Science Monitor, Mark Trumbull (01/23/09)

Growth Area: Welcome to the Renter's Market

2009-01-23T14:51:00.000-05:00

Daily Real Estate News January 22, 2009

Landlords and property managers are pointing out that they have never faced so many tenants seeking rent reductions, and fear of losing tenants is persuading them to negotiate."

In the apartment business before the downturn, it wasn't a 'Let's make a deal' climate," says Jessica Scully, president of Scully Co., a property management company with units in four states, “Now, it's something we are seeing more of."

Scully is particularly nervous about filling units that used to go to new graduates who are now likely to stay home with mom and dad.

Jared Wilk, an associate at Wilk & Welch Associates, a property management firm in the Boston area, even found himself working to keep a tenant whose rent check bounced. He was willing to lower her rent knowing he wouldn't be able to rent the apartment for more than the discounted amount. Trading a rent reduction for a lease extension is one way for both parties to get what they want, says Mitchell Rattner, president of Home Equity Savers in suburban Chicago.

Source: The Wall Street Journal, Dana Mattioli (01/21/2009)

Real Estate Outlook: Change Anticipated

2009-01-21T19:33:00.000-05:00

by Kenneth R. Harney

The national economic headlines continue to be bearish, but some of the underlying fundamentals for real estate are pointing to better days ahead.

Take home mortgage rates: Last week thirty year fixed rates dropped below the seemingly-unbreakable five percent barrier for the first time on record, according to the Mortgage Bankers Association.

New thirty year loans went for an average 4.89 percent, while fifteen year loans were just above 4.6 percent.

Equally important, the outlines of the Obama administration's and Congress's plans to turn around the housing markets just became clearer. Tops on their list: Ending the foreclosure epidemics in some parts of the country through ambitious new programs designed to rework the terms of hundreds of thousands of mortgages that are now unaffordable.

In a letter to Congress last week, Lawrence Summers, Obama's nominee to head the National Economic Council, said the incoming administration plans to use portions of the remaining $350 billion in "TARP" — or "Troubled Asset Relief Program" — money to rework monthly payments for what Summers called "responsible home owners" now facing economic challenges in the recession.
Though Summers did not go into detail, the program is likely to be based on FDIC chairman Sheila Bair's proposed "mass-modification" concept that the Bush administration rejected last Fall.

Versions of that program might include widespread principal write-downs — outright reductions in home owners' mortgage balances — and guarantees to lenders in the event borrowers re-default.

The Obama administration is also likely to institute an immediate ban on all foreclosure actions, possibly for three months, and is certain to enact bankruptcy reform legislation allowing judges to modify mortgage terms to forestall foreclosures.

Why's this important for anyone involved in real estate? The key to stabilizing local markets, say most economists, is reducing the numbers of new foreclosures and other distressed-price transactions.

Foreclosures lower property values in surrounding neighborhoods, wherever they occur. That discourages potential buyers — who don't want to plunge in as long as prices are still declining.

If the new administration and Congress can successfully reduce the numbers of new foreclosures, there's an excellent chance that the current combination of low prices and record low mortgage rates can have the effect they should be having: Spurring new sales.

Add in still another factor: Congress may create a new and improved tax credit — one that's not repayable and covers all home purchases, not simply first-time buyers — and we just might be looking at a FAR more positive outlook than a lot of people could imagine.

Published: January 20, 2009

30-Year Rates Fall Below 5 Percent

2009-01-16T12:12:00.001-05:00

Daily Real Estate News January 16, 2009

Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac. Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.

The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.

"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.

Other rates were mixed for the week:
15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.

1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.

5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week. Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.

Freddie Mac started recording mortgages in 1971.

Source: Reuters, Julie Haviv (1/15/09)

10 Cities Boasting Mini Sales Booms

2009-01-16T12:09:00.001-05:00

Daily Real Estate News January 16, 2009

Some cities that were hardest hit by the real downturn are experiencing mini sales booms.Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country."There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "

And there are now bidding wars taking place over homes in foreclosure.

