POSITIVE INDICATOR OF HOUSING RECOVERY

Home Prices Rebound to 2003 Levels

Posted REALEstate Information,Real Estate News,Real Estate Trends,Today's Marketplace,Today's Top Story | Comments Disabled

^[1]More great market news came through yesterday: According to S&P/Case-Shiller, in July, the average home price rose to the same level as those seen during summer 2003, when the housing boom first started its journey toward the 2006 peak. While this may not signify that we are currently standing on the cusp of a market boom, it does show a significant turnaround, and perhaps hints at a definite end to real estate’s bleak streak.
The recent S&P/Case-Shiller national home price index showed that in July, prices increased by 1.5 percent for the 10-City Composite and by 1.6 percent for the 20-City Composite.

RETURN ON INVESTMENT?

3 tips for sellers considering costly driveway repair

REThink Real Estate
By Tara-Nicholle Nelson
Inman News®

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Q: My wife and I are planning to retire in 2015. We will sell our home and relocate. We're looking at things we should do now to make our home more marketable. We are already in a high-demand community near major military bases and employers in Virginia. Homes sell fairly well here, even now.
While our concrete driveway is sound, it does have numerous noticeable cracks in it.
A replacement driveway costs around $10,000. My attempts at repair only make it look worse. For a roughly $300,000 home that's in otherwise pristine condition, is this large expense worth it for sale purposes? --Roger
A: First off, you and your wife are essentially a listing agent's dream, in that you're thinking and planning a couple of years in advance on how to best prepare your property to sell. Big kudos!
There are several things you should factor into your decision regarding your driveway:
1. Get local, expert input on how buyers will view the cracks. If homes move quickly in your market due to high demand and premium location, it's entirely possible that your driveway's cosmetic cracks -- assuming they truly are cosmetic, and the driveway is sound -- might have little or no impact on getting it sold. However, it's also possible that a buyer might see very major or deep cracks and assume they are more than cosmetic, making someone who would otherwise make an offer hesitate and/or guess at repair or replacement costs and factor that into his offer price.
Also, a local broker or agent can give you their opinion on whether the cracks are so severe that a buyer's appraiser is likely to call them out as a health and safety hazard (some concrete cracks in areas of high foot traffic can be deemed a "trip" hazard).
Look around at the other homes on the market in your area and the state of their driveways to get a sense for how yours will come off to a prospective buyer. I would urge you to contact several listing agents in your area and ask them for their input; they know what buyers in your area care about, and can also just take a look at your driveway and see how "noticeable" the cracks will be to a prospective buyer.
2. Don't expect a huge ROI -- or any at all. That said, if you do end up deciding to replace the driveway, don't expect to get some weighty return on your investment (ROI), like that your home will sell for $10,000 more than the neighbor's. For the most part, these sorts of things are considered more maintenance than home improvement. For your purposes, that doesn't mean you shouldn't do it, it simply means that if you do it, consider what you spend an investment in getting the place sold -- period.
If every other home in the area has a crack-free driveway and yours appears to be crumbling to pieces, whatever you do to repair or replace it will simply bring your home up to the standard of the competition; in fact, if you decide against repairing it, you should not be surprised to see buyers look for a discount based on the condition (again, assuming these cracks really are that noticeable).
3. Rethink your inputs and assumptions. Will it really cost $10,000 to fix your driveway? Consider getting some actual contractor bids. And are you sure that it's beyond being professionally resurfaced, as opposed to entirely replaced? I understand that there may be epoxies and overlays that may cost less than a total replacement.
Overall, as you take on the project of preparing your home for resale, I would strongly encourage you to get friends and family members to refer you to a local agent you can trust, and meet with a couple of these experts for their recommendations and advice on which things do and do not belong on your to-do list. Also, local brokers and agents can be great sources for contractors they work with on a repeat basis to get homes ready for resale.

