Realty Reality

Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum

2009-10-23T23:06:00.000-04:00

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®(NAR).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 9.4 percent to a seasonally adjusted annual rate1 of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”

Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

NAR President Charles McMillan, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said.

“Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.

Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply2 at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.

The national median existing-home price3 for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price4 was $175,100 in September, down 11.7 percent from September 2008.

Regionally, existing-home sales in the Northeast increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price in the Northeast was $234,700, down 7.0 percent from a year ago.

Existing-home sales in the Midwest jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price in the Midwest was $147,600, which is 1.0 percent below September 2008.

In the South, existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price in the South was $153,500, down 7.6 percent from a year ago.

Existing-home sales in the West surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: NAR also reports monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, and is posted with other tables at: http://www.realtor.org/research/research/ehsdata. For information on areas not included in the report, please contact the local association of Realtors®.

1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.

3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

4Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for October will be released November 23. The next Pending Home Sales Index is scheduled for November 2. NAR’s quarterly report on metro area home prices and state home sales is on November 10; release times are 10 a.m. EST.

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

Effective Selling Of Your Property

2009-10-10T13:27:00.015-04:00

When marketing a property for a seller, I don't just "List and cross my fingers". My job is to move property. That is done by maximizing four primary factors, which effect how buyers will perceive a property's value.

To effectively sell a property, these four factors that must be adjusted to a maximum combination so that a sale can occur are:

Price, Condition, Terms and Location.

Who hasn't heard the phrase in real estate marketing, "Location, Location, Location"? While location is a critical component of real estate valuation, we usually can't change property location, but we can vary the other factors to some extent.

Terms can include credits (for repairs, updates, etc.), financing help (including seller assist at closing, private mortgaging of property, either as a primary or secondary loaner), allowing extended time to complete the sale, or any number of other concessions and incentives.

Property Conditions that can be addressed vary from repair of deteriorated aspects of property or replacements to remodeling and upgrading section(s) or all of the property (interior and/or exterior). Proper staging, including de-cluttering and rearranging spaces for maximum appeal, is also an important component of enhancing the condition of any property.

Market conditions also directly impact properties for sale: supply (and demand), competition (what other properties are offering at similar price point and/or value).

The bottom line: it always boils down in the end to price. A good price is one that is based on the value of the property as perceived by the buyer. There is always a price (assuming buyers exist) at which any property will sell in a reasonable amount of time. If the potential buyer sees good value for the price, he will take action to acquire it.

If none of the other factors can be adjusted significantly, then adjusting price is critical.

Of course, it doesn't do any good to maximize the four factors if no buyer is aware of that great property for sale.

I put a great deal of time, effort and expense in assuring that any property we list will be getting maximum exposure to the widest market of potential buyers (local, state-wide, regional, national and international). Our web sites are some of the tops in the industry, providing not just basic information, but also sophisticated, yet easy to use search, tracking and evaluation tools.

If a buyer exists, he will find the property that we list.

We work closely with sellers to obtain the best combination of the four factors based on current market conditions and reach the widest possible numbers of potential buyers.

Our goal is to obtain the best price that will yield a sale in the shortest possible time.

Visit my web site for more details about our experienced professional real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

U.S. Foreclosure Laws

2009-10-09T16:13:00.000-04:00

Here is a link to the United States foreclosure laws site providing complete foreclosure information, by state.

Each state foreclosure page includes a summary of state foreclosure law as well as links to other foreclosure law resources.

United States Foreclosure Laws

Record Streak Continues for Pending Home Sales

2009-10-01T23:16:00.000-04:00

Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.

Lawrence Yun, NAR chief economist, said not all contracts are turning into closed sales within an expected timeframe. “The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month.”

The Pending Home Sales Index in the Northeast jumped 8.2 percent to 85.3 in August and is 12.0 percent higher than August 2008. In the Midwest the index rose 3.1 percent to 90.8 in August and is 7.6 percent above a year ago. In the South, pending home sales increased 0.8 percent to an index of 104.6 and is 8.2 percent above August 2008. In the West the index surged 16.0 percent to 130.5 and is 22.3 percent above a year ago.

“There is likely to be some double counting over a span of several months because some buyers whose contracts were cancelled have found another home and signed a new contract to buy,” Yun explained. “Perhaps the real question is how many transactions are being delayed in the pipeline, and how many are being cancelled? Without historic precedents, it’s challenging to assess.”

Yun also noted that the data sample coverage for pending sales is smaller than the measurement for closed existing-home sales, so the two series will never match one for one.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said first-time buyers need to act now. “Potential first-time buyers must make a contract offer very soon to have a reasonable chance of qualifying for the tax credit,” he said. “Congress needs to extend and expand this program because it’s stimulating the economy and reducing inventory close to price stabilization points.”

McMillan said a sizable number of homebuyers already in the pipeline could be let down because of the tight deadline. “We know there is a pent-up demand because sales are below normal levels for the size of our population. The faster we absorb excess inventory, the sooner we’ll turn the corner on home prices, prevent additional families from becoming upside-down in their mortgages, and give Wall Street the confidence to extend credit to other sectors,” he said. “Each home sale pumps an additional $63,000 into the economy through related goods and services, so the benefits of extending and expanding the tax credit far outweigh the costs.”

Yun said the forecast for home sales and prices depends very much on whether a tax credit is extended. “All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession,” he said. “Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for September will be released October 23; the next Pending Home Sales Index will be on November 2.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Existing-Home Sales Ease Following Four Monthly Gains

2009-09-25T10:41:00.001-04:00

Existing-home sales in August gave back some of their strong gain in July but remain above year-ago levels, according to the National Association of Realtors®(NAR).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 2.7 percent to a seasonally adjusted annual rate[1] of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4 percent above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2 percent.

Lawrence Yun, NAR chief economist, said the tax credit is working. “Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus. The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions,” he said. “Some of the give-back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can’t take a housing rebound for granted.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.19 percent in August from 5.22 percent in July; the rate was 6.48 percent in August 2008.

An NAR practitioner survey shows first-time buyers purchased 30 percent of homes in August, and that distressed homes accounted for 31 percent of transactions; both were unchanged from July.

“The recent trend shows broad improvement in most of the country, but with an expected rise in foreclosures over the next 12 months we need to maintain a healthy level of ready buyers to absorb the inventory. An extension of the tax credit is critical to preserve incentives for financially qualified buyers to enter the market,” Yun said.

He added that many buyers had been on the sidelines during the past few years, waiting for signs of stabilization. “Now that the market is showing some momentum, we have an opportunity to achieve a more rapid and broader stabilization in home prices. Extending and expanding the tax credit also would help to keep other families from becoming upside down in their mortgages or risk foreclosure,” Yun said.

“When home prices show sustained gains, credit will become more widely available to other sectors because Wall Street will be able to price risks confidently. Stable home values will also allow more families to purchase consumer products and provide a strong boost for the broader economy.”

NAR President Charles McMillan, said time is running very short for the existing tax credit. “Because it’s generally taking 60 days to close on a home after a contract is offered, buyers have little time to act to complete a purchase by the November 30 deadline,” he said.