"Phoenix and San Diego are reporting similar experiences. "We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives.

"By the end of 2010 – that's where we're calling the bottom in the forward market. You're going to get a small price appreciation in 2011," says Patten. "It's not like the turn is 10 percent per year, it'll be something like 3 percent or 4 percent."

Here are the cities where experts say it makes the most sense to buy now:
Las Vegas
Sacramento, Calif.
San Diego, Calif.
Los Angeles
Detroit
Phoenix
San Francisco
Washington, D.C.
San Jose

AtlantaSource: Forbes, Matt Woolsey (01/12/09)

Mortgage Rates Continue Falling to Record Lows

2009-01-11T18:27:00.000-05:00

Daily Real Estate News January 9, 2009

For the fourth consecutive week, mortgage rates have fallen to all-time lows. The 30-year mortgage rates averaged 5.01 percent this week, which is a drop from last week's 5.1 percent. Last year at this time, rates averaged 5.87 percent.

"Interest rates for 30-year fixed-rate mortgages fell for the 10th week ... due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," says Freddie Mac Chief Economist Frank Nothaft.

Other rates also dropped for the week:
15-year fixed rates: dropped to 4.62 percent from 4.83 percent last week. Last year at this time 15-year mortgage rates averaged 5.43 percent.
5-year hybrid adjustable-rate mortgages averaged 5.49 percent, a drop from 5.57 percent last week. The only slight increase in rates this week was in 1-year ARMs, which were 4.95 percent, up from 4.85 percent last week. Overall, 1-year ARMs were still down for the year from last year's 5.37 percent.

Freddie Mac began tracking rates in 1971.

Source: The Wall Street Journal, Amy Hoak (1/09/09)

2008 Profile of Home Buyers and Sellers Pennsylvania Report Highlights

2009-01-07T16:43:00.002-05:00

The real estate market offers a variety of choices, opportunities and challenges for home buyers, sellers, and real estate professionals helping them with their transactions. For home buyers, there are numerous ways to search for and find a home, a variety of mortgage products to finance their home and a growing list of services that their agent can provide to assist them in the process. Home sellers can choose to sell their home themselves or enlist the professional assistance of an agent who can provide various levels of service to best suit each home seller‟s needs. Because the real estate market is always evolving, it is important for real estate professionals to have a clear picture of today‟s home buyers and sellers. The 2008 Profile of Home Buyers and Sellers describes the characteristics and motivations of recent home buyers and sellers in Pennsylvania and in so doing helps real estate professionals track the changing demands of consumers in a dynamic market.

CHARACTERISTICS OF HOME BUYERS

The median age of home buyers was 38 years old. Among first-time buyers, the median age was 29.

The median 2007 household income of home buyers in Pennsylvania was $71,700 compared to $74,900 among home buyers nationally.

Sixty-six percent of home buyers had no children under age 18 residing in the home.

Fifty-nine percent of home buyers were married couples, 18 percent single females, 11 percent single males, and 9 percent were unmarried couples.

Six percent of home buyers reported they were born outside the United States, compared to 9 percent nationally.

First-time home buyers accounted for 46 percent of recent home purchases.

Fifty-seven percent of first-time home buyers were between 25 and 34 years old.

The median income of first-time home buyers was $63,000 compared to $60,600 among all first-time buyers nationally.

Ten percent of first-time buyers identified their race or ethnicity as non-white.

The primary reason for the recent home purchase was a desire to own a home for 68 percent of first-time buyers.

For the timing of the home purchase, 50 percent reported it was just the right time for them, 18 percent noted they had to purchase when they did, and 20 percent reported it was either due to improved affordability of homes or availability of homes for sale. Only 2 percent stated they wished they had waited to buy.

Forty-three percent of home buyers reported using social networking Web sites, such as MySpace, Facebook, LinkedIn, and Friendster. Among home buyers aged 18 to 24, 79 percent reported using social networking sites, and 46 percent reported using them every day or nearly every day.

