Tampa Bay Real Estate News

Selling a rented home can pose challenges

2012-01-25T16:31:00.002-05:00

NORTH BETHESDA, Md. – Jan. 25, 2012 – Some homeowners turned into reluctant landlords and rented out their homes to earn extra income while the housing market was sluggish. But now some of these homeowners are ready to sell.

However, real estate agents often caution clients that trying to sell a home when a tenant still lives there can be tricky since many renters – who have no financial stake in the matter – aren’t always so eager to help market a home and keep it tidy and neat on their landlord’s behalf.

Nevertheless, “it’s pretty common in this market to be selling a home with a tenant in it,” Chris Hager, a real estate professional with Long & Foster Real Estate in North Bethesda, Md., told the Washington Times. “There are lots of reluctant landlords out there who opted to rent their property rather than sell it, and now they want to put it on the market. There’s the potential for conflict between the tenant and the landlord, especially if it was not made clear to the tenant from the beginning that the owners wanted to sell.”

Landlords should make a point to clearly communicate their intentions to sell, and not “sneak” the house on the market without telling the tenants first, real estate professionals say.

Landlords might want to offer a concession on the rent to tenants in exchange for them keeping the home in clean, good condition while it’s on the market – such as 10 percent off each month’s rent while it’s on the market. But be sure to communicate expectations for cleanliness, such as keeping the dishes out of the sink and making the bed. Experts also suggest setting established hours for showing the property to make it easier on the tenant.

“You never get a second chance to make a first impression, so it is particularly important to have the place in strong showing shape on the first and second weekends on the market,” says Nick Pasquini, broker-owner of Century 21 Redwood Realty in Washington, D.C., and Arlington and Ashburn, Va.

3 ways to sell a home that’s not selling

2012-01-20T16:15:00.002-05:00

NEW YORK – Jan. 20, 2012 – Surveys suggest that a high number of real estate deals are falling apart due to financing issues, and today’s sellers might need to get creative if they want their property to sell. Options to consider:

• Sellers could back a second mortgage for the buyer at an amount that enables the buyer to meet the lender’s downpayment requirements, providing the lender agrees.

• Sell the home “subject to the existing mortgage,” which means the buyers take over the sellers’ existing mortgage payments for a specified time, after which time they must obtain a new loan. This arrangement relieves sellers of their mortgage debt and helps buyers with credit scores too low secure a traditional loan. And while it forces buyers to get a mortgage as specified in the contract, experts say banks will not foreclose if payments are made on time.

• Sellers willing to finance the sale can unload properties for a low downpayment by adding a sweat equity clause to the contract, which requires the buyers to bring the home into tip-top shape. The renovation details are written into the contract, and buyers must complete the repairs by the agreed-upon date to qualify for long-term seller financing.

Source: RealtyBizNews (01/16/2012) Robinson, Donna

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

Related Topics: Seller services

New-Home Construction Bounces Back, Soars 9.3%

2011-12-20T18:54:00.002-05:00

New-home construction and building permits — a future gauge of construction — surged last month, slowly helping to pull the new-home market out of one of its worst years for home building.

Builders broke ground on more homes in November, a 9.3 percent increase over October, reaching the highest level since April 2010, the Commerce Department reported Tuesday. Year-over-year, new-home starts were up 24.3 percent in November.

Home construction increased to a seasonally adjusted annual rate of 685,000 homes in November. However, while it’s an improvement, the rate is still below the 1.2 million home pace that economists consider healthy for the new-home sector.

November’s increase was mostly driven by construction of multi-family homes with at least two units, which soared 25.3 percent in November. Construction of single-family homes increased 2.3 percent for the month.

Building permits jumped 5.7 percent in November, the highest increase since March 2010, with the increase mostly driven by apartment construction permits.

Builders Feeling More Confident
Meanwhile, for the third consecutive month, builder confidence in the new-home market continued to edge up, according to the National Association of Home Builders/Wells Fargo Housing Market Index for December. The index is at its highest point since May 2010.

While the index reached 21 in December, it is still far below 50, a reading which indicates more builders view conditions as good rather than poor. The index hasn’t reached that point since the housing boom in April 2006.

“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving."

Source: “Apartment Construction Spurs 9.3% Jump in Housing Starts, But Level Remains Low,” Associated Press (Dec. 20, 2011); “U.S. Nov. Housing Starts +9.3% to 685K; Consensus +0.3%,” Dow Jones International News (Dec. 20, 2011); and National Association of Home Builders

Read More:
New-Home Building Soars 15% in September

NAR: Gradual recovery for housing and economy in 2012

2011-11-15T20:39:00.002-05:00

ANAHEIM, Calif. – Nov. 15, 2011 – Although the housing market struggled to maintain an even footing in 2011, gradual improvement is expected in 2012 and beyond, according to projections at the 2011 Realtors® Conference & Expo.

