Daily Archives: April 1, 2014

Sagging Sales: It’s Not Just the Weather | Chappaqua Real Estate

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It’s hard to build, buy or sell a home in when ice coats the drive and below freezing winds discourage roof inspections.  There’s no doubt this year’s endless winter have curbed construction and sales.  However, sagging sales are not just a function of the nasty weather that will melt away with the first warm days.

If that were the case, how do you explain California?

In February, California sales were 18.9 percent below the average of 31,660 sales for all the months of February since 1988, according to DataQuick.  An estimated 25,680 new and resale houses and condos sold statewide last month, down 0.6 percent from 25,832 in January and down 10.6 percent from 28,719 sales in February 2013, according to San Diego-based DataQuick.

PropertyRadar reported California single-family home and condominium sales fell 1.4 percent in February 2014 from January and declined 16.1 percent from February 2013.  Last month marked the lowest February sales since 2008. “Rapid price increases and rising interest rates in concert with sluggish income and employment growth have slowed demand…” said Madeline Schnapp, Director of Economic Research for PropertyRadar.  “Tougher borrowing standards, elevated prices, increasing borrowing costs and historically low inventory continue to exert a drag on market activity.”

According to the California Association of Realtors. February marked the fourth straight month that sales were below the 400,000 level and the seventh straight decline on a year-over-year basis. Sales in February slipped 0.7 percent from a revised 363,930 in January but were down 13.7 percent from a revised 418,520 in February 2013. The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors.

 

http://www.realestateeconomywatch.com/2014/03/sagging-sales-its-not-just-the-weather/

 

Texas Tops LMM List of Investment Targets | Armonk Homes

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Three Texas markets lead the list of markets facing  a housing shortage that will boost home prices even higher than expected in the spring buying season, according to Local Market Monitor’s quarterly top investment targets.

“The economy has been growing quickly in these markets, there are lots of renters, and there aren’t many foreclosed properties to provide competition,” noted Ingo Winzer, president and founder of Local Market Monitor. Fort Worth, Houston and Austin top LMM’s first quarter list.

“The upward pressure on home prices—economic growth and a history of slow home construction—eased somewhat due to the horrible winter weather,” said David Hicks, co-president of HomeVestors, which sponsors the research. “But we think there are a number of markets nationwide that will run up against a housing shortage that will boost home prices even higher than most of us initially expected as the spring thaw gets underway.”

Hicks noted that new quarterly data compiled by Local Market Monitor identifies the markets where conditions are right for home prices to rise, making them prime targets for investors in single family homes as rental properties.

“In all the major markets in Texas, we are experiencing an actual shortage of properties for sale.’ Hicks noted. “Our franchises tell us they are quickly selling every house they can buy.” HomeVestors’ franchises are all independently owned and operated, which means they understand from a local viewpoint what is happening in over 110 markets nationwide.

 

http://www.realestateeconomywatch.com/2014/03/texas-tops-lmm-list-of-investment-targets/

 

Big Boys Have Moved into Smaller Markets | Mt Kisco Real Estate

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Big institutional investors — companies that have purchased at least 10 properties in a calendar year — accounted for 5.9 percent of all U.S. residential property sales in February, up from a revised 5.0 percent of sales in January but down from 7.2 percent of sales in February 2013. February was the third consecutive month where the institutional investor share of sales declined on a year-over-year basis after 19 consecutive months of year-over-year increases, according to the latest report from RealtyTrac.

Among metropolitan statistical areas with a population of 500,000 or more, cities with the highest share of institutional investor purchases in February were Atlanta (25.2 percent), Columbus, Ohio, (21.4 percent), Knoxville, Tenn., (18.2 percent), Phoenix (15.2 percent), and Cape Coral-Fort Myers, Fla. (14.8 percent).

“Since Fannie Mae inventory is mostly comprised of completed home foreclosures with FHA loans, investors target these properties because they tend to be smaller homes that make for better rental property investments,” said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty, covering the Oklahoma City and Tulsa, Okla., where the institutional investor share of purchases dropped from a year ago. “There is very little Fannie Mae inventory left, which coincides with the fact that institutional investors have slowly backed out of the market.”

Metros with the biggest year-over-year increases in institutional investor share were Knoxville, Tenn., (from 3.3 percent in February 2013 to 18.2 percent in February 2014), Little Rock, Ark., (from 3.2 percent in February 2013 to 12.1 percent in February 2014), Milwaukee, Wis. (from 3.5 percent in February 2013 to 9.2 percent in February 2014), San Francisco (from 3.9 percent in February 2013 to 9.5 percent in February 2014), San Antonio, Texas (from 4.6 percent in February 2013 to 8.3 percent in February 2014), and Columbus, Ohio (from 13.3 percent in February 2013 to 21.4 percent in February 2014).

 

 

http://www.realestateeconomywatch.com/2014/03/big-boys-have-moved-into-smaller-markets-in-the-south-and-midwest/

Credit Scores: Mortgage Lenders Ease Requirements | Waccabuc Real Estate

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According to a report prepared by Ellie Mae, a mortgage technology company, the average FICO credit score for approved mortgage loans dropped to 727 in December 2013. It was 748 a year earlier.

The average credit score for home loans backed by Fannie Mae and Freddie Mac also dropped a little; December 2013 borrowers had an average credit score of 756, down from December 2012′s average of 761.