“There’s no guarantee what Congress might do, so there’s really no time to waste. Since Realtors® have unparalleled knowledge of local markets, they can also advise first-time buyers on any additional state or local programs that might be able to offer them financial assistance, and help them close on a home before the tax credit expires.”

Total housing inventory at the end of August fell 10.8 percent to 3.62 million existing homes available for sale, which represents an 8.5-month supply2 at the current sales pace, down from a 9.3-month supply in July. Unsold inventory totals are 16.4 percent lower than a year ago.

The national median existing-home price[3] for all housing types was $177,700 in August, down 12.5 percent from August 2008. Distressed properties continue to downwardly distort the median price because they generally sell for 15 to 20 percent less than traditional homes.

Single-family home sales fell 2.8 percent to a seasonally adjusted annual rate of 4.48 million in August from a level of 4.61 million in July, but are 2.5 percent higher than the 4.37 million-unit pace in August 2008. The median existing single-family home price was $177,500 in August, down 12.1 percent from a year ago.

Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 620,000 units in August from a spike of 630,000 in July, but are 10.1 percent higher than the 563,000-unit level a year ago. The median existing condo price[4] was $179,300 in August, which is 15.7 percent below August 2008.

Regionally, existing-home sales in the Northeast declined 2.2 percent to an annual pace of 910,000 in August, but are 5.8 percent above August 2008. The median price in the Northeast was $241,100, which is 10.5 percent below a year ago.

Existing-home sales in the Midwest fell 6.6 percent in August to a level of 1.14 million but are unchanged from a year ago. The median price in the Midwest was $149,900, down 10.4 percent from August 2008.

In the South, existing-home sales were down 3.1 percent to an annual pace of 1.89 million in August but are 1.6 percent above August 2008. The median price in the South was $157,400, which is 11.0 percent below a year ago.

Existing-home sales in the West declined 2.7 percent to an annual rate of 1.16 million in August but are 7.4 percent higher than a year ago. The median price in the West was $220,500, down 12.2 percent from August 2008.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: Beginning with this report, NAR is including monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas. For information on areas not included in this report, please contact your local Realtor® association.

1 The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.

3 The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

4 Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for September will be released October 23. The next Pending Home Sales Index & Forecast is scheduled for October 1; release times are 10 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

Credit Crunch Constrains International Home Buyers in U.S. Market

2009-09-15T16:37:00.002-04:00

Interest in U.S. real estate by international buyers declined due to the worldwide recession and severe credit crunch, according to the 2009 National Association of Realtors®(NAR) Profile of International Home Buying Activity.

The share of Realtor® clientele who are foreign buyers is smaller than in previous years, but among those purchasing nearly half paid all cash – bypassing the mortgage process. Twenty-three percent of survey respondents served at least one international client in the 12-month period between the end of May 2008 and the end of May 2009, down from 26 percent in the 2008 study. During this period an estimated 154,000 homes were sold to foreign nationals, which is down from approximately 170,000 international transactions during the previous 12 months.

The median price for a home paid by foreign buyers for the year ending in May 2009 was $247,100, higher than the overall national price of $198,100 in 2008. A significant number, 45.8 percent of foreign buyers, paid cash for their property, in part because obtaining a mortgage was more difficult than in prior years. The total dollar volume was $38.7 billion.

Lawrence Yun, NAR chief economist, said recent improvements in the credit market will help reverse the slide in foreign buyers. “Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases,” he said. “In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States. Property investment here generally builds wealth over the long term.”

U.S. laws do not restrict or scrutinize most property purchases by foreign nationals. There are few barriers to owning property here, unlike transactions in many other countries, although immigration laws prohibit foreigners from remaining in the U.S. continuously for more than six months without a special visa. In addition, international investors are afforded the same property rights as those enjoyed by U.S. citizens.

The top five countries of origin for foreign buyers were Canada, with 17.6 percent of buyers; the United Kingdom, 10.5 percent; Mexico, 9.8 percent; India, 8.5 percent; and China, 5.4 percent. The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased.

Although most buyers were from North America, Europe and Asia, buyers from Latin America, Africa and Oceania also purchased U.S. real estate.

Foreign buyers were active in every state and the District of Columbia, with the most popular states being Florida, which accounted for 23.0 percent of all foreign purchases; California, 13.0 percent; Texas, 10.7 percent; and Arizona, 7.1 percent. These states are major gateways into the U.S. from other countries and also offer relatively mild climate.

California saw a notable rise in foreign interest as affordability conditions improved markedly in the state last year. “Florida is the most popular state for European and Latin American buyers, while Asian buyers are drawn to California,” Yun said.

The study shows 69 percent of international purchases were single-family homes, while condos accounted for 18 percent. Townhomes made up 8 percent of transactions, with commercial property at 4 percent. Nearly 46 percent of properties were in suburban areas and 25 percent in urban environments. The rest were evenly split between resorts and small towns or rural areas.

The prime purpose for purchasing a property in the U.S. is to use it for a vacation home, cited by 33.9 percent of respondents; for both investment and vacations, 23.5 percent; as a residential rental property for investment, 18.3 percent; and commercial property for investment, 3.5 percent.

The 2009 NAR Profile of International Home Buying Activity is based on responses from 3,785 Realtors® and describes international home buying activity in the U.S. over the 12-month period from the end of May 2008 to May 2009. The full report is available at www.realtor.org/research/research/reportsintl.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

IRS Deadlines Near for Expanded Business Loss Carryback Option

2009-09-11T16:29:00.000-04:00

Eligible taxpayers must act soon if they want to take advantage of the expanded business loss carryback option included in this year’s Recovery law. Click on the IRS link below for details

Deadlines Near for Business to Choose Expanded NOL Election; Sept. 15 for Many Corporations, Oct. 15 for Individuals

Source: IR-2009-79, Sept. 11, 2009

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

Federal Reserve Beige Book Report September 2009 Report

2009-09-10T16:12:00.001-04:00

Reports from the 12 Federal Reserve Districts indicate that economic activity continued to stabilize in July and August. Relative to the last report, Dallas indicated that economic activity had firmed, while Boston, Cleveland, Philadelphia, Richmond, and San Francisco mentioned signs of improvement. Atlanta, Chicago, Kansas City, Minneapolis, and New York generally described economic activity as stable or showing signs of stabilization; St. Louis remarked that the pace of decline appeared to be moderating. Most Districts noted that the outlook for economic activity among their business contacts remained cautiously positive.

