Buying Is a Good Investment, If You Choose Right

Pessimists are implying that the housing market will never get any better and housing will always be a lousy investment.

Are they right? Of course not, say experts at the Motley Fool finance Web site.

In fact, the Fools predict that pretty soon housing will be a great investment because prices will have fallen to the point where homes are cheap.

Then as now, the Fools say the key to buying a home that is a good deal will be:

• Location
• Don’t overpay
• Buy what you can afford

If the price goes up, great, the Fools say. If not, buyers will be OK because they have picked a great place to live.

Source: The Motley Fool (08/23/2010)

Real Estate Titan Dies at 88

Manhattan real estate mogul Paul Milstein died Monday at 88. His empire included 50,000 apartments, 8,000 hotel rooms and 20 million square feet of office space, the New York Times reported.

Many of Milstein’s projects anchored the refurbishment of marginal neighborhoods, including turning around Times Square — an effort that some called “courageous.”

His philanthropy, much of it done with his late brother Seymour, was significant. It included the Milstein Hall of Ocean Life (“The Whale Room”) at the American Museum of Natural History; the building housing the architecture department at Cornell; an endowed professorship at Columbia; and the terrace and pool at Lincoln Center. His medical philanthropy included the Milstein Hospital Building of New York Presbyterian Hospital/Columbia University Medical Center.

Source: The New York Times, Douglas Martin (08/09/2010)

Curious To Know What Home Prices are Doing?

Here is what home prices are doing in your Neck of the woods. For an estimate on your home, call your REALTOR Today...

• Northeast: Regionally, the median existing single-family home price in the Northeast declined 3.2 percent to $238,000 in the second quarter from a year earlier. Existing-home sales in the Northeast jumped 14.9 percent in the second quarter to a level of 980,000 and are 23.6 percent above the second quarter of 2009.
• Midwest: In the Midwest, the median existing single-family home price increased 1.4 percent to $148,500 in the second quarter from the second quarter of last year. Existing-home sales in the Midwest rose 14.5 percent in the second quarter to a pace of 1.30 million and are 20.9 percent above the same period in 2009.
• South: In the South, the median existing single-family home price slipped 2.0 percent to $155,500 in the second quarter from the second quarter of 2009. Existing-home sales in the South increased 10.9 percent in the second quarter to an annual rate of 2.10 million and are 18.8 percent above a year ago.
• West: The median existing single-family home price in the West rose 2.6 percent to $219,700 in the second quarter from a year ago. Existing-home sales in the West fell 2.6 percent in the second quarter to an annual rate of 1.23 million but are 7.6 percent higher than the second quarter of 2009.

-NAR

Five Surprising Reasons to Buy a Home Now

Five good reasons why now is a great time to buy a house:

1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they can absorb a few ups and downs as the still-recovering housing market gains traction.
2. Houses are in move-in condition. Home owners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. As these houses enter the market, they are in marked contrast to tattered foreclosures.
3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system, and they are being replaced by some very attractive properties.
4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market.
5. Plenty of programs. Many programs that encourage middle-class families to buy homes continue to exist, despite market downturns. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.

Source: ForSaleByOwner.com (07/29/2010)

Mortgage Rates Fall Under 4.5 % (The Lowest Ever)

Freddie Mac reports that long-term mortgage rates moved south again this week.

Interest on 30-year fixed loans hit a new low of 4.49 percent, compared to 4.54 percent last week and 5.22 percent a year ago; and the 15-year mortgage landed at 3.95 percent, down from 4 percent last week and 4.63 percent a year ago.

Five-year adjustable-rate mortgages reached a new low of 3.63 percent, down from 3.76 percent last week and 4.73 percent a year ago; while one-year ARMs fell to 3.55 percent from 3.64 percent last week and 4.78 percent a year ago.

Source: The Wall Street Journal, Amy Hoak and Nick Timiraos (08/06/10)

20-Year Mortgages Cut Interest Significantly

Buyers with the ability to stretch a little might consider a 20-year fixed-rate mortgage instead of the traditional 30-year, suggests CBS Money Matters’ financial adviser Ray Martin.