KITCHEN IMPROVEMENTS

Low-Cost Kitchen Improvements for Any Home

 

Not every home owner can splurge on a total upscale kitchen redo, now pegged on average at $111,000, according to the latest Cost vs. Value Report from Remodeling magazine. Many home owners don’t even have the funds for a minor kitchen remodeling project, which is placed at around $20,000.
But a lack of funds isn’t necessarily the only issue. Even home owners with fat wallets and a love of congregating and cooking in a stylish kitchen may not want to invest so much, given the up-and-down nature of today’s housing market.
Specifically, two factors are holding back home owners from taking on kitchen redos:
▪ There’s no guarantee that prospective buyers will like, say, the sellers’ tangerine-painted walls — even if orange is oh-so-chic these days — or that a restaurant-style range will win them over, especially if they’re better at calling for reservations or take-out.
▪ The dollars invested may never be recouped, no matter how long home owners stay put. An upscale overhaul will return only about 57 percent of the money spent on the project, and a mid-range redo about 66 percent, according to the Cost vs. Value Report.
But the good news for those who still feel their current kitchen won’t do is that there’s loads of inspiration to appeal and borrow ideas from — those handsome rooms shown in the background of Food Network programs and other TV shows and movies, for example, or glossy home and design magazines.
The kitchen remains an important gathering space for many home owners — and one of the first places would-be-buyers look to decide if they’re interested in a purchase. Because of that, it should be a goal to make the kitchen as nice as possible with the funds at hand. Even if a seller or real estate agent has $20,000, $10,000, or just $5,000 to spend, those dollars can deliver a lot to make the kitchen look and function better.
Here are a dozen low-cost ideas you and your clients can use to improve this critical room:
▪ Paint remains the least expensive change agent. Home owners should take their cue from other colors in the room that are likely to stay — the “nonperishables,” says Chicago-based designer Mary Lou Kalmus. It might come from the backsplash or floor tile, or if the entire room is swathed in neutrals, it could be colors in the rest of the house, such as in an adjacent family room. Because the kitchen gets heavy use, it’s best if they use at least an eggshell rather than a flat finish.
▪ Backsplash tiles can be replaced, but Kalmus suggests home owners do so from the base of the upper cabinets down to the countertop — a full 18 inches is recommended. Top on her list of favorite choices are glass or newer-looking metallic tiles. She also suggests running them vertically rather than horizontally for a less-expected look.
▪ Replacing a countertop or two can help a room make an instant, fresh impression. And if money’s tight, home owners can go with a laminate rather than granite. To prevent laminate from scratching or showing burn marks, a textured choice is best.
▪ Tell clients to go with decor icons such as stainless steel that tend to appeal universally, says design expert and author Christopher Lowell, based in Santa Fe, N.M. They can start by replacing some dated and dysfunctional appliances with purchases at places like Sears or Costco, which offer professional-style models that bring a restaurant look at affordable prices. Once home owners introduce stainless options, they may want to run with the idea throughout — e.g., paper towel holders, trash cans, and cookware, Lowell says.
▪ If all the older appliances can’t be replaced, home owners might be wise to focus on one or two, which can still make a difference. Because the refrigerator may be the largest item in the room, Kalmus suggests changing it first if it’s old or small and considering a model with French doors, which offers the plus of storing larger items inside both the refrigerator and freezer sections and having a freezer on the bottom. For highly efficient cooking, plus the advantage of having instant on-off heat, an induction cooktop is another wise new appliance choice, though the newer technology often costs more. And even a new hood that’s more updated or visually interesting can provide a good focal point, says Los Angeles–area designer Christoper Grubb, president of Arch-Interiors Design Group.
▪ Betterlighting can make a huge difference in how much time home owners want to spend in their kitchen and how well it shows to buyers. The best spaces incorporate three essential layers: recessed lighting for an overall effect, with 4-inch rather than 6-inch cans for a less obtrusive look; undercabinet lights to perform tasks, with efficient LEDs or xenon bulbs for quality and energy efficiency; and a decorative fixture or two for mood-making such as pendants, sconces, or a chandelier. Bulbs should depend on manufacturers’ recommendations, but now often are halogens or incandescents. “The decorative choices can add a new design vocabulary to the room,” says San Francisco architect Christian Dauer.
▪ Small 8-inch floor tiles can quickly date a room, as can busy patterns. So replacing them with 16- to 22-inch porcelain floor tiles may make good economic and design sense, as well as decrease maintenance. A bigger budget may permit natural stone. Dauer is keen on wood floors since they’re easy on feet and favors bamboo and cork or a repeat of a wood used elsewhere in the home.
▪ Top on the “get-rid-of list” for many home owners are dark, dated cabinets. But since cabinetry represents 60 percent of many kitchen remodeling budgets, it’s often not possible to replace it totally. Several possibilities exist: Replace the doors or take a less expensive route and repaint them, suggests Kalmus, who also offers some caveats. Be sure the interiors still offer enough room and work well, or else the solution is just a temporary Band-Aid she says, and be sure the paint will cover well since sometimes it won’t if they’re very dark. “Full-overlay doors, for example, usually can be refaced, but the sides may first need sanding and prepping,” Dauer says. For a different punch, Lowell suggests replacing one or two doors in frosted glass within stainless steel frames, while Grubb throws out the idea of removing the fronts completely for a European look. In most cases, new spiffy knobs can make a huge improvement.
▪ For those without sufficient storage— a common complaint of older or poorly arranged kitchens — try finding a closet even if not right in the kitchen but in an adjacent space. The best pantries are equipped with shelves of different heights to arrange a variety of canned goods and with pull-out drawers to make reaching to the back easier.
▪ Because open layouts are high on many buyers’ wish lists, taking down a wall or part of one between a kitchen and adjacent space should be considered if the kitchen is small and closed in and the wall isn’t a load-bearing, supporting one. Be careful that vents aren’t running through it, or be prepared to replace them, Kalmus says. If this isn’t possible, home owners might change out windows or doors for better light, views, and insulation. A new greenhouse-style window can become a spot to grow herbs and small plants.
▪ If home owners have room for an island, but are tight on funds, they might buy a gleaming, stainless-steel, counter-height table from a local restaurant supply store with a shelf underneath, add a few chopping boards from the same supply, and create a professional-looking center they can take with them, says Lowell. This addition also helps free other countertops of clutter.
▪ If the ultimate goal still is to gain a brand new kitchen when dollars permit, a better use of limited funds may be to hire an architect or designer skilled in kitchen planning to draw up a detailed layout that can be bid out later. Many design pros charge a flat fee or hourly rate. Dauer says the price will vary depending on the part of the country, size of the room, wish list, and extent of the remodeling work — if plumbing or HVAC systems need to be changed or walls taken down. His best guess is from $135 on up per hour. Chicago architect Allan J. Grant pegs it at between $90 and $150, depending on the person’s experience, plus reimbursable expenses.