The majority of Districts reported flat retail sales. Richmond, Philadelphia, Chicago, Atlanta, and Boston remarked that retailers continued to carefully manage inventories, keeping them in line with low sales levels. A majority of Districts confirmed that the "cash-for-clunkers" program boosted traffic and sales. Richmond, Atlanta, Chicago, and Minneapolis also noted increases or planned increases in automobile-related production. Most regions reported some improvement in residential real estate markets. Downward pressure on home prices continued in most Districts, although Dallas and New York noted that local prices were firming. Reports on commercial real estate suggest that the demand for space remained weak and that nonresidential construction-related activity continued to decline. San Francisco, Philadelphia, and St. Louis noted that the demand for nonfinancial services remained soft, although the pace of the decline was described as slowing in the latter two Districts. Loan demand was described as weak and many Districts reported that credit standards remained tight. Most Districts reported improvements in manufacturing production. For instance, Philadelphia, Richmond, Atlanta, Cleveland, and Chicago reported moderate increases in new orders. Labor market conditions remained weak across all Districts. However, staffing firms in Atlanta, Dallas, Richmond, Cleveland, Philadelphia, Boston, New York, and Chicago did report a slight pickup in the demand for temporary workers.

Wage pressures remained minimal across all Districts. Consumer prices were described as being steady in most Districts, although Kansas City and San Francisco noted some downward pressure on retail prices.

In the Philadelphia (Third District) region, economic conditions showed little change from July to August, although there were a few scattered signs of improvement. Manufacturers, on balance, reported a steady rate of shipments and a slight increase in new orders. Retailers indicated that sales of back-to-school merchandise had picked up, although the overall sales pace remained soft. Motor vehicle dealers indicated that sales of new vehicles rose from July to August, although they remained below the year-ago pace. Third District banks reported level loan volume, overall, and further declines in credit quality. Residential real estate agents generally noted steady sales of existing homes, although they noted that the sales rate remained below the year-ago pace. Nonresidential real estate leasing and construction activity continued to be slow. Service sector firms reported mainly steady activity at a slow pace. Business firms in the region reported mostly level input costs and output prices in August, although they noted some increases compared with July.

The outlook in the Third District business community was slightly better in August than at the time of the previous Beige Book. Although most contacts do not expect strong improvement in the immediate future, some now believe economic conditions are beginning to stabilize and that a slow pickup in activity might get under way in the near term. Manufacturers forecast a rise in shipments and orders during the next six months. Retailers are generally cautious, expecting only slight sales gains in the rest of the year. Auto dealers think sales will ease in the short term, but they believe that the sales rate might be better in the later part of the year than it was in the first half. Bankers anticipate demand for credit to remain soft as businesses and individuals continue to reduce indebtedness. Residential real estate contacts believe housing demand will continue to stabilize, although they expect only a slight improvement in market conditions during the rest of the year. Contacts in nonresidential real estate expect leasing and construction to remain weak during the rest of this year.

Source Beige Book

Click here for the Federal Reserve September 2009 Beige Book [Beige Book Archives]

See related blog articles:
Federal Reserve Beige Book For Economic Conditions (What is the "Beige Book"?)
The Federal Reserve - Making Sense In Plain English

IRS Web Site for Back-to-School Tax Breaks

2009-09-09T16:19:00.001-04:00

Click on the link below for information on various tax breaks for higher education may be found on a new Web section of IRS.gov.

Special IRS Web Section Highlights Back-to-School Tax Breaks; Popular 529 Plans Expanded, New $2,500 College Credit Available

Source: IR-2009-78, Sept. 9, 2009.

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

Real Estate Cyber Tips - September 2009

2009-09-01T19:46:00.001-04:00

CYBER MAGIC TRICKS

TRICK#1

ARE THEY TELLING YOU THE TRUTH?
Wouldn’t it be useful to know when someone in not telling you the truth? This interesting service uses technology has been evaluated by various governmental, security and law enforcement entities and it is easy to use and understand. Once you have your pin number you just dial the toll-free access number, put in your PIN and provide the destination phone number of the party to be analyzed. Once your call begins, you'll be able to engage in a natural conversation. A buzz is played when the called party is suspected of not telling the truth. In addition you can view a web-based dashboard to watch a truth indicator move as your subject is speaking. We usually lean toward programs that are free in this column – but this one ignited our curiosity – and the price/value ratio isn’t exorbitant!
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TRICK#2

WALK AWAY FROM YOUR CELL CONTRACT!
Are you stuck in a cell phone contract and want to get out? Maybe you want to get a snazzy new phone that a different network is offering but have a year to go on your existing agreement – with a penalty that could cost up to $200 to cancel. These folks have a neat way to help you transfer your contract to another consumer for the remainder of the contract period. You are fully absolved of all responsibility and are free to initiate a new plan with a different carrier. This system also provides an incentive for those looking to start a wireless service plan with a short-term contract and no activation fees that otherwise could run as high as $45. Kiplinger liked this one. Maybe you can get that snazzy phone after all!
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GREAT PLACES!

GREAT PLACE #1

TRACK YOUR WARRANTIES!
This happens to us all – and if it hasn't happened yet – it will -- guaranteed! You buy that great appliance, TV, cell phone – whatever. You get a warrantee (say 12 months). Then on the 368th day you decide to call and find out why the frober switch hasn’t been working for the last couple of weeks. You’re "outa luck"! These folks have a site that will help you avoid this type of dilemma and keep you on top of your warranties. They help you to organize your warranty information on anything you purchase. And you’ll get reminder emails at 3 months, 1 month and 1 week before your warranty expires. This way you can check your item to be sure it is in good working order. If it isn't you will have all the information needed, right in front you, to arrange for warranty service. Neat site ---and it's on the house!
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GREAT PLACE #2

SAVE ON YOUR SHIPPING COSTS!
Do you habitually fill out the usual form to ship your stuff to the next town -- or around the world? The Wall Street Journal says that to find the best shipping deals we would do well to check this shipping comparison site. Here you can check rates for your package with Google like ease by comparing the major carriers, including UPS, DHL, FedEx, and the U.S. Postal Service. Just enter your zip code and the zip code for the recipient plus the weight of the package. In a millisecond you’re looking at all of the options available with a neat cost comparison. Easy way to save—and the nice folks bring this service to you with their complements.
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The information contained in Real Estate CyberTips is believed to be true and correct but no warranties or guarantees are provided and readers should rely solely on their own information and advisors in connection with any sites, services or products reviewed. All content Copyright 2009, RECS. All rights reserved.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Pending Home Sales on a Record Roll

2009-09-01T16:12:00.000-04:00

Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index, [1] a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.

Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.

“Other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,” Yun said.

NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.

The Pending Home Sales Index in the Northeast declined 3.0 percent to 78.8 in July but is 4.7 percent higher than July 2008. In the Midwest the index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago. In the South, pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008. In the West the index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago.

NAR President Charles McMillan, said Congress needs to keep the momentum going. “Even with a good recovery taking place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices,” he said.

“To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy,” McMillan said.

Housing Affordability Index [2] stood at 158.5 in July, below the peak set in April but is still 36.0 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

Yun expects existing-home sales to rise through the fourth quarter. “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year,” he said. “However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,’ to ‘I don’t want to miss out on a recovery’.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

2 The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for August will be released September 24; the next Pending Home Sales Index will be on October 1.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Decline in Commercial Real Estate Sectors Appears to be Slowing

2009-08-19T17:34:00.003-04:00

Commercial real estate activity has suffered from a severe credit crunch for commercial sectors, sustained job losses and weak consumer spending, although the decline appears to be slowing. A forward-looking indicator shows commercial real estate will remain weak into 2010, but recent actions by the Federal Reserve should improve some flow of capital into commercial lending, according to the National Association of Realtors®(NAR).