Martin points out that a $200,000 mortgage with a 30-year term and an interest rate of 4.75 would have a monthly payment of $1,043 and the total interest over the life of the loan would be $175,600.

The same mortgage with a 20-year term at 4.5 percent would have a monthly payment of $1,265 with total interest over the life of the mortgage of $103,670.

Young home buyers planning to have children will have their 20-year mortgage paid off by the time their kids enter college, a big financial advantage, Martin points out.

Source: CBS, Ray Martin (08/04/2010)

10 Steps to Win Over Sellers

Finding the home of your dream isn't always easy, Here are 10 tips for making sure sellers won’t turn up their nose at your offer:

1. Make sure the you are pre-approved for a mortgage (not to be confused with being pre-qualified) so you can close in about 30 days.

2. Study your market. Have you made an offer on another home or are you working against any other kind of deadline?

3. Make a clean offer – no requests for help with closing costs or other contingencies.

4. Include an automatic escalation clause – say $500 over the highest competing bid. (Insist that seller show the offers in writing.)

5. Sweeten the offer with a bonus if the deal gets done quickly.

6. Offer between 1 - 10 percent of the purchase price in earnest money.

7. Waive the appraisal. You will have to be willing to pay any difference between the selling price and what the bank is willing to lend.

8. Consider waiving the inspection.

9. Offer the full list price, preferably in cash.

10. Write a love letter to the sellers, telling them all the things you love about their home.

Source: MSN Real Estate, Marilyn Lewis (08/03/2010)

Understanding the mindset of a home buyer

August 2nd, 2010 @ 6:00am

By Paul Nelson

SALT LAKE CITY -- While home values have dropped along the Wasatch Front, those trying to sell their homes need any advantage they can use to get their full asking price.

Some real estate agents say it pays to understand the mindset of a potential home buyer.

It's natural for someone to become emotionally attached to a house, especially if they've lived there a long time. A seller could tell plenty of stories about how they've made happy memories living at that home.

But as cold hearted as it sounds, it may be best to leave emotion out of it. Real estate agents say a home buyer is interested in getting the best value for the lowest price. Emotion has no part of it.

"I think most buyers in this marketplace right now, they want a home that they can move right into that they're not going to have to do a lot of upgrading," says Realtor Jallinda Bowers.

Another tip: use a professional, even when you can do it yourself. If you were buying a home, which would you rather hear from the seller: "I painted this room," or "We had this room professionally painted?"

Bowers says if you're like most buyers, the second phrase will sound better. So, if you need to make repairs on your home to make it ready to sell, you should hire someone else.

"Most of the buyers will ask, if there are things that need to be repaired, they'll ask that a professional do it," Bowers says.

Something else to keep in mind is that not all out-of-state buyers are the same. If you're selling a home to someone moving in from out of state, there is a difference between what people from the West Coast may be expecting compared someone from the East Coast.

Bowers says Californians are used to paying more money for smaller homes. But the same isn't true for East Coasters.

"A lot of the back-east clients that come in here are used to paying less for more square footage and acreage," she says.

There is one big upside to selling to someone from out of state. In a recent smartmoney.com article, researchers from BYU were reported as saying people who have just moved into the state may be in more of a rush to buy. That way, they can avoid paying more in travel costs.

Rents Rise as Apartment Vacancies Fall

Rents Rise as Apartment Vacancies Fall

Apartment vacancies were down and rents were up last month as people got tired of living in their parents’ basements and rented a place of their own.

Nationally, the apartment vacancy rate was 7.8 percent at the end of June, according to research firm Reis Inc., down from 8 percent in the first quarter.

Rents rose 0.7 percent from April to June, the largest quarterly gain in two years.

The advantage hasn’t returned "completely back to owners right now," says Hessam Nadji, managing director at real estate firm Marcus & Millichap. "But we're well under way to see that balance shift back."

Source: The Wall Street Journal, Nick Timiraos (07/08/2010)

Mortgage Rates Hit Another Record Low

Mortgage Rates Hit Another Record Low

The average interest on a 30-year fixed mortgage dipped to a new record low of 4.57 percent this week — down from 4.58 percent a week ago, according to Freddie Mac, which began tracking rates in 1971.