Lawrence Yun, chief economist of the National Association of Realtors (NAR), said home sales should be stronger. “Tight mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently,” he said. “Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely. This demand could quickly stimulate the market when conditions improve.”

Yun projects growth in Gross Domestic Product to be 1.8 percent this year, then rising moderately at a rate of 2.2 percent in 2012. With job growth of 1.7 to 2.2 million next year, the unemployment rate is expected to decline to 8.7 percent by the second half of 2012. Mortgage interest rates should gradually rise from recent record lows and reach 4.5 percent by the middle of 2012.

“Housing affordability conditions, based on the relationship between median home prices, mortgage interest rates, and median family income, have been at a record high this year,” Yun said. “Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. Our hope is that credit restrictions will ease and allow more homebuyers to take advantage of current opportunities.”

Existing-home sales are forecast to edge up about 1 percent this year, and then rise another 4 to 5 percent in 2012. Based on NAR’s current projection model, existing-home sales would total 4.96 million in 2011.

Housing data

NAR says it is benchmarking its existing-home sales statistics, and it expects total sales to be lowered for recent years. However, it doesn’t expect many changes to previously reported percentage comparisons, median prices or the month’s supply of inventory. NAR expects to publish its improved measurement methodology soon.

“NAR began its normal process for benchmarking sales at the beginning of this year in consultation with government agencies, outside housing economists and academic experts,” NAR said in a release. “There will be no notable change to previous characterizations of the market in terms of sales trends, monthly percentage changes, etc.”

In the 2010 U.S. Census, the government stopped reporting home sales data, which NAR used as a benchmark. As a result, the association had to develop a new independent score to use as a baseline for its calculations. Preliminary data using the new benchmark will “undergo broad review shortly by professional economists and government agencies. After any issues that may surface in the review process are addressed, we will update monthly seasonal adjustment factors and publish revisions.”

Housing forecast

New-home sales are expected to be a record low 302,000 this year, rising to 372,000 in 2012. Housing starts are forecast to rise to 630,000 next year from 583,000 in 2011.

“Although a double-digit growth in new-home sales and housing starts sounds encouraging, the projections remain historically soft relative to long-term underlying demand,” Yun explained.

With falling inventory, the median home price should rise in 2012. “Home prices have yet to show a definitive stabilization pattern in most areas. Still, given an over-correction in prices, there likely will be moderate appreciation in 2012,” Yun said. “Once home prices turn positive on a sustained basis, consumer confidence will rise and help the broader economy to improve,” Yun added.

Richard Peach, senior vice president at the Federal Reserve Board of New York, said the economy is under-performing. “Nearly two-and-a-half years since the end of ‘the great recession,’ the economy continues to operate well below its potential,” he said. “Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level.”

Peach said the current business cycle remains 7 percent below its peak and is longer than other recession cycles since 1953. He added the employment to population ratio is historically low, and there’s been a shift in the distribution of income, with corporate profits up strongly while employment compensation is down.

Peach believes there is a sizeable level of shadow inventory that will result in rising foreclosures. “My idea is to allocate certificates to 2.5 million service members who served in Afghanistan and Iraq that could be used as a downpayment on a foreclosed home in the Fannie or Freddie portfolio,” he said.

© 2011 Florida Realtors®

7 Cities With Fewest Underwater Home Owners

2011-11-01T14:45:00.002-04:00

DAILY REAL ESTATE NEWS | TUESDAY, NOVEMBER 01, 2011
Rochester, N.Y., has the fewest number of homes underwater in the country, according to an analysis by 24/7 Wall St., which culled CoreLogic data to recently identify the housing markets with the fewest number of underwater home owners.

Nationwide, 11 million households are considered underwater—meaning they owe more on their mortgage than their home is currently worth.

Here are the cities that are countering that trend and have the fewest number of underwater home owners, according to 24/7 Wall St.:

1. Rochester, N.Y.
Percentage of homes underwater: 3.41%
Home price change in last year: +0.25%

2. El Paso, Texas
Percentage of homes underwater: 3.89%
Home price change in last year: +5.73%

3. Albany-Schenectady-Troy, N.Y.
Percentage of homes underwater: 4.01%
Home price change in last year: -0.90%

4. Buffalo-Niagara Falls, N.Y.
Percentage of homes underwater: 4.22%
Home price change in last year: 3.92%

5. Fayetteville, N.C.
Percentage of homes underwater: 4.56%
Home price change in last year: +1.14%

6. Huntsville, Ala.
Percentage of homes underwater: 5.30%
Home price change in last year: -4.39%

7. Lancaster, Pa.
Percentage of homes underwater: 5.44%
Home price change in last year: -1.83%

See which other cities made the list.

Source: “10 Cities Where Mortgages Are Staying Afloat,” AOL Real Estate (Oct. 28, 2011)

Read More:
Survey Reveals Top 8 Best Places to Live

Homeownership is Highest on Record

2011-10-25T14:54:00.000-04:00

WASHINGTON – Oct. 25, 2011 – The homeownership rate is at its second-highest level on record, only behind the record high set in 2000, according to the U.S. Census Bureau, which began collecting homeownership data in 1890.