CHARACTERISTICS OF HOMES PURCHASED

New home purchases were 9 percent of recent home purchases.

Sixty-two percent of homes purchased were detached single family homes.

The typical home buyer purchased a home 10 miles from their previous residence.
The median price of homes purchased was $195,000 compared to $204,000 in the U.S.

The typical buyer purchased a home that was 1.760 square feet in size. The median size of home purchased by first-time buyers was 1.530 square feet.

Commuting costs were considered as very or somewhat important by 84 percent of buyers when considering which home to purchase.

Recent home buyers plan to live in their home a median of 10 years.

THE HOME SEARCH PROCESS

Thirty-seven percent of recent buyers reported that their first step in the home-buying process was looking online for properties for sale. Nine percent of first-time buyers and 21 percent of repeat buyers reported their first step was to contact a real estate agent.

Eighty-nine percent of home buyers used the Internet to search for homes.

The typical home buyer searched for a home for a median 12 weeks and saw a median 10 homes.

Ninety percent of home buyers used a real estate professional during their home search.

Among home buyers, the typical Internet searcher was 36 years old and visited a median 10 homes. The typical home buyer who did not use the Internet to search for homes was 54 years old and saw a median 6 homes.

Thirty-five percent of home buyers first learned about the home they purchased from a real estate professional; 39 percent first learned about the home they purchased through the Internet.

Real estate agents were viewed as a very useful information source by 81 percent of buyers, and as a somewhat useful information source by an additional 16 percent of buyers searching for a home.

Three percent of buyers purchased a foreclosed home. 32 percent considered buying a home in foreclosure, but either could not find the right home, or found the purchase process to be too difficult or complex.

HOME BUYING AND REAL ESTATE PROFESSIONALS

Eighty-eight percent of home buyers purchased their home through a real estate agent or broker.

Fifty percent of first-time buyers were referred to their agent by a friend, family member, neighbor or relative.

Ninety-seven percent of buyers ranked honesty and integrity as a "very important" factor when choosing a real estate professional to assist with a home purchase.

When asked about their agent‟s performance on those qualities considered important, 85 percent reported they were "very satisfied" with the honesty and integrity of their agent.

Seventy percent of recent buyers will definitely use their agent again and 17 percent will probably use the agent again or recommend to others.

FINANCING THE HOME PURCHASE

Ninety-four percent of home buyers financed their home purchase; 98 percent of first-time home buyers financed the purchase of their home compared to 90 percent of repeat buyers.

Savings was the chief source of the downpayment for 81 percent of first-time buyers.

Fifty-two percent of repeat buyers used proceeds from the sale of their primary residence toward the downpayment; 46 percent relied on savings for a portion of the downpayment.

49 percent of home buyers reported they have made some sacrifices to be able to make their home purchase, such as reducing spending on luxury items, entertainment or clothing.

Forty-five percent of all buyers believe that their home purchase was a better financial investment than stocks, and an additional 31 percent of buyers feel their home purchase was at least as good an investment as stocks.

HOME SELLERS AND THEIR SELLING EXPERIENCE

The median age of home sellers was 47 years; they had a median income of $86,400.

Seventy-seven percent of home sellers were married and 60 percent had no children under 18 years old living at home.

Fifty-eight percent of sellers traded up to a larger home when purchasing their next home.

The typical home seller owned their home for 8 years.

The typical home was on the market for 8 weeks. Forty-eight percent of home sellers not reduce their asking price before their home sold.

Recent sellers typically sold their homes for 97 percent of the listing price.

Fifty-six percent of sellers offered incentives to attract buyers, most often assistance with closing costs and home warranty policies.

Eighty-nine percent of sellers used an agent or broker to sell their home.

Fifty-two percent of all sellers were very satisfied with the selling process.

HOME SELLERS AND REAL ESTATE PROFESSIONAL

Seventy-one percent of sellers contacted only one agent before selecting one to help assist in the sale of their home.