The Commercial Leading Indicator for Brokerage Activity [1] declined 1.3 percent to an index of 101.5 in the second quarter from a downwardly revised reading of 102.8 in the first quarter, and is 13.7 percent below the 117.6 recorded in the second quarter of 2008. The index is at the lowest level since the first quarter of 1994; NAR’s track of the commercial leading indicator dates back to 1990.

Lawrence Yun, NAR chief economist, noted the pace of decline moderated, but the leading indicator has fallen sharply and quickly from the peak, suggesting much lower business opportunities for commercial real estate practitioners engaged in leasing, sales and property management. “The reduction in commercial real estate activity is expected at least through the first quarter of 2010. Any meaningful recovery is not likely to occur before the second half of next year.”

The decline is driven by falling industrial production, far fewer jobs requiring office and retail space, a fall in durable goods shipments, much lower personal spending, lower retail and wholesale sales, and a negative return on commercial investment.

“With the economic recession likely coming to an end within six months, a recovery in commercial real estate may soon follow,” Yun said. “The office sector requires job growth to fuel the demand for additional space, the industrial sector needs a rise in production and the retail sector is tied to consumer spending. Multifamily housing – the apartment market – often performs in reverse to trends in home sales, but can improve if there is sufficient household growth.”

The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, a separate attitudinal survey of more than 650 local market experts, [2] also suggests a lower level of business activity in upcoming quarters. Most respondents are seeing sales prices that are lower than replacement costs, and 96 percent report deep rental discounts and increased tenant concessions.

The SIOR index has declined for 10 consecutive quarters and stood at 36.0 in the second quarter, compared with a level of 100 that represents a balanced marketplace.

Realtors® Commercial Alliance Committee chair Robert Toothaker said it is crucial to improve the availability of funds for commercial loans. “Properties with positive cash flow have had trouble finding financing to roll over debt, transactions are essentially at a standstill and new development is virtually nonexistent in most areas,” he said.

“Commercial loans are mostly short term, and without ready financing even the most experienced commercial players can get into trouble. The Fed's recent decision to extend the TALF program for commercial mortgage backed securities beyond the end of 2009 is highly welcome because the flow of liquidity to commercial real estate will be critical for a sustainable economic recovery,” Toothaker said. “However, unless there is a tremendous short-term recovery in the CRE markets, we expect the Fed will be revisiting the issue of another extension of the TALF program early in 2010.”

Bond yields on CMBS rose following the announcement by the Federal Reserve on August 17 that it is extending TALF lending for existing commercial securities through March 31, 2010, and for newly issued CMBS through June 30.

Looking at the broad market, commercial vacancy rates continue to rise while rents decline, according to NAR’s latest COMMERCIAL REAL ESTATE OUTLOOK. [3] The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research.

Yun projects the unemployment rate to peak around 10.4 percent in the fourth quarter, then gradually improve as 2010 progresses. “We will need sustained economic growth before many employers have enough confidence to expand the job base and create new demand for space,” he said.

The gross domestic product should contract 2.9 percent in 2009 before growing 1.5 percent next year. Inflation, as measured by the consumer price index, is forecast to decline 0.5 percent this year before rising 2.0 percent in 2010.

Office Market

The office sector continues to suffer the most from job losses, which reduces the demand for space. Vacancy rates will probably increase from 15.5 percent in the second quarter to 18.8 percent in the second quarter of 2010.

Annual rent in the office sector is projected to fall 14.1 percent this year and 10.0 percent in 2010 after a 0.4 percent decline last year. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is estimated to be a negative 75.0 million square feet in 2009 and a negative 47.2 million next year.

Industrial Market

The contracting global economy has constricted the industrial sector. Vacancy rates are likely to rise from 13.0 percent in the second quarter of this year to 15.0 percent in the second quarter of 2010.

Annual industrial rent should fall 11.4 percent this year and another 11.7 percent in 2010, after declining 0.8 percent in 2008. Net absorption of industrial space in 58 markets tracked is seen at a negative 300.0 million square feet this year, and a negative 112.0 million in 2010. Because much construction in recent years was customized to meet specific industrial needs, many obsolete structures remain on the market.

Retail Market

Given a pattern of weak consumer spending, the retail vacancy rate is forecast to edge up from 11.7 percent in the second quarter to 12.9 percent in the same period of 2010. Average retail rent is likely to fall 6.1 percent in 2009 and 4.9 percent next year; it declined 2.0 percent in 2008. Net absorption of retail space in 53 tracked markets is expected to be a negative 25.9 million square feet this year and a negative 3.6 million in 2010.

Multifamily Market

The apartment rental market – multifamily housing – is facing higher home sales by first-time buyers, but also is experiencing increased demand from families who have lost their homes. Multifamily vacancy rates should slip from 7.4 percent in the second quarter of 2009 to 7.1 percent in the second quarter of next year.

Average rent is projected to decline 1.5 percent this year, then rise 0.8 percent in 2010, following a 2.9 percent gain in 2008. Multifamily net absorption is forecast at 168,300 units in 59 tracked metro areas in 2009 and 64,600 next year.

The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the commercial community. NAR's Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

More than 81,000 NAR and institute affiliate members offer commercial brokerage services.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 NAR’s commercial leading indicator is a tool to assess market behavior in the major commercial real estate sectors. That index incorporates 13 variables that reflect future commercial real estate activity, weighted appropriately to produce a single indicator of future market performance, and is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate.

The 13 series in the index are industrial production, the NAREIT (National Association of Real Estate Investment Trusts) price index, NCREIF (National Council of Real Estate Investment Fiduciaries) total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service.

NAR reviewed a wide variety of indicators, examined the relationships of indicators that demonstrated a historical impact on commercial real estate, and modeled a forward-looking index based on historic trends. Although individual indicators sometimes move in opposite directions, together they offer a better indication of future market activity.

Quarterly data for 13 selected series were reviewed back through the first quarter of 1990. The modeling demonstrated a change in commercial brokerage activity that could be seen two quarters later as measured by net absorption in the industrial and office sectors, and the completion of new commercial buildings as measured by the value of building construction put-in-place of office, warehouse, retail and lodging structures. An index of 100 is defined as the level of commercial real estate market activity during the first quarter of 1990, the first period to be analyzed.

2 The SIOR Commercial Real Estate Index, conducted by SIOR and analyzed by NAR Research, is a diffusion index based on market conditions as viewed by local SIOR experts. For more information, contact Richard Hollander, SIOR, at 202/449-8200.

3 Publication of additional analysis, including metropolitan data, will be posted under Economists’ Commentary in the Research area of Realtor.org in coming weeks.

The next commercial leading indicator index, forecast and market report will be released on November 19.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Creating the Right Curb Appeal - Do's and Don'ts of Preparing Your Home Exterior for Selling

2009-08-17T12:24:00.005-04:00

"You're ready to put a property on the market. Inside, it is beautifully decorated and sparkling clean. That bit of peeling paint on the porch and the bald spots in the flower beds won't bother prospective buyers, right? Maybe not..."

