Daily Archives: April 29, 2012

Lilly loves Costco mortgage program | Mount Kisco NY Real Estate

Leave a reply

I caught some flack from SettlementOne about Costco’s ($88.69 0.61%) mortgage and refinance program because they felt my depiction of the Costco mortgage program as not particularly personal was unfair. 

SettlementOne offers real estate settlement services under the program.

Well, here we present the other side of the story. Lilly Neubauer and her husband, Marcus, refinanced their mortgage through Costco’s program recently. The couple refinanced not out of financial desperation, but were nonetheless eager to take advantage of lower interest rates. Lilly reports she and her husband are extremely happy with working with Costco. Lilly even went so far as to say, “Yay, yay, yay! I love Costco!”

Clearly, she was quite satisfied. And fair is fair.

Here is what she had to say:

“I subscribe to Costco’s Facebook page and my husband received their emails so we both heard about refinancing with them. Costco took us from a 5.5% (which was low when we bought) to 3.875% interest. Closing costs were around $1,000 and could be applied to the principal. Overall we’re saving $200 a month on our mortgage, which we can use as an overpayment or put into savings or use for an unexpected cost. That freedom has been really great for us! 

All of the initial steps and paperwork is handled over email. You have to really do your homework, read every single document and not be afraid to ask questions. A notary came by our house on a weekday evening to perform the closing. It worked great for us! We banked with Costco’s partner bank. I’m not sure if there is an option to use a different bank but this worked for us, and we did not have another preference so we were happy with it.

This is not our forever home, just an early investment that we would like to keep about 10 years or so total, so unless the interest rates drop significantly again we do not plan to refinance. When we do sell this home and buy again I will definitely look for how we can obtain our mortgage through Costco and we have referred the program to other friends and even our real estate agent who all agreed that it is a great opportunity.” 

Now, if that isn’t the other side of the story, I don’t know what is.

via housingwire.com

Homebuilders report 1Q price hikes after 22% order growth | North Salem NY Real Estate

Leave a reply

Homebuilders experienced a 22% order growth in the first quarter and are riding a tailwind heading into the second, causing Barclays Capital housing analysts to see the first signs of price increases coming back to the market.

“Not everywhere, but in enough places to matter,” they say.

In many of the markets that Barclays reviewed, it witnessed a return of broad-based price increases — a possibility, it says, very few industry watchers considered.

Stephen Kim, managing director of Barclays’ homebuilding division, tells HousingWire that Phoenix, Denver, Orange County, Calif., Westchester County, N.Y., and even parts of the hard-hit Riverside-San Bernardino, Calif., region is witnessing price comebacks.

However, commentary so far from builders reveals mixed opinions about how broad-based the increases are.

The most upbeat commentary regarding pricing has come from Lennar ($28.42 1.04%), Meritage Homes ($29.05 0%) and Ryland Group ($22.71 1.09%). Those three builders have posted the strongest order trends. All three indicate to Barclays that the opportunity for price increases is stretching from geographies and buyer types.

D.R. Horton ($16.52 0.38%), PulteGroup ($10.08 0.5%) and M/I Homes ($14.04 0.34%) posted order gains of 10% to 20%, but were relatively more cautious about their ability to secure price increases on a broad basis, analysts say.

“Yet, looking past the rhetoric, we believe that the underlying market condition being described on all of the calls is fairly consistent: Price increases are still not the norm, but in the top 25% to 35% of the builders’ communities, they are back and forcing analysts to rethink what housing’s recovery can look like in 2012,” analysts contend.

The builders are benefiting in part from low inventories of existing homes, which are being snapped up by investors and foreign buyers. That has prompted a number of consumers to start considering new homes.

Click on the image below to see a three-year breakout of homebuilder order growth:

Homebuilder orders per community are running at 2.3 per month, the highest first-quarter rate in four years. There’s still a long path ahead, however. Analysts at Barclays expect absorption rates to return to their long-term average of 3.5 sales per community per month over the next few years.

“So far, the order activity in the first quarter has lived up to our high expectations, making us comfortable with our outlook for 22% order growth in the second quarter,” they say.

With the noticeable exception of KB Home ($8.88 0.43%), sales growth at builders that have reported was quite strong, led by Meritage with a 36% increase. The order decline at KB Home is due to company-specific disruptions with its mortgage partner. Excluding it, the group’s orders are up an average of 26% annually.