When selecting a real estate professional, 40 percent of sellers received a recommendation from a friend, neighbor or relative.

The reputation of the agent was the most important factor when choosing a real estate professional for 34 percent of recent sellers.

Fifty-seven percent of sellers used the same agent for their home purchase.
For 22 percent of sellers, their most important expectation was that the real estate agent will help price home competitively. 18 percent of reported their most important expectation was that the agent will help sell the home within a specific timeframe.

Ninety-six percent of sellers reported their home was listed or advertised on the Internet.

Seventy-five percent of sellers used an agent that provided a broad range of services and managed most aspects of the sales transaction.

Fifty-seven percent of sellers reported they would definitely use the same real estate agent again.

FOR SALE BY OWNER SELLERS (FSBO)

Nine percent of sellers sold their home without the assistance of an agent compared to 13 percent of sellers nationally. Among all sellers, 4 percent were FSBO sellers who knew the buyer.

Sixty-nine percent of FSBO sellers reported that they had difficulty in selling their home themselves, in performing tasks such as understanding and performing the necessary paperwork to complete the transaction, preparing the home for sale, and getting the price right.

1/09 National Association of Realtors

The Housing Wealth Debate

2008-12-29T19:44:00.002-05:00

by Lawrence Yun,
Chief Economist, NAR Research

The Wall Street Journal recently published an article raising questions about people's optimistic "outlook" on generating wealth from their homes. The Journal characterized that view as wishful thinking. While not intending to cast aspersions on the analytical acumen of that well-respected publication, I do have a different take on that issue. My attempt in this corresponding article is to lay out the same information the newspaper published — albeit in a different light.

Owning a Home Still a Good Long-Term Investment

The Journal article claims that those hoping for a quick rebound in home prices are likely to be disappointed. Yes, some economists predict home prices won't bottom out before the second half of 2009, and some don't see a bottom until 2011 or 2012. But market timing for home prices is even more difficult than trying to time rises in stock prices. Unlike stocks, real estate is local. In fact, the latest government data show only four states — Arizona, California, Florida, and Nevada — registering home price declines of double digits. This government data has narrow coverage on homes with subprime loans, so the data should be viewed as price trends in neighborhoods with little subprime loan exposure. That makes sense, as less than 10 percent of homes have subprime loans. Interestingly, these four states are the very ones showing recent notable sales increases as buyers have taken advantage of the lower prices. Anecdotal reports of multiple bids suggest prices may be bottoming out in these areas.

Home Prices

Experts say you should generally expect house prices to rise just a bit more than inflation and roughly in line with household income. OK - let's look at how that works in real life. If home prices rise (on average) at an inflation-adjusted rate of 2.5%-3% a year, then nominal home prices can be expected to increase about 4.5%-6% a year. In other words, if a household buys a $200,000 home today, then that home will be worth $310,000 in 10 years, $505,000 in 20 years, and $823,000 in 30 years, assuming a 5% home price growth. Given that most homeowners have 30-year mortgages, all the debt will have been paid off at the 30-year mark. At that point, the $823,000 is pure equity. If home price appreciation increases further — say at 6% — that home will be worth $1.08 million in 30 years. Given America's poor savings rate (that's a different issue altogether), any form of savings discipline such as a monthly mortgage payment helps Americans accumulate wealth.

Confidence in Rising Home Value

Even by the paper's own sources of data used to support its claims, owning a home is often still a better long-term investment than stocks. The Journal cites a poll of 2,000 adults conducted by real estate data provider Zillow.com that found 61% believed the value of their home would either remain level or rise over the next six months. Another survey of more than 1,000 homeowners, sponsored by real-estate-services firm Realogy Corp., found that 91% thought that owning a home was the best long-term investment they could make. And an online survey of 5,000 people commissioned by Citigroup found that just 32% believed it was a good time to invest in stocks — but 51% said it was a good time to buy a home. Well, who am I to argue with housing consumers!