Check out this article prepared by our local MLS service to help increase the curb appeal of your listed property:

Creating the Right Curb Appeal

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]
and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Avoid Recalled Items

2009-08-16T20:14:00.000-04:00

When buying items on the Internet, you can minimized the risk of purchasing a recalled item by making use of the U.S. government's online recall resource website:

http://www.Recalls.gov/

According to the site, it's purpose is "To provide better service in alerting the American people to unsafe, hazardous or defective products, six federal agencies with vastly different jurisdictions have joined together to create www.recalls.gov -- a "one stop shop" for U.S. Government recalls."

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]
and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

2nd Quarter Existing-Home Sales Help by Metro Prices

2009-08-12T22:40:00.000-04:00

Existing-home sales in the second quarter showed healthy gains from the first quarter in the vast majority of states, and price declines have increased affordability in most metro areas, according to the latest survey by the National Association of Realtors®(NAR).

Total state existing-home sales, including single-family and condo, rose 3.8 percent to a seasonally adjusted annual rate1 of 4.76 million units in the second quarter from 4.58 million units in the first quarter, but remain 2.9 percent below the 4.90 million-unit pace in the second quarter of 2008.

Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises.

Lawrence Yun, NAR chief economist, said the sales gain appears to be sustainable. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said. “There have been sustained sales gains in Arizona, Nevada and Florida, as well as diverse areas such as Maryland, the District of Columbia and Nebraska. More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota and Montana.”

Yun explained housing’s impact on the overall economy. “Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy – that’s how the housing engine traditionally pulls us out of recession. In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy.”

During the second quarter, 129 out of 155 metropolitan statistical areas2 reported lower median existing single-family home prices in comparison with the second quarter of 2008, while 26 areas had price gains.

Distressed sales – foreclosures and short sales – accounted for 36 percent of transactions in the second quarter, which continued to weigh down median home prices because they typically are sold at a 15 to 20 percent discount; first-time buyers accounted for one-third of transactions. The national median existing single-family price was $174,100, which is 15.6 percent below the second quarter of 2008. The median is where half sold for more and half sold for less.

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage declined to a record low 5.03 percent in the second quarter from 5.06 percent in the first quarter; the rate was 6.09 percent in the second quarter of 2008.

NAR President Charles McMillan said there are unique opportunities in the current market. “Housing affordability is hovering near record highs and there’s a wide selection of homes, but first-time buyers need to move quickly to take advantage of the $8,000 tax credit because they have to finalize the transaction by November 30,” he said. “Various state, local and nonprofit programs target first-time buyers, and a Realtor® can help you identify the programs and financing options that are currently available in your area.”

The largest sales gain between the first and second quarters was in Idaho, up 67.5 percent; followed by Hawaii which rose 24.2 percent; New York, up 22.3 percent, Wisconsin; with a 21.7 percent gain; and Nebraska with a 20.3 percent increase. Twelve other states experienced double-digit sales increases from the first quarter.

Year over year, California, Minnesota and Michigan are showing double-digit gains from the second quarter of 2008 but are off from the first quarter of this year.

The largest single-family home price increase in the second quarter was in the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price of $113,200 rose 30.6 percent from a year ago. Next was the Cumberland area of Maryland and West Virginia at $123,500, up 21.7 percent from the second quarter of 2008, followed by Elmira, N.Y., where the median price increased 11.3 percent to $85,000.

“The sharpest price declines continue to be concentrated in metros with high levels of foreclosures, including areas in California, Florida, Arizona and Nevada, where distressed homes comprise many of the transactions,” Yun said

Median second-quarter metro area single-family home prices ranged from a very affordable $55,700 in the Saginaw-Saginaw Township North area of Michigan to $569,500 in Honolulu. The second most expensive area in the second quarter was the San Jose-Sunnyvale-Santa Clara area of California, at $500,000, followed by San Francisco-Oakland-Fremont at $472,900.

Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $71,500, and Lansing-East Lansing, Mich., at $81,200.

“Recently sold homes are concentrated in lower price ranges. The median price may not be representative of overall values in a given area because many middle priced homes are not on the market,” Yun clarified.

In the condo sector, metro area condominium and cooperative prices – covering changes in 57 metro areas – showed the national median existing-condo price was $176,900 in the second quarter, down 19.8 percent from the second quarter of 2008. Four metros showed annual increases in the median condo price and 53 areas had declines.

The metros with condo price rises were the Virginia Beach-Norfolk-Newport News area of Virginia and North Carolina at $195,000, up 2.6 percent, followed by the Wichita, Kan., area, where the median price of $109,500 rose 2.0 percent from the second quarter of 2008, Dallas-Fort Worth-Arlington, at $137,800, up 0.7 percent, and the Colorado Springs, Colo., area, which rose 0.2 percent to $145,200.

Metro area median existing-condo prices in the second quarter ranged from $66,400 in Las Vegas-Paradise, Nev., to $405,700 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was Honolulu at $318,400, followed by Boston-Cambridge-Quincy at $277,400.

Other affordable condo markets include the Sacramento-Arden-Arcade-Roseville area of California at $101,200 in the second quarter, and Tucson, Ariz., at $102,500.

Regionally, existing-home sales in the Northeast jumped 15.0 percent in the second quarter to a pace of 797,000 units but are 8.4 percent below a year ago.

The median existing single-family home price in the Northeast declined 9.7 percent to $246,000 in the second quarter from the same quarter in 2008. After Elmira, the best gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $115,400 rose 6.7 percent from the second quarter of 2008, followed by Syracuse, N.Y., at $124,600, up 0.8 percent.

In the Midwest, existing-home sales rose 3.2 percent in the second quarter to a pace of 1.06 million but are 5.3 percent below a year ago.

The median existing single-family home price in the Midwest was down 8.6 percent to $146,800 in the second quarter from the same period in 2008. After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Bismarck, N.D., where the median price of $157,800 was 3.5 percent higher than a year ago, followed by Springfield, Ill., at $116,200, also up 3.5 percent, and Topeka, Kan., at $113,300, up 2.7 percent.

In the South, existing-home sales increased 3.9 percent in the second quarter to an annual rate of 1.76 million but are 7.2 percent lower than the second quarter of 2008.

The median existing single-family home price in the South was $158,600 in the second quarter, down 10.3 percent from a year earlier. After Cumberland, the strongest price increase in the region was in Beaumont-Port Arthur, Texas, with an 11.0 percent gain to $138,600, followed by, Jackson, Miss., at $140,100, up 8.2 percent, and Shreveport-Bossier City, La., at $146,800, up 3.0 percent.

Existing-home sales in the West declined 2.3 percent in the second quarter to an annual rate of 1.13 million but are 11.8 percent above a year ago.