Refinance mortgages backed by Fannie Mae or Freddie Mac were approved with an average credit score of 729 in December 2013; this was a significant drop from the average credit score of 763 in December 2012.

Only 46 percent of mortgage applicants approved had credit scores above 750 in December 2013 while approximately 57 percent of applicants had credit scores over 750 a year earlier. Mortgage Credit Scores: What’s Going On? – –

 

Reasons for approving mortgages with lower minimum credit scores include mortgage lenders’ growing confidence as the economy improves and mortgage defaults decrease.   As rates rise and refinancing activity dries up, lenders may also exercise more flexibility with credit scores in order to encourage more business.

While this isn’t life-changing news for would-be mortgage applicants with sub-par credit scores, a mortgage lender’s willingness to work with less-than-perfect credit is a positive sign in the aftermath of the recession.

But wait — there are conflicting opinions concerning how or if mortgage lenders will change their minimum required credit scores for any but the best-qualified applicants. Mortgage applicants with credit problems can expect to encounter glitches on the path to mortgage approval. Mortgage Underwriting Policies: Out with Overlays — or Not

Another practice that can limit a mortgage applicant’s chances of approval is the use of “lender overlays.” Lender overlays are underwriting requirements, imposed by lenders, in addition to the guidelines set out by Fannie Mae, Freddie Mac or the federal government. Overlays create extra hoops for applicants to jump through (or get stuck in).

Some analysts have said that mortgage lenders may be willing to reduce or eliminate lender overlays if economic conditions continue to improve.

 

 

http://blog.listedby.com/uncategorized/1064/

10 things your real-estate agent won’t tell you | South Salem Homes

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1. “I’m using your house to sell myself.”

U.S. home prices have rebounded to mid-2004 levels, according to the latest S&P/Case-Shiller home price survey, and though monthly gains are slowing, this spring — traditionally the prime home-buying season — looks to be a sellers’ market.

That’s good news for real-estate agents as well. A 2013 National Association of Realtors member survey showed that agents’ $34,000 median annual income last year reflected a level not seen since 2006, just before the U.S. housing boom went bust; incomes in 2012 were up 37% from 2010.

But while most agents are hardworking professionals, buyers and sellers may encounter some agents who see only the “me” in home.

To get a listing, some agents tell dazzling stories about houses they’ve sold in your area. They’ll promise to splash photos of your home across the advertising pages of glossy magazines and blanket your neighborhood with direct mail to lure move-up buyers.

Critics say these agents are great marketers — of themselves. Photos in real-estate circulars “market the agent,” says Karen Krupsaw, vice president of real-estate operations at brokerage website Redfin. Mailers generate interest in the neighborhood — not the home. “It’s an avenue [brokers take] to generate business for themselves — using your house,” she says.

Furthermore, just because an agent does a lot of business, that doesn’t necessarily mean his clients were happy with his work, Krupsaw says. Indeed, the Council of Better Business Bureaus reports that consumer complaints against agents nationwide rose 22% in 2012 over the previous year.

The real estate website Trulia advises sellers to ask an agent how long their recent listings stayed on the market before selling, and compare that to the neighborhood’s history. Find out the average sale price compared with the average listing price of the homes they’ve sold. And ask how many other sellers the agent currently represents.

 

 

http://finance.yahoo.com/news/10-things-real-estate-agent-124050800.html

7 Things Not to Do When Flipping Houses | Cross River Real Estate

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Mold, wood rot, warped floors, a dated bathroom — these problems might seem a nightmare to the average home buyer, but to a seasoned flipper, a house full of flaws could mean profits.

With the housing market improving after the 2008 crash, house flippers — and reality TV shows about house flippers — are back. From “Flipping San Diego” to “Flipping Boston,” the nationwide trend of buying a house at less than market value, spending some money to fix it up and reselling it at a higher price is once again a lucrative way to turn a profit.

Seasoned house-flippers Kim Williams and Maria Powell spent time with “Nightline” in and out of various fixer-uppers in a Charlotte, N.C., neighborhood — flips in North Carolina have increased by 14 percent in the past year, with flippers averaging a profit of $50,000 per property.

The duo talked about a few of the do’s and don’ts of flipping they have learned over the years.

1. Don’t Go Over Budget When Buying the Home
Both Williams and Powell say it’s important to stay within your budget and purchase “at the right price” from the start. Additional costs can come later in upgrades to the house or contractor costs. So don’t get attached to a house when you walk in.

“It’s not emotional,” Powell said.

2. Don’t Ignore the Upgrades You Really Should Make
Some properties need only the bare minimum, Powell said, such as putting a fresh coat of paint on the walls or adding carpets. But if the bathroom needs new plumbing or if the kitchen needs new appliances, Powell said flippers would get more on their returns if they spent the money to make those necessary upgrades.

“I think sometimes people don’t see the things they could do to bring the money back,” she said. “If you do the minimum, there are some properties you should do that [for], but if the neighborhood will carry a higher price point, then you want the best use of the property.”

3. Don’t Buy a Home Without Getting It Inspected First
A few cracks in the foundation or a leaky window could be easy fixes or major problems, so both Powell and Williams said getting an inspection before purchasing a home, even if you have already put in an offer, is very important before going to closing.