Fundamentals Impacting Home Prices

Yes, as The Journal says, in the long term, house prices are driven by fundamentals that are hard to predict. Those fundamental drivers include immigration, birth rates, the size and nature of households, and incomes. The trick is to figure out where job and income growth will be strongest and where those households want to live.

Again I cite our mantra: All real estate is local. In fact, it can be really local. I remember a story in my local neighborhood paper several years ago about two homes that looked exactly alike. Both homes fetched roughly the same price at one point. But at the time of the Journal's recent story, one home was worth more than double the other - not because of any physical differences in the homes, but because of neighborhood characteristics.

Investors and the Academic Debate

Few homeowners have the time to follow academic debates about the details of home price measurements or the plethora of analyses on home prices published in economic or real estate academic journals, trade publications, or even The Wall Street Journal. But for those who choose to purchase properties as an investment only - that is, they're not actually living in the property — The Journal's story about a couple who, for lack of a better term, became "property managers" is telling. For nearly four decades, a married couple invested in rental properties in and near Stevens Point, WI. They thought real estate was a good way "to get rich slowly." Despite the housing downturn, they have gradually (emphasis added) built their net worth from zero to around $2.5 million through their rental properties. Yes, there were challenges — they have dealt with countless plumbing emergencies, evicted deadbeats and even once had to clean up after a suicide in one of their properties.

Well, I salute that couple. Property management is not for everyone. But some people are willing to face its challenges for the financial rewards — and ignore silly academic debates. Witness the couple's' accumulation of $2.5 million.

Final Thoughts

Buying a home is a serious decision with serious responsibilities. It should be done with care and be based on good information. Consumers should always be wary of any "how to profit from it" slogans but at the same time should not be discouraged by doom-sayers. Yes, those households who bought during the buying frenzy and at the peak a few years back have lost a lot - if they are trying to cash in NOW. But that does not mean that the new crop of buyers will face the same fate. Generally, homeowners do accumulate wealth over the long-term. If one of your clients is a consumer who is financially and emotionally ready, current conditions certainly favor buyers over sellers. The time will surely come again when sellers have the edge. Trying to market-time a purchase may result in remorse from buying "too high" or "selling too late."

Those home buyers willing to stay in the market for the long term will likely feel good and reap the benefits from their long-term investment.

Source: NAR's Real Estate Insights
December 2008

Amid Rate Drops, Mortgage Applications Soar

2008-12-29T19:33:00.001-05:00

Daily Real Estate News December 24, 2008

With interest rates approaching reaching historic lows,the application volume for mortgages jumped a seasonally adjusted 48 percent last week compared with the previous week, according to the Mortgage Bankers Association's weekly survey.

Application activity for the week ending December 19th was 124.6 percent over the same period a year ago,the Washington, D.C-based MBA said. The spike in applications coincided with another drop in mortgage rates, as the government's efforts to unfreeze the residential-mortgage market show further signs of having the desired effect.

Applications to refinance existing mortgages increased 62.6 percent on a week-to-week basis, while applications filed for mortgages to buy homes increased a seasonally adjusted 10.6 percent. Refinancings made up 83.2 percent of all applications filed last week, up from 76.9 percent the previous week.

According to the MBA survey, interest rates fell across the board:
Rates on 30-year fixed-rate mortgages averaged 5.04 percent last week, their lowest level in more than five years. This was down from 5.18 percent the previous week.
Fifteen-year fixed-rate mortgages averaged 4.91 percent, down from 4.93 percent the week before.

One-year ARMs averaged 6.36 percent, down from 6.63 percent.

Source: Mortgage Bankers Association and MarketWatch (12/24/08)

Mortgage Rates Plunge to Record Lows

2008-12-19T20:43:00.001-05:00

Daily Real Estate News December 19, 2008

In response to the Federal Reserve's cut in the federal funds rate to near zero, Freddie Mac reports that the 30-year fixed mortgage rate fell to 5.17 percent during the week ended Dec. 18—down from 5.47 percent last week and the lowest since the survey's inception in 1971.