The median existing single-family home price in the West was $212,600 in the second quarter, which is 26.6 percent below the second quarter of 2008. The best metro price performances in the West were in Kennewick-Richland-Pasco area of Washington, where the median price of $163,900 rose 0.3 percent from a year earlier, and Yakima, Wash., at $162,800, also up 0.3 percent. No other areas covered in the region reported increases.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

Data tables for both metro area home prices and state existing-home sales are posted at:
www.realtor.org/research/research/metroprice.
For areas not covered in the tables, contact your local association of Realtors®.

1 The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing. NAR began tracking the state sales series in 1981.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

2 Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. A list of counties included in MSA definitions is available at:

www.census.gov/population/estimates/metro-city/0312msa.txt

Regional median home prices include rural areas and samples of many smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series was launched in 2006 with several years of historic data.

Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.

Third quarter metro area home price and state resale data will be released November 10.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

Uptrend Contining For Pending Home Sales

2009-08-05T12:33:00.000-04:00

Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index,[1] a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.

Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said. “Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”

The Pending Home Sales Index in the Northeast rose 0.4 percent to 81.2 in June and is 5.8 percent above a year ago. In the Midwest the index increased 0.8 percent to 89.9 and is 11.6 percent above June 2008. The index in the South jumped 7.1 percent to 100.7 in June and is 8.9 percent higher than a year ago. In the West the index rose 2.9 percent to 100.4 but is 0.2 percent below June 2008.

NAR President Charles McMillan, is hopeful that a recently elevated level of contract cancellations will ease. “Last month, Freddie Mac and Fannie Mae clarified that appraisals should be done by professionals with clear local expertise,” he said. “This should mitigate the situation of many valuations done by out-of-area appraisers coming in below the price negotiated between buyers and sellers. Hopefully, in the months ahead, we’ll see an even closer relationship between contract activity and closed transactions.”

McMillan said NAR is continuing to press the appraisal issue. “We have asked Congress and the Federal Housing Finance Agency to immediately implement an 18-month moratorium on the new appraisal rules to further address unintended consequences of the new guidelines,” he said.

Housing Affordability Index [2] remains very favorable. The affordability index stood at 159.2 in June, down from record peaks in recent months but it remains 36.6 percentage points above a year ago. Under these conditions the typical family would devote 15.7 percent of gross income to mortgage principal and interest, well below the standard allowance of 25 percent.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record dating back to 1970,” Yun said. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”

A median-income family, earning $60,700, could afford a home costing $289,100 in June with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford. The affordable price was much higher than the median existing single-family home price in June, which was $181,600.

Yun expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder footing and inventory is gradually being absorbed.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

2 The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for July will be released August 21; the next Pending Home Sales Index will be on September 1.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research

Real Estate Cyber Tips - August 2009

2009-08-01T23:58:00.003-04:00

CYBER MAGIC TRICKS

TRICK#1

FIGHT BACK ON CREDIT CARD FEES!
Have you received a note in the mail recently informing you of new terms? With all of the craziness going on it’s hard to keep up with how the credit card companies are grabbing our hard earned dollars with all sorts of new fees and charges.This neat place will help you make sense from the movin’ and shakin’ going on. They research thousands of credit card offers and rates and rate the best credit cards. They provide a list of the top cards in each of several credit card categories along with an unbiased opinion on every card. In addition they compile the "Complete Credit Card Index" where you will find the current rates of all of the thousand plus credit cards available. Good stuff in this day and age!
Click Here for This Cyber Trick

TRICK#2

MAKE THE WEB TALK TO YOU!
This one is fun and can come in handy from time to time. Once this little program is downloaded and installed, you simply highlight any text you see on your internet browser. Then just right click and choose "speak text" ---and Shazam – the text is spoken aloud from beginning to end!It's easy to use and gives you a personal reader any time you want to rest your eyes! Oh, and yes, it's on the house.
Click Here for This Cyber Trick

GREAT PLACES!

GREAT PLACE #1

GIVE YOUR DOCTOR A CHECKUP!
Do you have a great Doctor? Or maybe your last visit was a horror show. Here's the place to let folks know about the good ones and warn them about the clunkers. Just type in your Doctor's (or Dentist's) name, location and specialty (not all are necessity unless your Doctor has a very common name). Up comes information on the Doctor plus any patient ratings that have been entered regarding knowledge, helpfulness and punctuality. Even the Doctor's staff gets rated.There are lots of additional tools at this great place – and, unlike many similar sites, there is no cost to use this service. This is worth a bookmark!
Click Here for This Great Place

GREAT PLACE #2

CHECK HOLIDAYS AROUND THE GLOBE!
Traveling this year? Want to find out what the holidays and cultural events are at your destination? This neat resource lists over 200 counties along with a calendar of holidays celebrated there during the year. You can search for holidays and celebrations around the world in several categories including country or by date. These folks define a "holiday" as any day that recognizes a cultural event, and not necessarily a day when businesses are closed. You’ll be looking for this the next time you plan a trip!
Click Here for This Great Place

The information contained in Real Estate CyberTips is believed to be true and correct but no warranties or guarantees are provided and readers should rely solely on their own information and advisors in connection with any sites, services or products reviewed. All content Copyright 2009, RECS. All rights reserved.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Federal Reserve Beige Book Report July 2009 Report

2009-07-30T12:19:00.002-04:00

Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level. Five Districts used the words "slow", "subdued", or "weak" to describe activity levels; Chicago and St. Louis reported that the pace of decline appeared to be moderating; and New York, Cleveland, Kansas City, and San Francisco pointed to signs of stabilization. Minneapolis said the District economy had contracted since the last report.

Most Districts reported sluggish retail activity. Cleveland, Richmond, and Minneapolis noted further declines in sales, although results were somewhat mixed or positive according to retailers in the Boston, Philadelphia, St. Louis, Kansas City, and San Francisco Districts. Manufacturing activity showed some improvement in the Richmond, Chicago, and Kansas City Districts; while St. Louis and Dallas reported some moderation of declines; Philadelphia and Minneapolis saw activity decrease; and most other Districts indicated that manufacturing activity continued at low levels. Boston, Richmond, St. Louis, Minneapolis, and San Francisco reported contractions in services industries. Banking sectors in the New York, Cleveland, Richmond, St. Louis, Kansas City, and San Francisco Districts experienced weaker demand for some categories of loans. Residential real estate markets stayed soft in most Districts, although many noted some signs of improvement. By contrast, commercial real estate markets weakened further in recent months in two-thirds of the Districts and remained slow in the others.

Districts reported varied--but generally modest--price changes across sectors and products, with competitive pressures damping increases; however, Boston, Cleveland, Chicago, Minneapolis, and Dallas noted that some metals prices have increased in recent months. Most Districts indicated that labor markets were extremely soft, with minimal wage pressures, and cited the use of various methods of reducing compensation in addition to, or instead of, freezing or cutting wages.

In the Philadelphia (Third District) region, economic conditions remained subdued in July. Manufacturers, on balance, reported declines in shipments and new orders. Retailers gave mixed reports, although sales were not strong overall. Motor vehicle dealers indicated that sales of new vehicles were slow. Bank loan volume has increased slightly. Credit quality has continued to deteriorate. Residential real estate sales increased in June and July as pent-up demand and seasonal factors boosted sales, according to local real estate agents, but the sales rate remained below the year-ago pace. Nonresidential real estate investment, leasing, and construction activity continued to be slow. Business firms in the region reported level or falling input costs and output prices in July.