MAKING A HOUSE YOUR HOME

5 Basic Steps to Make a House Your Home

   ^[1]Are you looking to buy your home for the first time? Congratulations! While this is an exciting time, knowing what you are in for can ease the process exponentially. Below are a few steps you can take to find your dream house, and make it into your new home.

Learn About Homeownership
Owning a home requires a large investment of time, money and energy, so make sure you are careful when making your decision to buy. To answer all of the questions you may have, participate in a first-time homebuyer class at a local non-profit agency in your community.

MARKET RECOVERY: 2012

March Pending Home Sales Rise, Market Recovering

  ^[1]Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 4.1 percent to 101.4 in March from an upwardly revised 97.4 in February and is 12.8 percent above March 2011 when it was 89.9. The data reflects contracts but not closings.
The index is now at the highest level since April 2010 when it reached 111.3.

New Rules Aim to Speed up Short Sales

  ^[1](MCT)—The short sale process could get a lot quicker starting this summer under new rules that will require lenders to respond to offers within a month.

Fannie Mae and Freddie Mac, the nation’s two largest mortgage backers, will implement the guidelines on June 15. The changes require mortgage servicers to make a decision within 30 days of receiving a short sale offer. They also must consider requests for pre-approved short sales within that same timeframe.
If the lender needs more than 30 days, it must give borrowers weekly status updates and a decision within 60 days of the initial application.