By region, the homeownership rate is:

• Midwest: 69.2 percent
• South: 66.7
• Northeast: 62.2
• West: 60.5

Nearly every metro area had more homeowners than renters in 2010. The metro areas with the highest homeownership rates were in Michigan and Florida. Monroe, Mich., had the highest percentage of owner-occupied units at 79.8 percent, followed by Punta Gorda, Fla., at 79.7 percent.

While the national homeownership rate remained high, the decrease in the rate from 2000 to 2010 by 1.1 percent – to 65.1 percent overall – is the largest decrease since the 1930 to 1940 period, the Census Bureau reported.

States with highest housing inventory

Meanwhile, housing inventory soared 13.6 percent to 15.8 million units from 2000 to 2010, growing the fastest in the South and West. The states with the largest percentage increase in housing units were:

Nevada: 41.9 percent
Arizona: 29.9
Utah: 27.5
Idaho: 26.5
Georgia: 24.6
Florida: 23.1
North Carolina: 22.8
Colorado: 22.4
Texas: 22.3
South Carolina: 21.9

Source: U.S. Census 2010 and “Homeownership Near Record,” Investors.com (Oct. 20, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

30% of buyers denied or give up on mortgage

2011-10-10T19:08:00.001-04:00

WASHINGTON – Oct. 10, 2011 – Credit has gotten tighter, and more buyers are being left out – or becoming so frustrated they give up. Last year, more than 2 million people were turned down for mortgages, according to the Federal Financial Institutions Examination Council.

About 30 percent of buyers are either denied a mortgage, or they drop out of the application process, the Mortgage Bankers Association estimates.

Biggest reasons for rejection:

• Insufficient income: Buyers cannot afford a $1 million home if they make $50,000 per year.

• Credit details. There are a lot of rules, and it’s not easy to understand what a bank wants. Overtime income, for example, only counts if documented for at least two years to some lenders. Rental income may only count if the borrower has a 30 percent equity stake in the building.

• Bad credit. If a credit score is somewhere around 620 to 660, depending on the bank, lenders say no almost automatically.

• Appraisals. If an appraisal is lower than an agreed-upon selling price, the lender balks.

• External problems. A lender could nix an application if the homeowners’ association has issues or the neighborhood has problems.

• Incomplete information. Paperwork problems – incomplete information, missing forms, etc. – bog down about 12 percent of applications.

And “it’s common to get turned down if you have a gap in employment history over the last two years,” says Erin Lantz, director of the Zillow Mortgage Marketplace.

Source: “Triggers for Rejection,” The New York Times (Oct. 6, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

10 States With the Highest Foreclosure Rates

2011-09-15T14:55:00.003-04:00

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 15, 2011
For the 56th straight month, Nevada continued to have the highest foreclosure rate in the country, where one in every 118 homes received a foreclosure filing during August, according to the latest figures from RealtyTrac.

Nationally, 1 in every 570 households received a foreclosure filing in August.

Meanwhile, five states accounted for 53 percent of the foreclosure activity in August, led by California. In California, 59,383 properties received foreclosure filings last month. The state saw a 55 percent month-over-month increase in default notices.

The following are the states that posted the highest foreclosure rates in August, according to RealtyTrac’s latest report:

1. Nevada

One in every 118 households received a foreclosure filing during August.

Total foreclosure filings in August: 9,677

2. California

One in every 226 households

Total foreclosure filings in August: 59,383

3. Arizona

One in every 248 households

Total foreclosure filings in August: 23,569

4. Georgia

1 in every 346 households

Total foreclosure filings in August: 11,743

5. Idaho

1 in every 348 households

Total foreclosure filings in August: 1,860

6. Michigan

1 in every 349 households

Total foreclosure filings in August: 13,016

7. Florida

1 in every 376 households

Total foreclosure filings in August: 23,569

8. Illinois

1 in every 424 households

Total foreclosure filings in August: 12,493

9. Colorado

1 in every 439 households

Total foreclosure filings in August: 4,933

10. Utah

1 in every 450 households

Total foreclosure filings in August: 2,119

By REALTOR® Magazine Daily News

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Mortgage Defaults Soar 33%, Biggest Monthly Gain in 4 Years

Where Home Prices Have Dropped the Most

2011-09-09T12:29:00.000-04:00

California cities have seen their home values drop by the largest percentage in the last five years, with some metro areas posting losses of up to 67 percent in that time period. California cities occupied six of the top 10 metro areas with the largest drops, according to a recent Zillow study based on its home-value estimates and Zillow Home Value Index.

Overall, "there will be many ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest,” says Stan Humphries, Zillow’s chief economist. “There are still hazards in the form of a full foreclosure pipeline, high negative equity, and fluctuations in demand."

