Housing Market Shows ‘Sustainable’ Improvement.

Housing Market Shows ‘Sustainable’ Improvement

Housing Market and prices are ticking up, despite a sluggish economy. In fact, the rebound has economists predicting that housing will likely add to economic growth this year for the first time in seven years.

Existing Housing Market sales increased 2.3 percent in July and are up more than 10 percent compared to year-ago levels, the National Association of REALTORS® reported last week. What’s more, home prices soared 9.4 percent in July compared to last year at that time—to $187,300—marking the largest price gain in six-and-a-half years.

New-home sales also have been inching up, rising 3.6 percent in July and up more than 25 percent compared to last July, the Commerce Department recently reported.

The “evidence that the Housing Market is recovering…is fairly clear across a wide range of reports,” John Ryding, an economist at RDQ Economics, told the Associated Press. “[Housing] is now becoming a small positive for the economic outlook.”

Economists say the rebounds appear to be sustainable and will likely climb even higher, particularly with modest economic growth, future job gains, ultra low mortgage rates, and housing affordability hovering near record highs.

Source: “Rise in U.S. Home Sales Reflects Steady Improvement,” The Associated Press (Aug. 23, 2012)

First time Home Buyers, Where are they?

First time Home Buyers, Where are they?

Fewer first time home buyers are jumping into the housing market nowadays, accounting for 34 percent of all buyers in July. While that percentage has inched up slightly as of late, it still remains far from the 40 percent levels first-time home buyers generally account for in the housing market, according to the National Association of REALTORS®.

With ultra low mortgage rates and high housing affordability, first time home buyers may never have a better time to jump into the housing market. But several factors are keeping them on the sidelines.

One of the biggest obstacles? Saving for the down payment, according to recent home buyer surveys. The second-biggest hurdle cited was poor credit history, which was making it difficult for first-timers to qualify for a mortgage. A high unemployment rate among younger adults — who often make up the biggest group of first-timers — is also holding many back. Also, first time home buyers, who need financing for their home purchase, are increasingly losing out to investors who are willing to pay entirely in cash.

Housing experts say that first time home buyers are a critical component for a sustainable housing recovery.

“First time home buyers are vital to boosting sales, especially during downturns, since when they buy a home, they aren’t also selling a previous home to finance the purchase,” according to MarketWatch.

Source: “Fewer Home Buyers Are First-Timers,” MarketWatch (Aug. 22, 2012)

Short Sales to Get Faster With Fannie, Freddie.

Short Sales to Get Faster With Fannie, Freddie.

The Federal Housing Finance Agency announced Tuesday that it is issuing new guidelines that set out to more quickly qualify borrowers and speed up the short sales process.

Among the new guidelines, home owners with a mortgage backed by Fannie Mae or Freddie Mac will be able to sell their home in a short sale even if they are current on their mortgage, assuming they can prove a hardship. Eligible hardships often include death of a borrower or co-borrower, divorce, disability, or job relocation (such as a job transfer or new employment 50 miles away from their current home).

The new FHFA guidelines also permit mortgage servicers to speed up the processing of short sales for borrowers with eligible hardships without needing additional approval from Fannie Mae or Freddie Mac.

“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” FHFA Acting Director Edward J. DeMarco said in a public statement.

Also among the new guidelines:

— Military service members who are being relocated will automatically be eligible for short sales, even if they are current on their mortgages.

— Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments for borrowers who short sale who have sufficient income or assets and can make a financial contribution or sign a promissory note.

— Freddie Mac and Fannie Mae will offer up to $6,000 to second lien holders in order to quicken the pace of a short sale. “Previously, second lien holders could slow down the short sale process by negotiating for higher amounts,” according to the FHFA.

The new short sales guidelines will go into effect Nov. 1.

The National Association of REALTORS® worked with the FHFA and the government-sponsored enterprises in creating the new short sales guidelines. NAR applauded the FHFA’s approval of the guidelines.

“REALTORS® appreciate the FHFA’s efforts to increase the number of short sale approvals, which limit the losses incurred by home owners, lenders, the federal government and taxpayers,” says Moe Veissi, NAR president. “We hope these new guidelines will allow many more hardworking American home owners that would have previously been denied a short sale to now be approved and avoid defaulting on their mortgage loan.”

For more information on the new guidelines, visit www.realtor.org/topics/short-sales.

Source: Federal Housing Finance Agency and the National Association of REALTORS®

Real Estate Investors Top 8 College Towns.

Real Estate Investors Top 8 College Towns

Real Estate Investors increasingly are eyeing college towns to snag properties at discounts and turn them into rental properties that could potentially offer steady cash flow with student tenants. But which college towns offer some of the best returns?

Realtor.com recently released its second annual list of the best college towns for Real Estate Investors, factoring in average monthly rental prices and comparing it to estimated mortgage payments of a median priced home.

The following are the top eight college towns for Real Estate Investors, according to this year’s report.