The outlook in the Third District business community was slightly more positive in July than at the time of the previous Beige Book, although most contacts see little prospect of strong improvement in the immediate future. Manufacturers forecast a rise in shipments and orders during the next six months. Retailers expect sales to gain strength slowly, but auto dealers expect sales to remain slow for the rest of the year. Bankers anticipate demand for credit to remain limited until overall economic conditions improve, and they expect further weakening in credit quality as well. Residential real estate contacts believe housing demand is stabilizing, although they say a substantial increase in sales is not imminent. Contacts in nonresidential real estate expect leasing and purchase activity to remain weak during the rest of this year and perhaps move up early next year.

Source Beige Book

Click here for the Federal Reserve July 2009 Beige Book [Beige Book Archives]

See related blog articles:
Federal Reserve Beige Book For Economic Conditions (What is the "Beige Book"?)
The Federal Reserve - Making Sense In Plain English

Existing-Home Sales Up Again

2009-07-23T15:59:00.000-04:00

Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors®(NAR).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.6 percent to a seasonally adjusted annual rate[1] of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.

Lawrence Yun, NAR chief economist, is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many Realtors® are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.”

A June survey of NAR members shows 37 percent experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality.

“Clearly the process needs to be revised, but the most logical approach is to use appraisers with local expertise, industry designations and access to local data, who make a physical examination of the property and use apples-to-apples comparisons with nearby home sales,” Yun said. “In many cases, normal homes are being compared with distressed homes sold at a discount, which often are in subpar condition – this is causing real harm to both buyers and sellers.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42 percent in June from 4.86 percent in May; the rate was 6.32 percent in June 2008. Mortgage interest rates have trended lower in recent weeks.

Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply[2] at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago.

“This is another hopeful sign – if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year,” Yun said.

An NAR practitioner survey in June showed first-time buyers accounted for 29 percent of transactions, unchanged from May, and that the number of buyers looking at homes is up nearly 12 percentage points from June 2008.

NAR President Charles McMillan said there are very good opportunities. “Despite some of the challenges, the housing market continues to demonstrate signs of recovery,” he said. “The temporary first-time buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact, but since it’s taking longer to close transactions, many would-be beneficiaries may not be able to take advantage of the credit before the December 1 expiration date. As a consequence, consumers need the expertise of Realtors® more than ever to navigate both the obstacles and opportunities in today’s market.”

The national median existing-home price[3] for all housing types was $181,800 in June, which is 15.4 percent below June 2008. Distressed properties, which accounted for 31 percent of sales in June, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Single-family home sales rose 2.4 percent to a seasonally adjusted annual rate of 4.32 million in June from a level of 4.22 million in May, and are 0.2 percent higher than the 4.31 million-unit pace a year ago. The median existing single-family home price was $181,600 in June, which is 15.0 percent below June 2008.

Existing condominium and co-op sales jumped 14.0 percent to a seasonally adjusted annual rate of 570,000 units in June from 500,000 in May, but are 3.1 percent below the 588,000-unit level in June 2008. The median existing condo price[4] was $183,300 in June, down 18.9 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 2.5 percent to an annual pace of 820,000 in June, but are 4.7 percent below a year ago. The median price in the Northeast was $249,400, down 5.9 percent from June 2008.

Existing-home sales in the Midwest increased 0.9 percent in June to a level of 1.10 million but are 1.8 percent lower than June 2008. The median price in the Midwest was $157,000, which is 9.1 percent below a year ago.

In the South, existing-home sales rose 4.0 percent to an annual pace of 1.81 million in June but are 3.7 percent below a year ago. The median price in the South was $163,200, down 11.9 percent from June 2008.

Existing-home sales in the West improved by 6.4 percent to an annual rate of 1.16 million in June, and are 11.5 percent higher than June 2008. The median price in the West was $214,800, which is 24.9 percent below a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: Any references to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.

1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.

3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

4Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for July will be released August 21. The next Pending Home Sales Index & Forecast is scheduled for August 4; release times are 10 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

IRS Reminds Taxpayers to Take Advantage of Recovery Act Benefits

2009-07-20T22:22:00.002-04:00

WASHINGTON — With 2009 now half over, the Internal Revenue Service (IRS) reminds taxpayers to take advantage of the numerous tax breaks made available earlier this year in the American Recovery and Reinvestment Act (ARRA).

The recovery law provides tax incentives for first-time homebuyers, people purchasing new cars, those interested in making their homes more energy efficient and parents and students paying for college. But all of these incentives have expiration dates so taxpayers should take advantage of them while they can. (Source: IRS IR-2009-67)

Full Story...

Housing Starts and Permits Up Sharply In June

2009-07-17T22:37:00.000-04:00

July 17, 2009 - Nationwide housing starts and permits posted substantial gains in June as home builders responded to improved market conditions and the impending expiration of the first-time buyer tax credit, according to data released by the U.S. Commerce Department today. Commerce reported a 3.6 percent gain in overall housing starts to a seasonally adjusted annual rate of 582,000 units and an 8.7 percent gain in permit issuance to 563,000 units.

“The upcoming expiration of the first-time home buyer tax credit on December 1st is encouraging some builders to get homes started now so that they can be completed in time for clients to take advantage of this attractive buying incentive,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “However, there is still much concern about the difficulty of financing new-home production and continuing weakness in the job market.”

“Today’s report was in keeping with our forecasts for some glimmers of improvement on the single-family side in the second quarter, and also with the results of our latest builder surveys,” said NAHB Chief Economist David Crowe. “Many remain very cautious, however, in the face of the severe tightening of credit for acquisition, development and construction financing and increased instances of low appraisals tied to improper use of distressed properties as comps, both of which threaten to derail a housing and economic recovery going forward.”

Single-family housing starts rose for a fourth consecutive month in June, posting a 14.4 percent gain to a seasonally adjusted annual rate of 470,000 units, while single-family permits rose for a third consecutive month, posting a 5.9 percent gain to 430,000 units. Meanwhile, the multifamily side, which characteristically displays greater month-to-month volatility, posted a 25.8 percent decline in starts following an unsustainably large gain in the previous month, to 112,000 units. Multifamily permits rose 18.8 percent to 133,000 units from an abnormal low in May.

Regionally, housing starts were mixed, with the Northeast and Midwest posting big gains of 28.6 percent and 33.3 percent, respectively, and the South and West posting declines of 1.4 percent and 14.8 percent, respectively. However, the declines in both the South and West were entirely driven by dips in multifamily production.

Permit issuance was up across the board in June, with the Northeast posting a 5.4 percent gain, the Midwest a 3.4 percent gain, the South a nearly 14 percent gain and the West a nearly 2 percent gain.