The following are seven cities that have seen home values drop the most since the housing boom, according to Zillow:

1. Merced, Calif.

July 2011 Zillow Home Value Index: $106,514

Zillow Home Value Index 5 Years ago: $328,813

Value difference (by percent): -67.6%

2. Modesto, Calif.

July 2011 ZHVI: $128,777

ZHVI 5 Years Ago: $352,599

Value difference: -63.5%

3. Stockton, Calif.

July 2011 ZHVI: $150,061

ZHVI 5 Years Ago: $404,036

Value difference: -62.9%

4. Las Vegas

July 2011 ZHVI: $117,084

ZHVI 5 Years Ago: $303,656

Value difference: -61.4%

5. Vallejo, Calif.

July 2011 ZHVI: $190,521

ZHVI 5 Years Ago: $468,071

Value difference: -59.3%

6. Salinas, Calif.

July 2011 ZHVI: $282,289

ZHVI 5 Years Ago: $664,404

Value difference: -57.5%

7. Daytona Beach, Fla.

July 2011 ZHVI: $95,193

ZHVI 5 Years Ago: $220,436

Value difference: -56.8%

See what other cities made it in the top 10 list.

Source: “Five Years After Housing Market Peak, Bumpy Road Toward Stabilization Underway As Home Values Show Recent Rise in Many Markets,” Zillow (Aug. 9, 2011) and “10 Real Estate Markets With the Largest 5-Year Drop in Home Values,” Inman News (Sept. 8, 2011)

Read More

Zillow: Market to Reach Bottom Possibly by 2012

White House Weighs Mass Refinancing Plan

2011-08-25T15:57:00.002-04:00

DAILY REAL ESTATE NEWS | THURSDAY, AUGUST 25, 2011
The White House is considering a housing proposal that would allow millions of home owners with government-backed mortgages to refinance into lower interest rates, The New York Times reports.

“A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere,” an article in The New York Times notes.

Many home owners have been unable to take advantage of today’s low interest rates — which are averaging around 4 percent — because they don’t qualify for refinancing at the best rates since they owe more on their home than it is currently worth or because of poor credit. The refinancing plan is still under discussion of how it would work, The New York Times said.

“This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing,” Christopher J. Mayer, an economist at the Columbia Business School, told The New York Times.

The White House is also considering other options to try to stimulate the housing market or save home owners from foreclosure. Such options include more changes to its refinancing programs so more home owners can participate or a home rental program to that would rent out foreclosures instead of putting them for sale so foreclosures would stop weighing down overall home prices.

Source: “U.S. May Back Refinance Plan for Mortgages,” The New York Times (Aug. 24, 2011)

Bank: ‘We’ll reduce your loan, you share future appreciation'

2011-07-28T14:42:00.001-04:00

NEW YORK – July 28, 2011 – Ocwen Financial Corp., a servicer of residential mortgages, launched a new loan modification program to reduce the principal on a mortgage for delinquent borrowers, but the borrowers must agree to let loan investors share in future appreciation of the home’s value when the market recovers.

Through the Shared Appreciation Modification program (SAMs), Ocwen will write down the principal of the loan to 95 percent of the home’s current market value. The amount written down will then be forgiven in one-third increments over a three-year timespan, as long as the homeowner remains current on the modified mortgage.

Then, “when the house is later sold or refinanced, the borrower must share 25 percent of the appreciation with the investors that own the loan; borrowers keep 75 percent of the gain,” the company notes.

Loan modifications will be available only to homeowners in negative equity.

“Like all modifications, SAMs help homeowners avoid foreclosure. But they also restore equity,” says Ocwen CEO Ronald Faris in a public statement about the program. “That’s a significant benefit to the customer and, we believe, the economy and housing market. Psychologically, it’s important too. Our analytics tell us that an underwater mortgage is one-and-a-half to two-times more likely to default than one with at least some positive equity.”

The program, which is expected to be rolled out into 33 states, is one of the first principal reduction programs started by a private company.

Source: “Ocwen Unveils New Principal Reduction Program,” HousingWire (July 26, 2011) and “Ocwen Offering Mortgage Modifications That Restore Equity for Underwater Borrowers,” GlobeNewswire (July 26, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

Second chance for owners who lost homes

2011-07-11T14:42:00.003-04:00

WASHINGTON – July 11, 2011 – More than 2 million homeowners who were foreclosed on or were in the process of a foreclosure during 2009 or 2010 can now ask for a review of their case, banking regulators announced this week. Banking regulators say ex-homeowners who might be eligible will receive a letter from their lender explaining their rights.

The move is to help identify homeowners who may have been improperly foreclosed upon, Julie Williams, chief counsel of the Office of the Comptroller of the Currency, said at a congressional hearing.

Homeowners who ask for the review will receive a letter explaining their rights.

Mortgage servicers will hire independent auditors to conduct reviews of the cases and determine if homeowners should receive financial compensation if the foreclosures were not done properly. They will also look for borrowers who were denied loan modifications when they may have been eligible for one.