Interest on 15-year fixed loans slipped to 4.92 percent from 5.20 percent. Meanwhile, the five-year hybrid adjustable mortgage rate dropped to 5.6 percent from 5.82 percent; and the one-year ARM dipped to 4.94 percent from 5.09 percent.

A year ago, the 30-year fixed rate stood at 6.14 percent, the 15-year fixed rate at 5.79 percent, the five-year hybrid ARM at 5.9 percent, and the one-year ARM at 5.51 percent.

Source: The Wall Street Journal, Steve Kerch (12/19/08)

Is Now a Good Time to Refinance?

2008-12-19T20:41:00.000-05:00

Daily Real Estate News December 19, 2008

Refinancing now sounds appealing, but for lots of people, it isn’t all that easy. Applications for refinances tripled earlier this month after the Federal Reserve promised to buy up $600 billion of mortgage debt. And rates for 30-year fixed mortgages are falling below 5 percent – the lowest in 50 years – but many home owners will have trouble doing the deal.

Having at least 20 percent equity in a home is important. A credit score of at least 720 and a debt ratio that is less than 43 percent are both essential.

Jumbo mortgages are still expensive. A 5/1 adjustable-rate with an initial interest rate for five years and an annual reset is averaging 6.6 percent. Traditional 30-year fixed are at 7.49 percent. Home owners in this situation may have to just ride it out.

Source: Business Week, Lauren Young (12/22/08)

10 Real Estate Predictions for 2009

2008-12-19T20:39:00.001-05:00

Daily Real Estate News December 17, 2008

2009 is likely to be a year of continuing adjustment to a changing real estate marketplace. Prepare yourself and your business with these predictions from HGTV’s FrontDoor.com Web site:

Sellers will continue to face falling home values in the new year because they’ll be competing with banks and builders who are slashing prices to sell off the still-huge inventory of foreclosures and new homes.

The Obama administration will act on its plan to crack down on abusive lending practices.

Mortgage holders in danger of losing their homes will receive more assistance from a variety of programs since the Senate's Joint Economic Committee has predicted two million foreclosures in 2009.

Banks' restructuring should bring increasing calm, making loan modifications and short sales easier to obtain. Eventually this will lead to a decrease in the number of bank-owned properties on the market.

Mortgage applications will continue to receive a comprehensive review, requiring borrowers to provide extensive income and debt documentation. Those with the best credit will get the best rates.

The foreclosure crisis has created wiser consumers, with a deeper understanding of real estate, mortgages, and credit enabling better decision-making going forward.

Green is good with increasing numbers of buyers opting for smaller homes that are within walking distance of school and work.

Buyers and sellers will be more and more tech savvy, relying on tools like video, webcasts, and mobile search. Consumers and practitioners will benefit from being ahead of the curve.

Prices will be low as will interest rates, creating great buying opportunities, and likely, inspiring reluctant buyers to make their move.

The recession will end and buyers will regain confidence in the market.

Source: Frontdoor.com (12/03/08)

Low Prices, Low Rates Mean Opportunity

2008-12-12T12:16:00.001-05:00

Daily Real Estate News December 8, 2008

Housing prices have fallen dramatically all over the country and rates on 30-year fixed-rate mortgages are already close to 5.5 percent. Experts say it's possible, with government encouragement, that rates will fall as low as 4.5 percent.Now is the time for first-time buyers to step up. Here are some things to consider:
Prices have always softened in the winter. As temperatures fall, bargain hunters will have bigger then usual opportunities.

New homes are likely to become scarce. Ian Shepherdson, chief United States economist for the research firm High Frequency Economics, said he believes that a steep drop-off in inventory of new homes is coming soon, due to a rapid decrease in home builder activity.

Location, location, location. Buying the best-priced house in a really good neighborhood is still smart.