But the rates may not last long, call your lender and your local Realtor to learn how these low rates may help you.

Source: Indianapolis Star (07/09/10)

Life in Suburbia Gains Credibility

Life in Suburbia Gains Credibility

Life in suburbia is beginning to get some respect.

Hofstra University on Long Island, home to Levittown, the original suburb, runs the National Center for Suburban Studies, aimed at advancing public consideration of suburban living.

Additionally, Johnson County, Kan., is planning a National Museum of Suburban History. Officials behind the effort say that with 50 percent of Americans living in suburbia, it is time to take it seriously.

Robert Lang, a University Nevada-Las Vegas sociology professor who studies suburban life, says, "The United States is the first suburban nation. In the end, these are the places ... where we are going to live, no matter what."

Source: Associated Press, Alan Scher Zagier (07/05/2010)

6 Reasons to Reduce Your Home Price

6 Reasons to Reduce Your Home Price

By: G. M. Filisko

Published 2010-03-19 13:10:49

While you’d like to get the best price for your home, consider our six reasons to reduce your home price.

Home not selling? That could happen for a number of reasons you can’t control, like a unique home layout or having one of the few homes in the neighborhood without a garage. There is one factor you can control: your home price.

These six signs may be telling you it’s time to lower your price.

1. You’re drawing few lookers

You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.

2. You’re drawing lots of lookers but have no offers

If you’ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.

3. Your home’s been on the market longer than similar homes

Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you’re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there’s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.

4. You have a deadline

If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend.

5. You can’t make upgrades

Maybe you’re plum out of cash and don’t have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn’t as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others.

6. The competition has changed

If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what’s still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction.

Provo #2 Of The Top 10 Mid-sized Markets for the Good Life

Top 10 Mid-sized Markets for the Good Life

Business Web site Portfolio.com has identified what it considers the best mid-sized markets.

The study compared 109 communities with populations between 250,000 and 750,000 in 20 categories, including healthy economies, moderate costs of living, light traffic, pleasant neighborhoods, and good schools.

Portfolio.com’s Editor J. Jennings Moss said, "This companion study of best mid-sized places to live can serve as a resource for those who are trying to start a business in new territories by identifying the categories that define the best qualities of living.”

These were the top-10 mid-sized metros with the best quality of life:

1. Boulder, Colo.
2. Provo, Utah
3. Fort Collins, Colo.
4. Madison, Wis.
5. Ogden, Utah
6. Holland, Mich.
7. Colorado Springs, Colo.
8. Ann Arbor, Mich.
9. Des Moines, Iowa
10. Manchester, N.H.

Source: Portfolio.com (06/30/2010)

Three Things Condo Buyers Should Know

Three Things Condo Buyers Should Know

Now could be a great time for home buyers to find a great deal on a condominium.

Here are three things that potential buyers of condos should consider:

1. Is this condo likely to fall further in price? Part of the answer is in falling or rising local inventory – even if sales have picked up recently.

2. Is this a fair price? Condo prices are more volatile than single-family homes. One big consideration is whether buyers in this particular complex are likely to be able to qualify for a mortgage. If the complex has too many renters, for instance, the Federal Housing Administration won’t approve loans to buy units.

3. Is the condo association in good fiscal shape? Are they maintaining the grounds and the amenities as well as staying on top of needed structural improvements?

Source: Money Magazine, Beth Braverman (06/29/2010)

Mortgage Rates Hit an All-Time Low

Mortgage Rates Hit an All-Time Low

Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this week, down from 4.75 percent a week ago, reports Freddie Mac.

Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.

Source: Washington Post, Dina ElBoghdady (06/25/10)

Fed: Interest Rates to Stay at Record Low Levels

Fed: Interest Rates to Stay at Record Low Levels

In the wake of a slowing real estate market, the Federal Reserve said Wednesday that the economy is “proceeding” and pledged to hold interest rates at record low, near zero rates.