The reviews are part of the mortgage servicer requirements called for by regulators after an investigation last fall revealed improper foreclosure practices by banks. Banks have until Wednesday to submit plans to the OCC on how they plan to revamp foreclosure practices.

Source: “Foreclosed Home Owners May Seek Case Reviews,” USA Today (July 8, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

Adding office could increase home value

2011-07-08T14:45:00.002-04:00

PHILADELPHIA – July 8, 2011 – Remember when the “experts” said that most Americans would telecommute from home offices to work every day?

Hasn’t happened, although ever-evolving technology has made the notion more viable. Think laptops, netbooks, printers, smartphones, and tablets, networked through a wireless router to a high-speed Internet connection.

Thanks to wireless technology, you don’t even need a physical home office – although if you are counting on an income-tax deduction, the IRS requires that space be dedicated to that purpose.

Don’t need the deduction? Then “the home office is everywhere,” said Steve Melman, director of economic services at the National Association of Home Builders.

About 2 percent of U.S. workers – the self-employed and unpaid volunteers excluded – consider home their primary workplace, the Telework Research Network says. It estimates that 20 million to 30 million people work from home at least one day a week.

That’s hardly everyone, though it is more than the Bureau of Labor Statistics’ 2001 figure of 19.5 million.

Two additional factors have had a huge effect on the number of home offices: the flagging economy and an overall demand for affordability that has resulted from it.

Members of the home builders’ group were surveyed at the end of 2010 about what new homes might look like in 2015, Melman said.

The consensus: Homes will be smaller, and “people will be looking for real value, with the walk-in closet and the laundry room at the very top of the list of features.” Most future homebuyers (read: younger buyers) will use the portability of electronic devices to “make the most of less square footage.”

That’s a far cry from the home-office-as-emerging-trend of the 1990s, when telecommuting depended on having a work space that could accommodate, in addition to desk and chair, a telephone, a desktop computer, a modem, a printer, a file cabinet and storage for floppy disks (remember those?).

When the need for data speed overwhelmed standard wiring, Category 5, an advanced system providing Internet access at speeds 200 times faster, required owners of older homes to rip open walls to upgrade their service. Newly built homes had the less expensive advantage, until wireless technology leveled the playing field.

Today, for about $60, a single-band wireless router allows you to create a building-wide network of computers, printers, and other devices linked to a single Internet source – a cable modem.

Access to the router can be made secure within the network, so you can do online financial transactions safely. Some cable-modem providers offer free antivirus software that can be downloaded to each computer through the network. Every computer can be networked through a single printer, wireless or not.

But all routers are not created equal, and online shopping is a good idea. An excellent guide can be found at http://is.gd/lggFIj. Most manufacturers offer free upgrades to their firmware, the internal programs that run these devices, so keep in touch with their websites.

If you run a business from home, or take a lot of work home, you probably will want dedicated space somewhere – a quiet somewhere. Design the space for yourself, keeping the costs within a reasonable budget, rather than with resale in mind.

In 2007, Remodeling magazine’s annual Cost vs. Value report said a home-office renovation would return 56.1 percent of your investment at sale time. This year, that was down to 45.8 percent.

If you’ll be working for long periods in your home office, think ergonomically. A good source of information about furniture and design is at http://is.gd/epQjQA. Lighting a home office is tricky. The American Lighting Association offers tips at http://is.gd/l8GUls.

You’ll need plenty of grounded electrical outlets and a surge protector for your equipment – one with a high joule rating (the higher the rating, the longer protection will last) – with phone-line and coaxial-cable jacks, too. Get a printer with copier, fax, and scanner functions.

Choice of computer is up to you – shop for the best deal, warranty protection, and service guarantee. If you will be doing a lot of conferencing from your home office, a Web camera is a must.

Depending on how much data are involved in your job, an external hard drive of 250 gigabytes or more should be weighed against online backup for a fee, as discussed in PC magazine at http://is.gd/XZr601.

The problem with technology, of course, is that it evolves faster than our thinking about how to use it. “Remember, even the computer experts had no idea what to do with email,” Melman said.

Copyright © 2011

The Better Bargain: Foreclosure or Short Sale?

2011-06-28T15:38:00.000-04:00

Short sales and foreclosures have flooded the housing market in recent years, and buyers are often drawn to the bargain prices but may be hesitant to jump into what usually is a difficult transaction and a long process.

Bankrate.com recently tackled the question of “Which to Buy: Short Sale or Foreclosure?” in an article that helps buyers weigh the pros and cons of a distressed property. Experts note that the question largely depends on buyers' situations, how quickly they need a home, and their tolerance for fixer-uppers.

Foreclosure Pros and Cons
Buying a foreclosure is often faster than purchasing a short sale. Plus, buyers often can negotiate closing costs and price in foreclosure sales, Elaine Zimmermann, a real estate investor in Memphis, Tenn., told Bankrate.com.