HELPFUL HINTS: HOW TO CLEAN YOUR GUTTERS

Home Trends: How to Clean and Repair Gutters

  ^[1]Cleaning roof gutters is a small task that can prevent big problems. Every spring and fall, thoroughly cleaning your home’s gutters will keep them working like they should. Leaves can build up and clog the downspouts, which can cause water damage to your roof and fascia (board behind the gutter).

FAQ'S OF REAL ESTATE

Real Estate Q&A: Is 2012 the Year to Buy?

 (MCT)—QUESTION: With the market up and down and with elections on the horizon, my husband and I are unsure about whether we should buy a home. We don’t want to wait too long and have prices go back up. What are your thoughts on buying in 2012?

IMPORTANT INFORMATION ABOUT CANCELLATION OF LOAN DEBT

What You Need to Know about Cancellation of Mortgage Debt

  ^[1]This column is brought to you by the NAR Real Estate Services group.

A lender will, on occasion, forgive some portion of a borrower’s debt. The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower. Some exceptions to this rule are available, but, until recently, the borrower was required to pay tax on the debt forgiven. A new law enacted in December 2007 provides relief to troubled borrowers when some portion of mortgage debt is forgiven. However, this relief expires on December 31, 2012 and NAR will be working to obtain an extension throughout the year.

SUSTAINED MARKET

Housing High Point: Pending Sales of Existing Homes Up to Nearly Two-Year High

Posted By susanne On March 4, 2012 @ 1:06 pm In Consumer News and Advice,Finance and Economy,Home Owner News,Real Estate Information,Real Estate News,Real Estate Trends,Today's Marketplace,Today's Top Story,Today's Top Story - Consumer | No Comments

^[1](MCT)—More Americans are signing contracts to buy existing homes than at any time in nearly two years, boosting the housing industry’s slow recovery, according to the National Association of REALTORS®’ index of pending home sales.
The measure is up 2 percent to 97 in January after slipping 1.9 percent in December. The index of deals for previously owned homes is up 8 percent compared with the 89.8 level from January 2011.
Last month saw the highest point on the index since April 2010, when consumers drawn by a home-buyer tax credit

Loosening Credit Will Help Bring an End to Housing Slowdown

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

IS IT THE RIGHT TIME?

6 tips for selling in today's market

Buying after relocating may not be best financial move

By Dian Hymer, Monday, February 13, 2012.

Inman News®

For-sale-sign image via Shutterstock.com.

Some homeowners have been waiting for years for a better housing market and a good time to sell. Is it better to wait a few more years and see if you can realize a higher sale price, or sell now and move on with your life?
The motivation for selling is a key factor. Are you commuting to work several hours a day and the commute is killing you? Are your children grown and your home is now too big, in addition to being a burden to maintain? Is your home too small? Have you taken a job out of the area? Can you no longer afford to own your home? Or do you no longer want to pay the price it costs to own your home?
These are all good reasons for considering making a move. Not only do current market conditions enter into the equation, but making a move like this is usually more complicated than it was the first time you bought a home.
HOUSE HUNTING TIP: First, you need to find out the probable sale price of your home and access the state of the current home-sale market in your area. You also need to know what you can do to maximize the salability of your home. Then you should consider where you'll live next and how much that will cost.

