Posts Tagged ‘housing news’
Who would have guessed?? Mother in Law Suites are Trendy…
I have been hearing real estate agents chatter about homes with Mother-in-Law Rooms or Suites these days. It seems a lot of home buyers are interested in accomodating more than one generation of their family in their home. When I inquired about the trend…this is what I learned.
- Nearly 40 percent of buyers sited financial reasons as the motivation for co-habitation
- A third of the buyers who were looking for an “in law” friendly floorplan cited care issues.
- Only 6 percent said a strong family bond was the reason they were living with family.
InfoTube.net offers some Tips for Buyers and Sellers regarding the “In Law” suite Trend
- Everyone involved in the purchase should talk frankly about sharing rooms, bathrooms and common area’s, such as kitchens and family rooms.
- Sellers with rooms or places to accomodate multi-generational living should definitely highlight and play up that aspect of their home.
- Buyers will be very clear about their needs and are willing to pay for extras. Extra bedrooms, bathrooms or even plumbing roughed in for an extra bath will be important. Luxury ammenities such as separate kitchens, entrances, handicapped accessibility, one level living or a free standing additional building on the property are most sought after.
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Get Down Payment Help
Home buyers who are a little short of cash can receive down payment assistance from their local and Federal government. Many city, county and state programs piggy back on the Federal down payment assistance programs.
For information about the help that is available in your area, search for “down payment assistance programs” and include the name of your region of the country. Also, check the HUD website which is providing a Neighborhood Stabilization Program.
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Pending Home Sales Up Again!!!
Pending home sales were up nearly 4 percent over September levels. More evidence that the housing market hit bottom months ago, October pending sales were a whopping 31.8 percent higher than in October 2008.
Pending sales reflect the number of pre-owned homes that are “under contract” but not yet closed. Since homes are typically “contract pending” for a month or so, closing on these homes should take place in November or December.
Before we Pop Champagne… Keep in mind that tight credit and dubious appraisals are wrecking havoc on closings. But, compared to a year ago, SALES of 6.1 million EXISTING HOMES means sales are up a HUGE 23 percent this year. So CHEERS!!!
If you are in the market for a home, there will never be a better time to buy than now. Home sales are predicted to rise 11 percent in 2010 and 4 percent price increases are expected in most area’s of the country. Another motivating factor for would-be investors and buyers,…it will be very difficult for the Fed to hold interest rates this low going forward.
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Nicolas Cage Loses Homes to Foreclosure
Is it a sign of the economic times, or more like MC Hammer deja vu??
Academy Award winning actor, Nicolas Cage, lost 2 New Orleans homes to a foreclosure sale this week.
More bad news for freespending Cage. He owes more than $6 million in back taxes to the IRS. And, his properties in California and Las Vegas have been foreclosed on and are scheduled for auction this month.
Mr. Cage owed the City of New Orleans $151,730 in back real estate taxes and defaulted on his $5.5 million mortgage debt. His home at 1140 Royal Street in the French Quarter, valued at $3.5 Million, sold for $2.3 million. The other property located at 2523 Pataniya Street, appraised at $3.3 million, sold for only $2.2 million. Pataniya Street is located in the Garden District. Famous neighbors include author Anne Rice and football great Archie Manning, father of Peyton and Eli.
Bad Times or Crazy Spending? Nicolas Cage, a member of the famous Coppola family, is known for being a big spender and news maker. His obsession for Elvis resulted in a one minute marriage to Lisa Marie Presley. He once paid $276,000 for a dinosaur skull. At one time Cage owned 2 islands in the Bahama’s, luxury yachts (plural), a room full of shrunken heads and drove a stable of expensive cars, including a Lamborghini.
Stars may occassionally fall to Earth, Nic won’t stay long. Nicolas Cage and the Coppola family are Hollywood Royalty. His movies have generated over $8 Billion in Box Office Sales. Although Mr. Cage is facing financial ruin because he continued to spend, while millions of dollars drained from his bank accounts, we predict he will crank out more movies and will be back to living the high life in no time. Also, it is rumored that Johnny Depp may come to Nic’s rescue. It seems Depp has a soft spot for Cage, who got him his first roll in Nightmare on Elm Street. Aren’t friends great!!
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Home Buyer Motivation at Highest Level in Years
According to a survey by Move.com, 12.1 percent of homebuyers intend to purchase an investment property this year, compared to only 5.6 percent of buyers polled in April. 
The percentage of investors shopping for property also jumps higher when it comes to foreclosed property. 42 percent of foreclosure buyers are purchasing for an investment. 57.6 percent of foreclosure shoppers plan to live in the home they buy.