However, abandoned homes in foreclosure can deteriorate very quickly so the buyer may need to weigh the condition of the home and whether they want a fixer upper. Scarred walls and carpets and appliances that were damaged by the former owner are not uncommon in a foreclosure, says David Richardson, an inspector in the Detroit area who's certified by the American Society of Home Inspectors.

Short Sales Pros and Cons
A short-sale home is still owned by the occupant, so it tends to be in better condition than a foreclosure, experts say.

"The short sale is, in my opinion, far better than buying a foreclosure because the home is generally in better condition because it's been occupied," says Gwen Daubenmeyer, a certified distressed property expert with RE/MAX in Detroit. "The utilities have been maintained, usually the lawn is maintained, those kinds of things."

But short sales often can take a longer time than a foreclosure to close. However, the federal Home Affordable Foreclosure Alternatives program, or HAFA, may be able to help speed up the short-sale process since it has created a timeline to hold mortgage lenders accountable, but still “it’s not perfect by any means,” Daubenmeyer says.

Source: “Which to Buy: Short Sale or Foreclosure?” Bankrate.com (June 2011)

Which Vehicles Come Out on Top for Quality?

2011-06-27T15:43:00.002-04:00

Lexus tops the list this year as the best brand for vehicles, according to the 2011 J.D. Power and Associates’ Initial Quality Study. Lexus’ LS sedan had the fewest reported problems of any vehicle in the first 90 days of ownership, the study found.

“Expected reliability continues to be the single-most-important reason why new-vehicle buyers choose one model over another," says David Sargent, vice president of global vehicle research at J.D. Power and Associates.

The Top 7 Vehicles

Here are the top ranked vehicles from J.D. Power and Associates’ 2011 Nameplate Initial Quality Study.

1. Lexus
2. Honda
3. Acura
4. Mercedes-Benz
5. Mazda
6. Porsche
7. Toyota

The Lowest Ranked Vehicles

Overall, "automakers are tweaking their engines and transmissions to maximize fuel economy, but their experiments have taken their toll in terms of the driving experience and quality ratings are suffering as a result,” Michelle Krebs, Edmunds.com senior analyst, told USA Today.

The brands that scored the worst for quality in the study were:
Dodge
Mitsubishi
Suzuki

View more of the study’s vehicle rankings at USA Today.

Couple Served Foreclosure Notice Via Facebook

2011-06-22T20:30:00.000-04:00

For lenders who can’t find a defaulting home owner, they may turn to Facebook or other social networking sites to track them down. That’s what a lender in Australia did. The lender used Facebook to track the defaulting couple down and send them a foreclosure notice via the social networking site, AOL Real Estate reports.

The lender was unable to find a physical address or e-mail for a couple in Australia who defaulted on their six-figure mortgage. So the lender’s lawyer located them on Facebook, verifying the couple’s identities by matching up names, birthdates, and the fact that they “friended” one another.

Australian courts recently upheld the lender’s right to use Facebook to send foreclosure notices. The court ruled that the couple didn’t have any privacy protections on their Facebook accounts and were frequent visitors so it served as a reasonable way to send a notice.

While industry experts say they haven’t heard of lenders sending foreclosure notices via social networking sites in the United States, “it’s bound to happen,” Marc Rotenberg, president of the Electronic Privacy Information Center in Washington, told AOL Real Estate. "The real concern the courts have is whether it's a fair notice that the person actually receives."

As long as it’s obvious the person is a frequent user of the site, legal experts say the ability to serve foreclosure documents via social network sites seems like a justifiable way to send a foreclosure notice.

Source: “Your Facebook Status: Foreclosed,” AOL Real Estate (June 17, 2011)

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Friend Power: Less Is Definitely More

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Why Home Sales Will Rise This Year

2011-06-10T11:33:00.000-04:00

Why Home Sales Will Rise This Year

The first quarter ended with decent home sales activity, but the rest of the year should be even better. Here's why.
By Lawrence Yun

The first quarter ended with decent home sales activity, with existing homes selling at an annualized pace of 5.1 million. The remainder of the year should be better still for the following reasons:
More jobs
Rising stock market wealth
Rising apartment rents
Continuing high affordability conditions
Home values at historically justifiable levels
Investors looking to hedge against inflation
Foreigners buying U.S. homes on the cheap

Other potential contributing factors, although they’re not happening yet, are huge bank profits translating into more desire to lend and some reduction to market friction as lenders’ short sale approval processes improve and appraisals become less of an issue.

So, if existing-home sales either hold at the 5.1 mil lion pace of the first quarter or improve on that, then the annual sales tally will easily exceed the 4.9 mil-lion home sales we saw last year.

Still, the stars are not all aligned. There will be obstacles. High gas prices are a daily reminder that something is not right with the economy; that will hold back consumer confidence. Washington policymakers are debating the ending of government guaranteed mortgages and requiring a minimum down payment of 10 to 20 percent on conventional mortgages, even though the FHA and VA mortgage programs have very low down payments and have yet to require a single dime of taxpayers’ money. And there will be attempts to chip away at the mortgage interest deduction by invoking class warfare—the " let’s go after the rich " approach.

