Category — buying

 Late last night, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline.

Known as the “Homebuyers Assistance and Improvement Act of 2010,” the bill was passed by unanimous consent. The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed.

This legislation is designed to create a seamless extension, and the new closing deadline for eligible home sale transactions is now September 30, 2010. There will not be any gap between June 30 and the date the President signs the bill into law.

Why is now a smart time to buy?

• I.I.I.P.  Inventory, interest rates, incentives and price.  In most markets around the nation, home inventory has increased giving buyers a greater choice.  At the same time, mortgage rates remain at near historic lows and home prices have decreased the last two years which is the first time that has ever happened since World War II.  Prices dropped about 2% in 2007, 9.3% in 2008 and 12.4% in 2009 according to the National Association of Realtors.  This has made home affordability the best since at least 1973 and maybe ever.  Add in the first-time homebuyer incentive to make it a smart time to buy.
• Consumers also have to gain confidence in housing.  Reading headlines is not a great way to gain information.  Real estate professionals need to educate the local community on such issues as inventory, appreciation and time on market and remind everyone that all real estate is local.
• We have to remember that homes are selling when they are well-prepared for sale and priced right.  The reason is because people buy and sell homes for lifestyle reasons.  Births, marriages, new jobs, job transfers, retirement and others are all drivers.  Following the advice of a full-service professional, who knows market conditions and a home’s competition, is critical in readying a home for sale.
• What has happened is that sellers have become much more realistic in setting the price and continue to understand that a home is home, not a winning lottery ticket.
• We also have to see a reduction in foreclosed homes and short sales on the market.  These are a drag on prices and inventory. 

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  • We need to have Main Street American homeowners buying from Main Street American homeowners.  While getting first-time homebuyers back into the market is critical and the extension of the tax credit helps, the nation’s economy also needs the move up buyer back in the market.  That is why the tax credit expansion is so important.

Is it tougher for buyers to secure mortgage money?

• Mortgage funding remains available for consumers who meet the classic lending standards – including proof of income and solid credit.
• The reasons that most people purchase a home are overwhelmingly lifestyle-driven – from having a baby or getting married, to moving to a smaller home after retirement.  These types of lifestyle changes occur year-in and year-out, in every kind of market.  So even despite the headlines focused on economic issues, we will continue to see people buy and sell homes

Below are some great statistics on the local Outer Banks real estate market for November provided by The OBX Team.

OBX housing market overall:

·         100 residential homes in the Outer Banks sold.

·         November had an increase of 5 and 3 units sold from September and October respectively.

·         An additional 42 homes sold November 2009 compared to November 2008.

OBX distressed sales (foreclosures and short sales):

·         Distressed sales made up 27% of the total sales

·         17 foreclosed homes were sold in the month of November, along with 10 short sales for a total of 27 transactions.

·         Down from distress homes being 34% of the total sales in the month of October.

 The OBX Team is a group of three Realtors from Coldwell Banker Seaside Realty that is ready to handle all of your buying and selling needs. 

There has been much talk about the sale of luxury homes in the real estate industry as a result of our current economic conditions.  Research appears very positive for the short term future of luxury home sales. 

Million dollar homes are selling in many markets for steep discounts.  As mentioned in a previous post, this can largely be attributed to low interest rates on jumbo loans, which have dropped significantly over time. 

In cities such as San Francisco, $1 million dollars in 2007 bought about 1150 square feet; now it buys an additional 400 feet.  In Las Vegas, time on the market increased from 220 to more than 260 days, and the size of the house available for $1million has increased by 50% to 5400 square feet.  In South Florida, homes listing for $1 million and more average well over 100 days on the market. One particular waterfront home has been waiting for a buyer for almost 4 years. 

Here on the Outer Banks, there a plenty of $1 million dollar plus homes that are on the market.  However, with interest rates the way that they are, this inventory is steadily shrinking.  Now may be the time to buy that Outer Banks dream home.

There is no doubt that first-time homebuyers have been stimulating the housing market in these tough times.  In fact, most of these first-time homebuyers are between the ages of 35 and 45.  This age demographic has accounted for around 45% of all sales for the year.

“This is a historic time,” says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. “It’s a great opportunity to make some great gains in the future.”

A study by investment company T. Rowe Price points out that investing when prices are low can result in amazing gains.  For instance, between 1970 and 1990, the annualized rate of return for the S&P 500 was 11.5%.  With affordability the way it is, it may be time to pursue your dream home.  In times like these, it is more feasible to make these dreams a reality.

Distressed sales made up 29% of all residential properties sold in the Outer Banks in the month of July.  Distressed properties include short sales and bank owned homes.  Bank owned homes made up 20% of all sold residential homes for July. 

Distressed properties tend to push real estate values down.  An increase in distressed property sales can be viewed from a positive light because the sales demonstrate that buyers are coming back into the market, and as the distressed properties are cleared out prices can stabilize and eventually grow.

Housing affordability has continued its increase in August.  According to industry experts nationwide housing affordability during the second quarter of 2009 remained around the highest level since the series began 18 years ago.

The Wells Fargo Housing Opportunity Index (HOI) showed 72.3% of all home sales in the second quarter were affordable to average middle class Americans. “The increase in affordability-along with the $8,000 federal tax credit for home buyers is stimulating demand, particularly among young, first-time buyers,” said NAHB Chairman Joe Robson.