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If you don't already have one, find an experienced real estate agent who specializes in your area. Friends whose opinion you trust are the best source of agent referrals. Meet with your agent at your home and ask for a comparative market analysis. This will give you information about what homes like yours have been selling for in the current market.
You'll also want to know how long you can expect it to take to sell your home. How many homes like yours have sold recently? Are homes like yours in high demand? Or, is it located in a less desirable area that could mean a longer marketing time and, perhaps, a lower price than you were expecting?
Ask your agent to walk through your home with you and point out what should be done to make your home marketable. Homes that sell today are priced right for the market and are in move-in condition.
You want to make cost-effective improvements. If the kitchen and bathrooms are outdated, consider a cosmetic redo. Update paint, hardware, light fixtures and floor coverings, if necessary. Don't do a complete remodel unless you plan to stay in your home for years; otherwise, you won't recoup your investment.
Deciding where to move -- and when -- can be difficult. Some buyers can afford to buy a new home before selling, and prefer to make the move that way. Most repeat buyers can't afford to buy first. Others who can won't buy first due to market uncertainty and the stress of owning two homes at once.
The most prudent approach to making a move from one home to another is to sell first and rent if necessary until you find the right home to buy. By selling first, you will know exactly how much money you have to apply to a new home. Today's housing market is volatile. A dip in the market could shave tens of thousands of dollars, or more, off your selling price.
The other benefit of renting before buying is that you're under no pressure to buy the first listing you see. Interest rates are low and are expected to stay low through 2012. Prices are also low and aren't expected to move up much for the next several years.
THE CLOSING: This gives you time to find the home that will suit you for the long term.

Winter Fun!

Don’t Hibernate. Decorate!

Posted By susanne On February 12, 2012 @ 1:02 pm In Today's Home Spun Wisdom | No Comments

^[1]Perk up your winter with one of these do-it-yourself projects for easy-to-update surfaces, including interior doors, walls and mirrors.

Could there be an end in sight?

Housing Crisis to End in 2012 as Banks Loosen Credit Standards

By: Krista Franks 01/24/2012

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

©2012 DS News. All Rights Reserved.

WHAT BUYERS ARE LOOKING FOR!

Sellers: Don't overdo it on home improvements

Know which projects are worth the cost, effort
By Dian Hymer
Inman News®

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Homeowners who are thinking about selling this year should be aware of what today's buyers are looking for in a home. It will affect what you should do to get your home ready for sale, and how you should price it.
A survey by the National Association of REALTORS® in 2011 found that buyers favor walkable neighborhoods that are close to shops, restaurants and local businesses over neighborhoods that require more driving between home, work and recreation.
According to the survey, 77 percent of the respondents said they would look for pedestrian-friendly neighborhoods. Improvement in public transportation was favored over building new roads.
Most buyers (80 percent) still prefer to live in a single-family, detached home as long as it doesn't require a longer commute. Although space is important to most buyers, 59 percent said they would accept a smaller home if it cut 20 minutes off the commute time.
Does this mean your chances of selling are slim if you don't have a high Walk Score? No, but proximity to a popular commercial area usually brings a higher price.
In Oakland, Calif., this is evident if you compare homes in the Rockridge area with homes in the Oakland Hills. The housing recession has hit the entire area, but Rockridge prices have dropped less than home prices in the Oakland Hills.
One Rockridge home recently sold for $20,000 more than it did in 2005, and the house had not been substantially changed. From this location you can walk to trendy shops and cafes as well as to BART, the region's rapid transit system. By rail, it's a mere 20 minutes to the financial district in San Francisco.
HOUSE HUNTING TIP: Proper pricing is the key factor affecting the salability of your home in today's market. Make sure you're comparing apple to apples when you evaluate the probable selling price of your home.
The home-sale business is all about location. If you live in a neighborhood where you have to drive to get to work, school or recreation, you can't expect to sell for the same price as a comparable home that's in a desirable, walkable location.
You can't change the location of your home, but you can appeal to today's buyers who are typically looking for a home that is in good condition that they can move right into without doing any major work.
A common refrain heard from sellers is that there's no point in painting or changing worn carpet -- buyers will surely want to do something different. In some cases, this may be so, but many buyers don't have extra cash to pay for extensive home improvements. They may ultimately change the color scheme, but don't make them worry about making the house livable when they buy.
It's a good idea to consult with your real estate agent before you make fix-up improvements. Review your list of preparation-for-sale projects and get your agent's feedback before starting any work.
Sometimes, sellers think projects need to be done that are really not essential in successfully marketing the home. For instance, your yard may be in poor condition, but this doesn't mean that you should have it re-landscaped. This is the kind of improvement you'd do for yourself if you were planning to stay in the house for years. A cosmetic redo will usually suffice.
Get your agent's or stager's input on colors, light fixtures, carpeting, etc., so that you can ensure a positive response to your efforts. Also, watch your costs. You don't need to do a top-of-the-line paint job or use the most expensive granite for your countertops in order to sell. In fact, it will eat into your proceeds from the sale.
THE CLOSING: Stick to cost-effective, tasteful improvements for maximum appeal at a reasonable cost.