One piece of good news, released simultaneously with the Fed’s report, was a survey of CEOs of large U.S. companies, 39 percent of whom said they expect to increase the number of people on their payrolls in the second half of 2010.

Source: Associated Press, Alan Zibel (06/23/2010)

Is a Housing Shortage Coming? Could We Be Moving Towards a Sellers Market?

Some experts are saying that the next big real estate problem could be a shortage of homes.

Only 672,000 new homes were started in April. That’s less than half the number needed to meet the country’s average population growth.

In the past, an average of more than 1.3 million households have been built each year, creating demand for 1.5 million new homes. In 2009, only 398,000 new households were formed, according to the Census Bureau.

"The decline in household formation is artificial," says James Gaines, a real estate economist with Texas A&M. "The young are moving in with their parents. There's even doubling up among working-class people. There's a pent-up demand coming if and when the economy recovers."

Some economists believe this analysis fails to take into account the changing economy or the large inventory of vacant properties. But Gaines and others say these factors are unlikely to significantly drive down demand.

Source: CNNMoney.com, Les Christie (06/15/2010)

The Must-Haves In a Home for Men and Women

It’s true. Men aren’t looking for exactly the same things women are when they go home shopping.

ZipRealty surveyed 1,000 home shoppers and concluded that while about an equal number of men and women sought green features – about 27 percent – and 35 percent of both sexes put a high priority on a home office, there is disparity in the desire for other features.

Both sexes did agree on the biggest turn-offs: structural damage, bad odors, a busy street, and an awkward floor plan.

Here are the top 10 features most desired by men:
1. Garage or designated parking space, 85.5 percent
2. Master suite, 79.8 percent
3. Ample storage space, 71.2 percent
4. Guest bedroom, 70.2 percent
5. Large closets, 64.2 percent
6. Outdoor entertainment area, 63.4 percent
7. Gourmet or updated kitchen, 59.1 percent
8. Breakfast room or eat-in kitchen, 55.2 percent
9. View, 44.5 percent
10. Large yard, 43 percent

Here are the top 10 features most desired by women:
1. Garage or designated parking, 87.7 percent
2. Master suite, 77.8 percent
3. Ample storage space, 72.7 percent
4. Large closets, 68.7 percent
5. Outdoor entertainment area, 64.2 percent
6. Guest bedroom, 63.9 percent
7. Gourmet or updated kitchen, 61.8 percent
8. Breakfast room or eat-in kitchen, 56.1 percent
9. Large yard, 43 percent
10. Wood floors, 40.9 percent

Source: ZipRealty.com (06/10/2010)

Fewer Borrowers Fail to Pay Their Mortgages

Fewer Borrowers Fail to Pay Their Mortgages

The number of U.S. borrowers failing to pay their mortgages has fallen significantly in the last few months, according to RBS Securities Inc.

Of borrowers with subprime loans wrapped into bonds issued in 2007 who had never previously missed a payment, an average of 2.6 percent failed to pay at least once in March, April or May. That’s a drop from 3.7 percent in February and a 15 percent decline after seasonal adjustments, RBS calculates.

“We believe that the last few months’ performance points to a fundamentally positive shift in borrower behavior,” Paul Jablansky, Desmond Macauley, and Ying Wang, analysts at the Royal Bank of Scotland, wrote in a June 8 report.

Source: Bloomberg, Jody Shenn (06/10/2010)

Survey: Economists Forecast Growth

Survey: Economists Forecast Growth

Economists surveyed by The Wall Street Journal forecast slow but steady economic growth through the middle of 2011.

The key to economic growth will be increased employment, but economists say that the decrease in joblessness will be slow, falling from an employment rate of 9.7 percent now to 8.6 percent by the end of December 2011.

Meanwhile, Federal Reserve Chair Ben Bernanke, speaking to the U.S. House Budget Committee, wouldn’t deny the possibility of a double-dip recession, but he said that it appears to the Fed that “the recovery has made an important transition from being supported primarily by inventory dynamics and by fiscal policy toward a recovery being led more by private final demand."

Source: The Wall Street Journal, Phil Izzo (06/09/2010)