Will values go up? You may have to live in a house for 10 years, but over time, buyers will almost certainly make money.

Source: The New York Times, Ron Lieber (12/05/08)

Are Some Owners Purposefully Falling Behind?

2008-12-12T12:14:00.000-05:00

Daily Real Estate News December 12, 2008

Housing experts are growing increasingly alarmed that programs to bail out troubled home owners might have the unintended consequence of encouraging people to miss mortgage payments in order to qualify for easier loan terms.

Such initiatives typically require that borrowers be 60 to 90 days late on payments to get a mortgage reworked. In an attempt to prevent abuses, lenders are scrutinizing home owners' financial status—by poring over tax records, pay stubs, investment accounts, and bank statements—to determine if they really need a loan modification to avoid foreclosure.

Source: USA Today, Stephanie Armour (12/10/08)

NAR: Pending Home Sales Holding Steady

2008-12-12T12:10:00.001-05:00

Daily Real Estate News December 9, 2008

Pending home sales eased against a deteriorating economic backdrop but remain in a stable range, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September. It is 1 percent below October 2007 when it was 89.8.

“Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” says Lawrence Yun, NAR chief economist. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”

Conditions remain uneven around the country, but some areas that are showing healthy gains in pending home sales from a year ago include many Florida and California markets; Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas. By the RegionHere's what the PHSI showed across the country:

South: jumped 7.8 percent to 95.9 in October but remains 2.9 percent below a year ago.
Northeast: rose 0.6 percent to 68.1 but is 14.1 percent below October 2007.
Midwest: declined 4.3 percent to 79.7 in October and is 6.8 percent below a year ago.
West: fell 8.7 percent to 103.7 but is 17.4 percent higher than October 2007.

The Economic ForecastNew-home sales: for 2008 should total 486,000 this year, decline to 393,000 in 2009 and then grow to 446,000 in 2010. Housing starts, including multifamily units, are projected at 934,000 units in 2008 and 731,000 next year before rising to 772,000 in 2010.Existing-home sales: looking at middle-ground assumptions, existing-home sales are forecast to total 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010.Home prices: “Price projections are challenging in an environment with so many variables and divergent local conditions,” Yun says. “The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration.” NAR’s housing affordability index is likely to remain quite favorable, averaging 138 in 2009.

Unemployment rate: is estimated at 7.2 percent in the first quarter, rising to 8.3 percent by the end of 2009. Inflation: as measured by the Consumer Price Index, is seen at 0.7 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.5 percent in 2009.GDP: Yun expects growth in the U.S. gross domestic product (GDP) to contract through the first half of 2009, then stabilize and expand in latter part of the year – lifted by a home sales recovery. “Given the critical role of housing in an economic recovery, we’re confident sufficient stimulus will be offered to bring more buyers to the market,” he says.

Could a drop in interest rates help? The 30-year fixed-rate mortgage will probably decline to 5.6 percent in the first quarter, rise slowly to 6 percent by the end of 2009, and average 6.2 percent in 2010. NAR President Charles McMillan says he’s hopeful about considerations by the U.S. Treasury to help the housing market. “Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy,” McMillan says. “We’re very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure.”

Source: NAR

Green condos under construction soon in Kimberton

2008-12-05T18:06:00.000-05:00

A groundbreaking is tentatively scheduled this month for Kimberton Village Green, a residential and commercial condominium complex touted as Chester County’s first green development.

The 28 condominiums are designed to minimize the impact on the Earth through building techniques that reduce construction waste, a sustainable approach to managing storm water runoff, and the extensive use of nontoxic paints and building materials, making the air inside much healthier. Technology will let residents see how they’re using energy in their homes, and ports for plug-in hybrid cars will be available in the garage.

Pirello said Kimberton Village Green has received a platinum rating from the U.S. Green Building Council due to its Leadership in Energy and Environmental Design (LEED) practices.

Pirello said the prefabricated condos are being delivered in early spring.

Source; Daily Local; 12/1/08