So where is the most affordable place to live in America? Indianapolis is considered to be the nation’s most affordable city to live in America.  Indianapolis has top the list for 16 consecutive quarters. 

COLDWELL BANKER REAL ESTATE SURVEYS 1,000 MEN AND WOMEN TO DISCOVER GENDER DIFFERENCES IN THE HOME-BUYING PROCESS

Survey Finds that While Couples Make Real Estate Buying Decisions Together, Women Make Up Their Minds Significantly Faster than Men
           
PARSIPPANY, N.J. (August 17, 2009) –   It often seems as though men and women are from different planets, but every day millions of couples navigate through day-to-day and even life-altering decisions. Because a home is the biggest purchase most people will make in their lifetime, Coldwell Banker Real Estate LLC surveyed 1,000 individuals to discover how much men and women differ in the home-buying process.

The real estate company engaged a third-party research firm, International Communications Research (ICR), to delve into the innerpsyche of men and women, asking questions such as “How long did it take for you to know that the last home you purchased was right for you?” and “If you found the home of your dreams but had concerns about its security, would you still be interested?” Coldwell Banker Real Estate also surveyed couples on additional topics, such as “Who wears the pants in the relationship?” when it comes to making major financial decisions.

“The results were surprising,” said Diann Patton, the Coldwell Banker consumer real estate expert. “Not only did we uncover some of the inherent differences between men and women, but we also pinpointed a number of ways that the two genders are actually the same. For example, both men and women are increasingly concerned with having a space to work in their homes – something we would not have seen 40 years ago.” She continued, “We also found that feeling insecure about a home’s safety is a deal-breaker for most people, regardless of gender.”

Patton noted this topic is particularly timely given that many first-time homebuyers are hoping to take advantage of the $8,000 tax credit before it expires on December 1, 2009.

Below are some key highlights from the Coldwell Banker Real Estate study:

Women may be inclined to make up their mind more quickly than men …

• When asked how long it took before they knew their home was “right” for them, almost 70 percent of women had made up their mind the day they walked into the house, vs. 62 percent of men. Conversely, significantly more men needed two or more visits: (32 percent of men vs. 23 percent of women).

Women would rather live closer to their extended family than to their job …

• 55 percent of women find it more important to be closer to their extended family (those that do not live in their household) than to their job, compared to only 37 percent of men.

A home’s security is a deal-breaker for both men and women …

• 64 percent of women said that if they found the home of their dreams but had concerns about its security, they would no longer be interested. More than half of men agreed (51 percent).

Couples say that no one “wears the pants in the relationship” in terms of major financial decisions …

• When asked who wears the pants in the relationship (when it comes to major financial decisions, such as purchasing a home), almost 70 percent of respondents living with their significant other said it’s actually mutual.
• However, 23 percent think that they, themselves, wear the pants in the relationship, not their partner. More men than women said this (26 percent vs. 20 percent, respectively).

Men and women agree on how they would use a spare room, for the most part …
When the respondents were asked how they would use an extra 12 x 12 room if it could be anything they wanted, men and women agreed on the top three most popular, and very practical, responses:

• Bedroom: 25 percent
• Office/Study: 15 percent
• Family Room / Den: 11 percent

However, men really do want a “Man Cave”…

• Interestingly, out of the 8 percent who indicated they would turn that spare room into an entertainment center, it was a preponderance of men leading the charge.  In fact, four times as many men as women said they would use the extra space for recreation / entertainment.

In addition to providing background on the survey results, Patton is able to offer tips for couples who are currently going through the process of buying a home.  “These results further validate how critical it is for couples to recognize each other’s differences and work together, from deciding a neighborhood to how to use a spare room,” she said. “Online tools and the expertise of a real estate professional can be particularly helpful for couples, especially if they work together step-by-step along the way.”

Methodology: Coldwell Banker Real Estate engaged ICR to conduct an omnibus survey via telephone in May 2009, among more than 1,000 respondents.

About Coldwell Banker Real Estate LLC
Since 1906, the Coldwell Banker® organization has been a premier full-service real estate provider. In 2008, Franchise Times magazine’s prestigious Top 200 issue ranked the Coldwell Banker system No. 1 in real estate for the ninth straight year and 12th among franchisors in all industries. The Coldwell Banker System has approximately 3,200 residential real estate offices and approximately 100,000 sales associates in 47 countries and territories. The Coldwell Banker System is a leader in the industry in residential and commercial real estate, and in niche markets such as resort, new home and luxury property through its Coldwell Banker Previews International® division. It is a pioneer in consumer services with its Coldwell Banker Concierge® Service Program and award-winning Web site, www.coldwellbanker.com. Coldwell Banker Real Estate LLC is a subsidiary of Realogy Corporation, a global provider of real estate and relocation services. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. Each office is independently owned and operated.

  Information released by Bloomberg.com this morning shows that new homes sales have risen 11% in the month of June.  This is the biggest jump in eight years! 

Falling prices and a drop in mortgage rates are getting buyers off the bench. “We are making some progress in absorbing this huge inventory overhang” and that “is a fundamental step we need to take to begin to see home prices improve,” said Robert Dye, a senior economist at PNC Financial Services Group in Pittsburgh.

Another positive sign for the housing market is the fact that some of the nation’s major building corporations have shown positive signs as their stocks jump.