Commentary on most of the conference calls indicates that trends strengthened in the quarter and that this pace continued in April.

Additionally, the recent strength in homebuilder orders might suggest that housing starts are set to elevate over the next few months. There is a close relationship between sales orders reported by builders and single-family housing starts reported in the following quarter.

Based on the orders announced this quarter, Barclays estimates that single-family housing starts over the next few months will average 493,000 after the 462,000 reported last month and 431,000 for the full year 2011.

via housingwire.com

Phoenix’s housing market may be rising from the ashes | Cross River NY Real Estate

Leave a reply

Phoenix’s housing market may be on the rise. John Burns Real Estate Consulting said the area is outpacing the recovery of other hard hit areas like Las Vegas, Riverside-San Bernardino and Sacramento.

“Phoenix was one of the hardest-hit housing markets during the bust, with home values declining 57% from 2006 through mid-2011,” said Adam Artunian, senior research analyst with the company. “But since the middle of 2011, the housing conditions in Phoenix have markedly improved and prices have begun to rise.”

According to the report, investors now make up 45% of all buyers in the area, and first-time buyers now have difficulty competing with all-cash offers coming from investors. This often creates a bidding war that raises the price of the home.

The effort by investors is well worth it, however. With a current average single-family rental rate of $12,500 per year and the median selling price of distressed homes in the area well below $127,000, the report says investors can expect between a 5% to 10% annual return. That, however, may not last.

“Competition for distressed resale homes is likely to get more challenging for buyers, with Phoenix making national headlines recently as one of the best markets in the country to purchase investment homes and enjoy favorable returns as rentals,” Artunian said.

Inventory also is very low at 2.4 months, down from almost five months just one year ago and more than 12 months in early 2008. Supply hasn’t been this low since late 2005 when the home market was at “feverish level,” said Artunian.

“Investors and foreign buyers have helped reduce Phoenix’s housing inventory to its lowest level in over six years,” he said.

Low inventory creates competition and has helped stabilizes prices, he noted. The company’s Burns Home Value Index is up 1.5% year-over-year for the Phoenix market.

Resale listings have also fallen 43% since March 2011 and are now as low as they were at the peak of the market in September 2005.

Phoenix is a destination for retirees escaping colder climates. Artunian said this past winter created the “perfect storm” for home sales, given improving conditions, low interest rates, good weather and the tourism from Major League Baseball’s spring training activity, which takes place near Pheonix. 

“The true test of Phoenix housing market strength will be this summer, when these favorable elements subside, and the housing market will stand more on its own,” he said.

via housingwire.com

Realtors® Confidence Index Reports Residential Market Improvement | Waccabuc NY Real Estate

Leave a reply

Realtor® comments and replies to the latest Realtors® Confidence Index continued to indicate recovery in the residential markets. All real estate is local, so comments were varied depending on location. The problems noted in previous months continue. For example,

  • Obtaining a mortgage is reported as difficult.
  • Bargain hunters and low-price bids continue.
  • Pricing continues to be a challenge.
  • The appraisal process continues to be a problem.

However, fewer respondents noted major problems than had previously been the case, and a growing number of respondents in recent months have been indicating cases of multiple bidding, low inventories, a resurgence of buyer interest, and the rapid resolution of distressed property sales. There continues to be discussions of Shadow Inventory in the press. Realtor® respondents appear to believe that increased inventories of unsold homes will not be a problem. Many respondents cited an inventory shortage.

The health of the real estate market appears to be a function of location of the respondent, with some markets starting to trend upwards. The real estate markets are driven by jobs and the economy—and there the reports have been mixed. There has been relatively good job growth in recent months, but not enough to restore the economy to acceptable unemployment levels. We are still looking at possibly three to four years before unemployment reaches reasonable levels if job creation continues at its current pace. In addition, there are a variety of major uncertainties impacting the economy—jobs, gasoline prices, unemployment, budget deficits, and a variety of other potentially negative situation.

In spite of all the economic negativity in recent months, however, the comments in this month’s RCI show a market starting to turn. Overall, this month’s Realtors® Confidence Index seems to indicate a continued market recovery.

via economistsoutlook.blogs.realtor.org