The survey also shows that 23.6 percent of investors and buyers believe that home prices are already as low as they will go. Nearly 20 percent feel a sense of urgency when searching for a bargain.
Another factor motivating home buyer’s off the sidelines is the real threat of rising interest rates. Wall Street guru’s, who agree on very little, warn that lending rates will rise in the near future. With real estate prices at their lowest levels, buyers risk much more in waiting to purchase, than they do by locking in record low rates on their loan.
Prediction: We believe the leading indicator of an interest rate hike will be falling unemployment claims. When unemployment claim filings fall below 500,000 per month, a rate hike is likely!
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3 News Stories for Real Estate Lovers
3 Short Real Estate News Items of Interest.
- Good news for US Housing. For those of you still searching for a BOTTOM in the real estate market, we hit it in January 2009. A double bottom, in fact. Take a look at the CHART.
- China raised its minimum down payment requirement to 40 percent, in an effort to slow down the overheated housing market in Hong Kong. Conversely, in the US, we still offer financing with NO Money Down, when the tax rebate is combined with FHA or VA financing. Quite startling in light of the lessons we learned from subprime loans.
- Uncle Sam Added 5 Percent to Home Prices. Government interventions in the housing market have inflated home prices at least 5 percent higher than they would have been. Artifically low interest rates, $8000 tax credits, push for loan modifications and efforts to stall foreclosures may have created a false bottom. Since the props won’t last forever, the risk of price decline in the future is significant.
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Extending Home Buyer Tax Credit. Pro’s and Con’s
Not surprisingly, real estate industry lobbiest are attempting a full court press as they make a final push for extension of the first-time buyer tax credit.
And, it’s little wonder. The IRS estimates that 1.4 million homebuyers have claimed the credit through August, and the Realtors Association estimates the credit was crucial in pushing 355,000 of those buyer’s off the fence.
If the real estate industry gets it’s way and the amendment passes, the $8000 tax credit would be extended to June 30th, 2010 and it would allow more taxpayers to qualify for the subsidy. The amendment would increase the income limit to $150,000 for a single filer and $300,000 for a couple, up from the current limit of 95,000 and $170,000, respectfully.
The Pro’s: Why Vote “Yea”
- Lenders are still in trouble, as more people default or fall behind on their mortgages. Experts predict an additional 1.5 million foreclosures in 2010, increasing supply and further eroding prices and demand.
- Dems and Rep like it. The proposal was introduced by a GA Republican, Johnny Isakson, and it is also supported by Democratic heavy-weights. House speaker Nancy Pelosi and Senate Majority Leader Harry Reid support the extension, President Obama hasn’t taken a position for either side.
- Still too Many Houses. Although the supply of existing homes on the market has fallen from 1-5 months down to 8.5 months, a healthy market has only 5-6 months supply of house.
- Unemployment is Rising. With national unemployment levels at 10 percent, and some states reporting a far higher number, extending the taxpayer subsidy of housing market would likely create and preserve jobs. In addition, people out of work usually means more loan deliquency, foreclosures and further downward pressure on pricing.
The Con’s: Why Vote “NAY”
- The Cost to the Taxpayers. The extension comes with a heavy price tag of $16.7 BILLION over 5 years.
- As bad as Sub-Prime. Opponents argue that the subsidy has artifically propped up the prices of inexpensive homes, targeted by first-time buyer’s, thereby creating another potential mini-bubble in affordable housing.
- Both Opponents and real estate industry admit that most people who claimed the $8000 deduction, would have purchased a home anyway due to historical low rates and steep price declines.
- Fraud. The IRS has identified over 100,000 cases of fraud involving the tax credit. On Thursday, the House Ways and Means Committee is scheduled to take a closer look.
- Did we mention the cost to taxpayers is $16.7 BILLION?
Yea or Nay??? We thank you for visiting InfoTube.net FREE homes for sale and rent website. The website provides free legal forms and contracts, marketing and sales tools, real estate advice, news and updates for buyer’s, sellers, agents and builders. We invite you to subscribe to our feed or leave a comment in the space below.
Foreclosures Up. Home Prices Predicted to Fall Further
In August, InfoTube warned its readers about the New Wave of Foreclosures that would be pounding the market, further driving up inventory and eroding prices. Today, we learn that the Wall Street Journal agree’s with our accessment of the future market conditions for real estate.
Excerpt from the Wall Street Journal:
“The size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market . . . Analysts who track the shadow market have focused primarily on the gap between the number of seriously delinquent loans and the number of foreclosed homes for sale by mortgage companies. A loan is considered seriously delinquent, which typically means it is headed to foreclosure, if it is 90 days or more past due.