At least through 2011, improving market developments should outweigh the negative impact imposed by Washington policymakers.xisting-home Sales ‘Rebenchmarking’

Learn how NAR plans to ensure the continued accuracy of its existing-home sales calculation in the years ahead: "How NAR Calculates Existing-home Sales"

Which Social Network Is Rated Most Important?

2011-06-09T14:02:00.000-04:00

Nearly 60 percent of survey respondents say that it is important to have a LinkedIn account--more than any other social network, according to “S-Net (The Impact of Social Media),” a report from ROI Research Inc. of nearly 3,000 active social networkers.

And those surveyed say they use LinkedIn a lot, too. With those who have an active LinkedIn account, half of those surveyed say they visit the site at least weekly, and 20 percent visit the site at least daily.

“Factors including LinkedIn’s recent IPO announcement, the May uptick in national unemployment, and signs of a slowed market certainly contribute to LinkedIn’s attractiveness among social networkers,” says Daina Middleton, CEO of Performics, which released the survey results.

The survey also found:

•Social networkers listen to what their peers have to say about brands and businesses they like--or don’t. Sixty percent say they are at least somewhat likely to take action when a friend posts something about a product/service, company, or brand. Slightly more than half agree that others can influence business decisions made by companies and brands by sharing their opinions on social networking sites.

•Fifty-three percent frequently or occasionally use social networking sites to give feedback about a brand or business.

•The public is divided on using social networks to give and get advice about other companies. Fifty percent of respondents say they use social networks to give advice and another 50 percent say they use it to get advice about services and companies.

What's That '+1 Button' All Over the Internet?

2011-06-07T07:27:00.000-04:00

Google recently launched the “+1 button” and you’ll spot it on a range of Web sites from YouTube and Blogger to the Washington Post and many others. Google added the +1 button to its search engine three months ago but is now making the “+1 button” available to other Web sites to add.

So what is it?

The button is similar to Facebook’s Like button. You click the +1 button when you think “this is pretty cool” or when you want to say “you should check this out” when viewing Web sites, according to Google.

The button gives you the ability to vote on Web sites and advertisements (the button can appear next to the headline of search ads), and the information is then used to tailor search results for you and your contacts.

For example, "with a single click you can recommend that raincoat, news article, or favorite sci-fi movie to friends, contacts, and the rest of the world,” writes Google software engineer Evan Gilbert in a blog post. “The next time your connections search, they could see your +1's directly in their search results, helping them find your recommendations when they're most useful."

You’ll need to be signed into your Google Account to see when friends and contacts have endorsed certain Web pages using the +1 button.

Google says it hopes the added button will help improve click-through rates for content and advertising and is encouraging Web site owners to add the button to their Web pages to get their search results to stand out more.

Source: “Google Rolls Out +1 Button for Web Sites,” TechSpot

On Housing, Don't Believe the Doom

2011-06-03T16:26:00.002-04:00

On Housing, Don't Believe the Doom
Non-distressed properties sold by voluntary sellers have started to stabilize. That’s a sign that the worse could be over, Ajay Rajadhyaksha, the co-head of U.S. fixed income strategy at Barclays Capital, said in a research note on Friday.

An increase in voluntary sales over the summer should lead to another change in the mix of homes, in favor of non-distressed sales, and the aggregate index of home prices should stop declining and could even increase.

"In sum, there are many reasons to worry about the U.S. macroeconomic picture (the recent softening in the labor market, the U.S. fiscal picture, etc.) but the recent drop in U.S. home prices should not be one of them," according to Rajadhyaksha.

Source: “Don’t Believe the Doom on U.S. Housing,” CNBC.com, Patrick Allen (June 3, 2011)

Local Markets Heat up with Investors.

2011-05-31T16:45:00.001-04:00

Survey: Local markets heat up with investors
CAMPBELL, Calif. – May 31, 2011 – Real estate investors, by three to one, will be more active in their local markets compared to typical homebuyers in the next 24 months; and 69 percent of investors say it’ll be easier to find properties in the near future, according to a survey of real estate investors released by Move, Inc., the management company overseeing Realtor.com.

The Move Investor survey suggests that local markets will be heating up with renewed investor interest and activity. Compared to a year ago, 62 percent of investors are paying more attention to home values in their local markets – only 43.5 percent say it will be harder to find bargains and 41.5 percent expect it to be easier to sell their properties in the next six months.

Meanwhile, 22 percent of investors are bullish and expect prices to rise in the next six to 12 months, and 53.5 percent expect prices to remain relatively the same. Twenty-three percent expect prices to fall in the next six to 12 months.