WADING THROUGH THE FORECLOSURE MARKET

Homeownership Matters to State of the Union

  ^[1]National Association of REALTORS® President Moe Veissi made the following statement, regarding President Obama’s State of the Union address this week.

“The National Association of REALTORS® commends President Obama for his remarks in support of homeowners and the struggling housing market during tonight’s State of the Union address. As leading advocates for homeownership, REALTORS® know that restoring the health of the housing market is the only way to achieve a broader economic recovery.
“REALTORS® stand ready to help Congress and the administration implement Obama’s proposal to significantly reduce monthly mortgage payments by streamlining the refinancing process.

•  Sales Stir Hope for Housing Market

By ROBBIE WHELAN

Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest level since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.
Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors' chief economist, called the December gain "a good finish to a very tough year."

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Many economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010. Market-watchers attributed this to a minor surge in sales at year-end, driven by historically low mortgage rates, falling prices, active investor-buyers and increasing consumer confidence.
Still, economists cautioned that it's too early to assume that the market is recovering. "These were positive numbers, but that doesn't mean the market is getting better. Lenders have been trying to get rid of distressed homes, and investors been snapping them up," said Patrick Newport, chief economist at IHS Global Insight. According to the Realtors report, investors purchased 21% of all homes in December, up from 19% in November.

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The inventory of homes for sale declined in December to 2.38 million, the equivalent of a 6.2-month supply, assuming the pace of sales remain at December's level. A six-month supply of homes typically is considered healthy, although NAR's numbers don't take into account the "shadow inventory" of homes that are either in foreclosure or on bank balance sheets and not yet listed for sale.
Prices, meanwhile, continue to fall. The median price in December was $164,500, down 2.5% from a year earlier. Prices were down in all regions except the West, where prices rose slightly, compared with a year ago. For all of 2011, the median was $166,100, the lowest since 2002.
"What you really want to see is sales going up, inventories going down, and prices going up, not down," said David Semmens, an economist with Standard Chartered. "People still feel they can hold off buying a house because the recovery won't be that aggressive. It's still very much a buyer's market."
That buyer's market allowed Andrew Gonzales, a 24-year-old police officer in Santa Fe, N.M., to be picky about price when looking for a home for himself and his three-year-old daughter. He closed last month on a $132,000, three-bedroom home in Rio Rancho, a suburb of Albuquerque, after the price was cut twice. Just before closing, the home was appraised for $18,000 higher than the sales price, at $150,000, by a private appraiser.
"I got tired of paying rent, and I'm a single father, so I wanted a home for my daughter," he said. "I was just waiting for the price to come down."
Vision Equity, a company that buys foreclosed homes at auctions in Indianapolis, stepped up the volume of its purchases this winter, buying about 45 homes a month in October, November and December, compared with about 30 homes a month last summer.
"There's a lot of cash investor activity right now," said Steve Olson, a spokesman for Vision Equity. "The chatter at the courthouse was, there's going to be a lot more product coming on the market, and the pricing is going to be good for investors. And we prepared our own investors for that."

 

 

MONTHLY SAVINGS WHILE RENTING/OWNING

Tips on Saving Big on Monthly Expenses  ^[1]The beginning of a new year is the perfect time to resolve to save money. With just a few basic lifestyle changes, renters can save up to $368 per month, or $4,416 per year!

IMPROVING MARKETS INCLUDES 2 IN CT!