As of July, mortgage companies hadn’t begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn’t yet acquired the property. The figures don’t include home-equity loans and other second mortgages.
Moreover, there were 217,000 loans in July where the borrower hadn’t made a payment in at least a year but the lender hadn’t begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren’t in foreclosure, up from 8% a year earlier.”
What this means for Home Seller’s: Time is not your friend. The shadow of inventory of distressed property will continue to place downward pressure on home prices. Based upon our years of experience, we predict that home prices will fall an average of 7 percent in 2010.
If you need to sell your home, DO NOT chase the market down. Price your property aggressively, then market the home to as wide an audience as possible. To learn about the best way to reach the mass buying market, CLICK HERE.
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Trends in Housing Have Changed, Permanently
It seems everyone these days is looking for a bottom in the housing market, or a sign of normalcy, as we’ve known it. The truth may be that housing will never return to what normal has been in the past. The reason isn’t the just the economy or tighter lending standards, it’s may be simple demographics.
Please consider why trends in housing may have changed, Permanently.
- Baby Boomers: The baby boomers (born 1946-1964) are the largest and spendiest generation in American history, and their 40 year shopping spree is coming to an end.
- McMansion Glut: Boomers are buying fewer single family homes and they are getting rid of the suburban McMansions they purchased when their children lived at home. Evidence already shows that boomers favor 2 and 3 bedroom condo’s over 4 or 5 bedroom houses. The Boomer trend to a smaller house, combined with fears of gas prices and long commutes, mean that the big house in the burbs is not the ideal dream house or location that is has been in the past.
- Baby Boomers, Again: Boomers are reorganizing their finances. After the stock market crash, and with retirement approaching, fewer boomers will be purchasing vacation and second homes.
- Generation X: The generation born between 1965-1976 will be unlikely to bid up home prices. First, there are only 44 million X’ers compared to 76 million boomers. Secondly, they are not as wealthy as their parents, and they are deeper in debt, due in part to college loans.
- Migration Back to City Life: Due to our aging population, smaller family size and energy costs, people are returning to urban area’s that have not been overbuilt and offer quality of lifestyle.
- Permanent Changes: The days of buying a huge home on a big lot, and paying for it with a 2 hour commute, may be ending. This trend could mean that owners in McMansion communities, with little to no public transportation, will havetrouble finding buyers. Some people predict that the large, single family homes, located miles from urban centers, will be subdivided into inexpensive housing for low and moderate income families, as the car lovers who moved to the burbs return back to the convenience of city life.
One thing that is certain is that change happens. As environmental, economic, political and cultural forces change the way we live, our view of residential home investing will change, too.
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June 2009 New Home Sales Info and Charts.
Click Here to see the latest news on new home sales. The easy to read charts, with comments, give instant insight to the housing market.
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Home Prices Drop, Again. Predict Further Declines.
Foreclosures UP. Unemployment UP. U.S. home prices DOWN.
Home prices in the United States dropped another 6.8 percent in April from the same period only one year earlier. The housing crash has now erased 26 percent of the equity in the median priced home, since the peak in July 2006. The silver lining for renters is that home affordability is at near record levels.
Economists predict that the market will continue to see more home price declines, despite $8000 tax incentives and $275 billon in funding to keep some owner’s in their homes.
Analysts at Deutsche Bank said US home prices may fall another 14 percent before they stabilize. Like sentiment was expressed by Robert Shiller, who co-founded the respected S&P Case-Shiller Home Price Index. Many predict the worse declines could be even worse in New York and Orange County, CA.
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Housing Tidbits from President of the NAR
Charles McMillan, president of the National Association of Realtors, spoke in Ft. Worth, TX and reported to attendee’s that ”The dream of homeownership is alive and well in the US.”
Mr. McMillan began his real estate career in Ft. Worth, TX in 1983, one year after the Texas real estate market crashed in 1982. Although McMillan did not address it, Texas home prices have not recovered to pre-1982 levels over the past 27 years.
Highlights from the speech include:
- Consumers will buy houses if two conditions are met. The home and financing costs must be at a bargain, basement price levels.
- Keeping interest rates low and stable are necessary to stabilize the housing market.
- The tax credit is working. 43 percent of all property sales have been first-time buyers.
- Thanks to distressed property price declines of up to 52 percent, sales of existing home inventory has increased in CA, NV, AZ and FL.
- The two biggest issues facing the real estate industry going forward are appraisal issues and healthcare. Half of all real estate agents have no insurance.
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Is it Safe to Buy from Bankrupt Builder?