1. Boston

Median list price: $334,900

Average rent: $3,084

Mortgage payment estimate: $1,240

2. Princeton, N.J.

Median list price: $265,000

Average rent: $2,056

Mortgage payment estimate: $980

3. Chicago

Median list price: $194,000

Average rent: $1,630

Mortgage payment estimate: $720

4. Washington, D.C.

Median list price: $395,000

Average rent: $2,637

Mortgage payment estimate: $1,460

5. Houston

Median list price: $183,000

Average rent: $1,134

Mortgage payment estimate: $680

6. Philadelphia

Median list price: $234,900

Average rent: $1,475

Mortgage payment estimate: $870

7. Atlanta

Median list price: $174,900

Average rent: $1,187

Mortgage payment estimate: $650

8. Pittsburgh

Median list price: $140,000

Average rent: $1,122

Mortgage payment estimate: $520

Source: Realtor.com

Customer Satisfaction With Real Estate Companies Falling?

Customer Satisfaction With Real Estate Companies Falling?

A new J.D. Power and Associates study suggests that customer satisfaction with real estate companies is falling among home buyers and sellers. In fact, the study—in its fifth year—suggests that home buyer satisfaction with real estate companies, in particular, is at its lowest level recorded. Seller satisfaction is also down this year, according to the 2012 Home Buyer/Seller Satisfaction Study of more than 2,700 home buyers and sellers.

The study measures customer satisfaction with the largest real estate companies, factoring in views over the salesperson, office, and service.

So what’s gotten customers so unhappy lately? Some real estate companies may be taking the blame from sellers and buyers for the reality of the real estate market, in which qualifying for a loan is tougher, home values have fallen the last few years, and low inventories of for-sale homes are making the choices sometimes slim for buyers.

“Although home buyers and sellers are aware of continuing challenges in the real estate market, a key reason customer satisfaction is down is that customer expectations are not being met, either in terms of sellers having to compromise on their listing price, or for buyers who are compromising on the home’s condition and size,” says Christina Cooley, spokesperson at J.D. Power and Associates. “This is understandably frustrating all around. However, we also find that real estate companies that set themselves apart in terms of working closely with their customers and meeting their needs may plan an important role in both managing expectations, but more importantly, exceeding them.”

Not surprisingly, the study found that sellers tend to be most satisfied with real estate companies that were able to get them the greatest proportion of the list price when selling. According to the study, sellers reported receiving 89 percent of their list price.

Cooley says that high-performing companies also tend to make more effort to put customers’ at ease by taking the time to educate them about the realities of the market, such as by using comparable sales information, and by following up with them after closing thus creating more customer satisfaction.

Source: J.D. Power and Associates

REALTOR ® vs. FSBOs

Survey Reveals Success of REALTORS® vs. FSBOs

Survey Reveals Success of REALTOR ® vs. FSBOs

Home sellers are more than twice as likely to get their homes sold if they use a REALTOR ®, rather than trying to sell their home on their own, according to a new survey conducted by HomeGain of 400 home owners nationwide from July 31 to Aug. 10.

Seventy-three percent of the home owners surveyed said they used a REALTOR ®. On the other hand, 21 percent of those surveyed said they tried to sell their home themselves.

The survey found that 66 percent of the home owners who used a REALTOR ® were able to successfully sell their home compared to 30 percent of for-sale-by-owners.

What’s more, the survey found that 22 percent of the for-sale-by-owners eventually decided to use a REALTOR ® to try to sell their home. More than half of those who did were then able to sell their homes too, the survey found.

“The value of a REALTOR ® in a real estate transaction is made strikingly apparent in our 2012 FSBO verses REALTOR® survey of home sellers,” says Louis Cammarosano, general manager of HomeGain. “A qualified REALTOR® understands the dynamics of the market and can better assist home sellers in the pricing and preparation of their homes for sale.”

Source: HomeGain

Housing Permits at 4-Year High, Builders Still Cautious.

Housing Permits at 4-Year High, Builders Still Cautious

Housing permits — a future gauge for home building — reached its highest level since August 2008, rising 6.8 percent in July over the previous month, the U.S. Census Bureau reports. What’s more, Housing permits are up nearly 30 percent over year ago levels.

Still, companies are being cautious about overbuilding.

“While many builders believe that the outlook for housing is considerably brighter than it has been in years, we are being very careful about keeping inventories tight and not building ahead of demand,” says Barry Rutenberg, chairman of the National Association of Home Builders. “At the same time, builders are drawing more permits for new construction so we can accommodate buyers and renters as they return to the marketplace.”

Single-family housing permits in July posted their best pace since March 2010, rising 4.5 percent last month. Meanwhile, the at-times volatile multifamily market saw permits rise 11.2 percent in July.

While housing permits offered continued hope for a recovery in the home building industry, housing starts did fall slightly in July, dropping 1.1 percent compared to June, the Census reports. Last month, single-family housing starts dropped 6.5 percent. On the other hand, multifamily starts posted their strongest gain since February, rising 12.3 percent last month, the Census Bureau reports.

Source: The National Association of Home Builders