Road to Recovery: List of Improving Housing Markets Nearly Doubles in January

  ^[1]The number of housing markets showing measurable improvement nearly doubled in January with the addition of 40 new metros to the National Association of Home Builders/First American Improving Markets Index (IMI).

The IMI now boasts 76 improving markets, up from 41 in December, with 31 states and the District of Columbia represented by at least one entry.
The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. New entrants to the list in January include the following (listed alphabetically by state):

HOUSING 2012

• January 5, 2012, 12:53 PM ET

Five Issues for Housing in 2012

Associated Press

Trying to figure out where the housing market is headed in 2012 offers a strong sense of déjà vu: The market feels just as it did at the beginning of 2011, when many pundits optimistically predicted that housing would finally hit bottom. The housing market didn’t deteriorate in 2011, but it didn’t firm up either amid an economic recovery that struggled to find its footing.
So what does 2012 hold? For one, the story will be local. While many housing markets rose together during the boom and fell together during the bust, they’re exiting the downturn at different speeds, and so it’s not very useful to talk about a “national” housing market.
With that caveat in mind, here’s a look at five key issues that will help determine whether prices stabilize and sales improve in the coming year:
1. Confidence and jobs: The housing market badly needs the economy to add more jobs to stimulate demand for home purchases and to prevent mortgage delinquencies from rising. The good news is that with prices down by 30% from their peak and mortgage rates at their lowest recorded levels, housing is more affordable than it has been in decades. But many would-be buyers are worried about buying today if prices are going to be lower tomorrow. Others don’t want to buy a house until they have more evidence that they’re not going to get laid off or see their hours cut back.
2. Foreclosures: Whether home prices hit a floor this year also relies on how banks manage a huge overhang of foreclosed homes that they haven’t yet taken back and resold. Banks and other mortgage investors own around 440,000 foreclosed properties, but there’s another 3.4 million loans in foreclosure or serious delinquency, according to estimates by Barclays Capital. Because banks are faster to cut prices to unload inventory than are mom-and-pop sellers, home values can fall further as the share of distressed sales rises.
This is one by reason why policymakers at the Federal Reserve and elsewhere are talking about converting some of those foreclosed homes into rental properties. Look for some pilot programs where government entities test the concept in 2012.
3. Rents: Apartment rents are rising as vacancy rates drop to levels that are already lower than the low point in 2006 during the previous economic cycle. If low mortgage rates aren’t enough to give urgency to would-be buyers, rent hikes could accelerate buyers’ decisions to take the plunge.
4. Mortgage credit and rates: Federal policymakers have taken extraordinary steps to keep mortgage rates low and federal-backed entities are responsible for backing nearly nine in 10 new mortgages. But it’s still hard for many buyers to get a loan because banks are demanding lots of documentation of borrowers’ incomes, and appraisals are tanking some deals. When appraisals come in below agreed upon sales prices, sellers must drop prices or buyers must put down more cash. Banks will need to put their legacy-loan problems behind them before there’s much easing in lending standards.
Other wildcards remain on the lending and rates front: will the Federal Reserve initiate another round of buying mortgage-backed securities—a step known to some as “quantitative easing”—to lift the economy? Will continued litigation and demands that banks buy back defaulted loans from mortgage titans Fannie Mae and Freddie Mac lead them to be more stingy with mortgage credit? And will other lenders move in to fill that void? Will the government do more to juice up refinancing programs? Will rates rise as the government attempts to draw back private capital by raising the fees that Fannie and Freddie charge to lenders?
5. Regulation: Many analysts don’t expect Congress to make major changes to Fannie Mae and Freddie Mac during the election year, but several major regulatory changes could significantly reshape the future of the lending landscape in 2012. Dodd-Frank Act lending rules that have yet to be spelled out by regulators will influence how banks price loans that are bundled and sold into securities. Another set of rules will determine how banks must satisfy provisions for them to determine that a borrower has the ability to repay a mortgage.
Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments. This could lead to a broader shakeup in the mortgage industry that ultimately influences how much borrowers are charged for mortgages and how banks handle loans that fall into delinquency.