Source: NAHB

Downpayment, Closing Costs Still Greatest Obstacles to Homeownership, NAR Survey Shows

2009-07-10T22:33:00.000-04:00

Most Americans still consider having enough money for downpayment and closing costs to be the biggest obstacles to buying a home. That’s according to the 2009 National Housing Pulse Survey, an annual survey released today by the National Association of Realtors®(NAR).

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in seven years of sampling. Two-thirds of Americans think job layoffs and unemployment are a big problem; eight in 10 cite these issues as a barrier to homeownership.

“Homeownership is an investment in your future; however, saving for a downpayment and closing costs is still too great of an obstacle for 82 percent of house hunters looking to take advantage of the current market,” said NAR President Charles McMillan. “Monetizing the $8,000 first-time buyer tax credit for downpayment or closing costs on FHA-insured mortgages is a positive first step. Our hope is that the tax credit will be extended and expanded to all home buyers and will help bring stability to the housing market and enable more Americans to achieve the dream of homeownership."

Despite the challenges with the economy and housing market, 83 percent of Americans still believe buying a home is a good financial decision. Three-fourths of those surveyed also believe now is a good time to buy a home, a number that has increased steadily the past two years. In fact, one-third of renters are thinking more about buying a home than they were a year ago.

While Americans are seeing more stability in the real estate market, uncertainty persists. The number of those who feel buying and selling activity has stabilized or stayed nearly the same has grown significantly, from 18 percent last year to 26 percent this year. However the majority (58 percent) report that activity in their market has slowed.

Regarding home sales, nearly eight in 10 say it’s harder to sell a home in their area today than it was a year ago, despite the fact that nearly three-fourths of respondents say home prices are less expensive. Large home inventories could be to blame; 44 percent cite concerns about the high number of homes and condos for sale in their area.

While nearly three-fourths of Americans are concerned about the local drop in home values, respondents expect to see more stability in the near future. Nearly seven in 10 expect local home prices to remain about the same in the next three months; only 18 percent expect prices to further decrease. The drop in prices has improved affordability, and consequently, concerns about the lack of affordable housing are the lowest they’ve been in seven years of polling – 34 percent say it’s one of their biggest worries, down from 41 percent two years ago.

Foreclosures remain a real concern among survey respondents. Slightly more than half (51 percent) say foreclosures are a big to moderate problem in their area. However, the rate of foreclosures is generally seen as stabilizing; 41 percent say the rate of foreclosures in their area is about the same as last year.

Ninety-two percent of respondents said neither they nor members of their immediate family have experienced a foreclosure in the past year, yet it is still a personal concern for many. One in five respondents said they are very or fairly worried that they will have difficulty making their mortgage payments over the next year. Thirty-two percent say it’s a big or moderate worry that they, or a member of their family, may have their home repossessed or foreclosed because they are unable to pay rising monthly mortgage payments.

In 2008, more than half of respondents (54 percent) were open to the federal government taking a more active role in overseeing mortgage and lending practices – the number dropped this year to 47 percent. This could be because 42 percent of Americans believe the country is back on the right track, more than double the number last year (16 percent).

Regarding financing, seven in 10 Americans cite a lack of confidence in their ability to be approved for a home loan as an obstacle to homeownership. The same number also say that banks are making it too hard to qualify for a loan (71 percent) and that fewer mortgage options offered by banks have made it harder for them to buy a home (71 percent). The perception of qualifying for a loan as a huge obstacle is especially high among minorities.

“Home buyers need protection from risky lending products but also need access to mortgages at a reasonable cost. While there has been some easing of credit in the mortgage market, the availability of credit continues to be an issue for many qualified home buyers,” said McMillan.

The 2009 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program. The telephone survey was among 1,250 adults living in the 25 most populous metropolitan statistical areas. The study has a margin of error of plus or minus 3.1 percentage points.

NAR’s Housing Opportunity Program, www.realtor.org/housingopportunity, was created in 2002 to encourage local Realtor® associations to create initiatives aimed directly at increasing housing opportunities available to consumers and making affordable housing more readily available in their communities.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

Summertime Tax Tips Available on IRS.gov and Via E-Mail

2009-07-07T22:18:00.000-04:00

WASHINGTON — The Internal Revenue Service (IRS) is publishing summertime tax tips to provide useful and concise advice on topics that affect taxpayers.

Many people don’t think about their taxes until the start of the filing season in January. That can be a mistake. Steps such as checking your withholding, getting the proper receipts from charities, organizing all the records you will need or setting a personal tax strategy that can save money at tax time are most effective if they are done well before year’s end.

The IRS is publishing three tax tips per week this summer. Topics range from how parents can get credit for sending their kids to day camp to protecting yourself from identity theft.

Now you can receive IRS Tax Tips via e-mail as soon as they are published by signing up through the IRS e-news subscription page, e-News Subscriptions. When subscribing, a confirmation message will be sent via e-mail. Verification must be sent in response in order to confirm a subscription.

Reference: IRS IR-2009-64

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Public-Private Investment Program Losing Steam: Wary Banks Hobble Toxic-Asset Plan

2009-07-03T22:27:00.003-04:00

The government's plan to enable banks to dump troubled assets is facing troubles of its own. Markets initially rallied when Treasury Secretary Timothy Geithner announced in March a two-pronged plan to offer favorable government financing to entice investors to buy bad loans and toxic securities from banks. But that initiative -- called the Public-Private Investment Program, or PPIP -- has lost momentum... (Source: WSJ)

Full Story

Pending Home Sales Record Fourth Straight Monthly Gain

2009-07-02T16:47:00.000-04:00

Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index,[1] a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

The Pending Home Sales Index in the Northeast rose 3.1 percent to 80.9 in May and is 6.8 percent above a year ago. In the Midwest the index slipped 1.3 percent to 89.2 but is 11.4 percent above May 2008. The index in the South declined 1.7 percent to 92.6 in May but is 7.9 percent higher than a year ago. In the West the index rose 2.2 percent to 96.9 and is 0.7 percent above May 2008.

NAR President Charles McMillan said the appraisal issue is complicated. “We see that distressed homes often are selling for 20 percent less than normal homes in the same area, but some appraisals don’t distinguish between traditional homes and distressed property,” he said. “In many cases appraisers from outside the area are being used, but as everyone knows real estate is local and appraisals should be done by an expert with local expertise.”

McMillan said sellers shouldn’t hesitate to speak with an appraiser about their home. “Sellers should feel free to tell an appraiser about improvements and renovations to their home, and how it compares with other homes in the neighborhood,” he said.

“Also, if recent sales in the neighborhood were discounted, but not similar to your home in terms of quality or condition, that should be pointed out. It wouldn’t hurt to put all this in writing, especially if an appraiser is not familiar with your area. A Realtor® could offer guidance and information to help you with this process.”

NAR’s Housing Affordability Index [2] remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.

The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.

Existing-home sales should trend up through the end of the year, with normal local market differences. “The big question is how much the appraisal issue will impact the ability of contracts to go to closing,” Yun said. “We are currently conducting a study to assess the degree to which new appraisal rules are impacting home sales.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

2The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for June will be released July 23; the next Pending Home Sales Index will be on August 4.