Dear InfoTube: My husband and I are considering the purchase of a townhome. We found a great unit, much larger than most for the money, but the builder has filed for bankruptcy. Also, the development is not entirely finished and it has a lot of unsold units.
We would like to take advantage of the $8000 tax credit and low interest rates, so we are in a hurry. Should we buy this unit? Your thoughts and expertise would be a big help.
Dear First Time Buyer: You don’t say where you live, but bankrupt builders are common in this market. The fact that the builder is insolvent doesn’t mean that the construction was sub-standard. But, it does mean you won’t have the builder backing up his work. Keep in mind that all warranties for appliances, roofing, flooring, etc. are backed by the manufacturer, not the builder, anyway, then make sure you have a very good home inspection before moving forward.
The issue of the unsold and unfinished development should probably be of more concern to you than construction or inspection problems. There are issues that you need to discuss before considering buying into a paritally vacant, multi-family development.
- How much do you want to live through?? Since the development is unfinished, it could take years before the project is completed. And, you will have to tolerate construction noise and dirt while the work is done.
- How long do you plan to live there? You need to be aware that prices may drop subtantially on the completed unsold units before everything is said and done. This means that you may lose your equity and owe more than the people who buy later for less money. Also, when the remaining new buildings are finished, you will face a lot of competition from new or newer units than the one you own. If you decide to buy here, make sure you can stay until everything is complete and the market has stabilized.
- What about the Homeowners Association? Unsold and vacant units mean that the association will need to cover their expenses. If the development is large and has ammenities such as pools, tennis courts, greenbelt area’s, etc. you may have only a few owners splitting the costs of insurance, maintenance and upkeep. This situation can dramatically raise dues beyond what most people are willing to pay. Verify the financial situation of the HOA and make sure you understand the by-laws before jumping into a situation with no real ceiling on future expenses.
I would offer you one piece of advise for any property you are considering, never buy a home because of tax incentives. Although the $8000 credit is very enticing, make sure you buy a home that is located in a good neighborhood and suits your families needs. Low interest rates, and the tax credit are strong motivators, but make sure you are buying the right home, in the right spot and at the right price.
Thank you for writing to InfoTube.net homes for sale and lease website. I hope I have answered some of your concerns and if you need more information, please let me know.
Sellers Should Lower Price Expectations
In light of a new wave of foreclosures and distressed property sales, home seller’s may need to lower their expectations about home asking prices.
Recent reports find that nearly one in every four current home sellers (not seller’s of bank owned property) have dropped asking prices an average of 10.6 percent from their original listing price. In dollar terms, that is equal to another $27.4 BILLION, yes BILLION, slash in the equity of US homes. Ouch!
The good news for home seller’s is that higher interest rates and a rapidly approaching deadline for an $8000 tax credit is creating urgency among buyers. A recent uptick in sales proves that homes priced aggressively are selling very fast. But, homes priced above the competition continue to sit and languish on the market for months on end. Simply put, there is great demand in the market now…at the right price. Seller’s may need to sharpen their pencils, but buyers are actively purchasing homes.
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Bullish Signs for Housing Sales
Although all the news about real estate, housing and lending isn’t particularily bullish, there are some compelling new motivations for buying now. Rising interest rates, Inventory Decreases and the $8000 tax credit which expires December 1.
- Interest rates are soaring, as the dollar falls. Economists predict that the low rates we saw only a month ago, aren’t likely to return anytime soon. In April, 30 year fixed rate mortgages averaged 4.5 percent. Last week, rates hit 4.98 percent. And, this week, Bankrate.com is quoting 30 year fixed rates for prime borrowers at just over 5 percent. Note: An increase of only 1/2 percent in interest rates raises the mortgage payment for a $170,000 loan by $52/month, $624/year or $18,720/over the life of the loan.
- The deadline for qualifying for an $8000 tax credit is rapidly approaching. Although, the December 1st deadline may seem a long way off, in real estate terms it really isn’t. A lot of people are sitting on the sidelines, waiting to see if prices will drop another 1 or 2 percent over the next 6 months. Lenders are already warning us that when all those buyers rush into the market in August or September, the backlog in loan applications will mean a wait of 60-90 days to close an average loan. Note: Given that the average buyer in this market looks at over 30 homes, over a 3 month period, buyers who don’t want to miss the boat on their $8000 gift, should get serious now.
For those buyer’s hoping to time the market perfectly, we think their ship may be sailing by. Home inventories are dropping, prices are stabilizing, interest rate increases erase potential gains made by a further fall in prices and $8 grand is on the line, if the December 1 closing deadline can’t be met. Serious buyer’s should jump on board now, before they find out that the ship has sailed and they missed the boat!!
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