The Move Investor survey also found that investors are prepared to compete vigorously with traditional first-time homebuyers for hot deals. Two-thirds of investors (65.5 percent) said they expect that first-time buyers’ problems getting a mortgage will make it easier for investors to compete for properties. One in five investors (18.5 percent) say they’ll be cash-only buyers, a strategy that’s out of reach for most first-time buyers. Eight out of 10 (80.5 percent) expect cash discounts from sellers.

Today’s investors – not stereotypical, deal-driven flippers

Contrary to the tactics used by “flippers,” 50 percent of today’s real estate investors plan to hold their properties for five-plus years. Only 11 percent expect to sell within 12 months of purchase. Two-thirds (67.5 percent) say they’re investing for the long term.

Fifty-nine percent (59 percent) told Move they’re new to real estate investing, with 33.5 percent considering their first investment purchase and 8.5 percent in the process of buying and selling their first investment property. Another 17 percent said they just completed their first transaction and plan to make more. Only 36.5 percent have experience in more than one property transaction.

When it comes to repairs and maintenance, 56.5 percent of investors say the repair and maintenance of investment property has not been difficult. Moving forward, 42 percent plan to invest their own time and energy to improve, repair and maintain their properties. The rest said they’d hire a contractor for repairs (29.5 percent) or purchase move-in-ready properties (28 percent). The majority (65.7 percent), don’t expect repair costs to exceed 20 percent of the property’s purchase price.

“This data suggests today’s climate is hot for investing and is attracting a lot of new people that don’t fit the stereotypical deal-driven flippers that buy and sell properties quickly,” said Move, Inc. Chief Executive Officer Steve Berkowitz.

Investors combine cash and credit to snap up properties

While cash is king in many circles, 75.5 percent plan to combine cash and credit to purchase properties as they build their real estate portfolio. In fact, 59.5 percent plan to put less than half down on their next property purchase and they’ll finance the rest. Those planning to use more than 50 percent cash and finance the remainder account for 16 percent of today’s investors. Investors told Move the second most difficult challenge has been finding financing (57 percent).

“The fact that most real estate investors plan on combing cash and credit for their purchases goes against the conventional wisdom that investor transactions today are mostly cash-only sales,” says Berkowitz. “We were surprised to learn that 75 percent of investors are financing portions of their purchases. This suggests they’re seeing tremendous or once in a lifetime opportunities and may be tapping into credit or taking out second trusts on existing properties. The data also shows they’re expecting high returns to match the level of investment they’re making in an arena that is new to many investors.”

High risk leads to high ROI expectations

Based on the investments they’re making in today’s environment, real estate investors clearly expect high yield returns. Nearly half (48 percent) expect a profit of 20 percent or more from their property investments, a 4 percent annual rate of return over five years. Another 40 percent expect a profit of 10 percent, and only 6.5 percent expect a 5 percent or less return on investment. Half (50 percent) of today’s real estate investors plan to hold their properties for five-plus years.

Property investments gateway to homeownership for many

While the survey shows investors will outnumber traditional homebuyers three to one, nearly half (49 percent) plan to live in their investment property until it’s sold or turned into a rental property. Slightly more than half (56.5 percent) will put their investments to work as rental properties, and 28 percent plan to purchase vacation property that they’ll eventually sell. The Move Investor survey also found 30 percent of real estate investors are interested in buying retirement property as an investment.

“The survey suggests some first-time buyers may be looking at investing as a strategy to becoming homeowners,” Berkowitz said. “While today’s market is tough for some, it’s also motivating millions to take an unconventional approach and creatively search for new ways of entering the housing market.”

Increase proposed for FHA downpayments

2011-05-26T07:01:00.000-04:00

WASHINGTON – May 25, 2011 – A Republican-led proposal circulated Monday would boost the downpayment requirement for mortgages backed by the Federal Housing Administration, a move that some industry experts said would shut potential homebuyers out of the market.

Borrowers who take out FHA-insured mortgages are permitted to put down as little as 3.5 percent, making those loans an especially attractive choice for first-time homebuyers. But as defaults rose during the housing market’s worst days, FHA’s cash reserves dwindled, creating concerns that taxpayers may have to come to the agency’s rescue.

The Republican proposal would require most FHA borrowers to put down at least 5 percent. Those who support the idea say that forcing borrowers to have more equity in their homes would better protect homeowners against default and thus improve the agency’s finances. The issue will be discussed Wednesday at a House Financial Services subcommittee hearing led by Rep. Judy Biggert (R-Ill.).

The proposal has not been formally introduced in legislative form. And it’s unlikely to gain traction without bipartisan support, said Jaret Seiberg, an analyst at MF Global Inc. But if enacted, its immediate impact on the housing market would be negative, he said. Gathering the upfront cash is often the biggest hurdle for those buying their first homes.

Demanding more money down “would make it even harder for first-time buyers to enter the housing market regardless of their incomes or earning potential,” Seiberg wrote in a note to clients Monday.

Mark A. Calabria, director of financial regulation studies at the Cato Institute, said larger downpayments would no doubt have some drag on the housing market. “But it’s a modest drag because it’s a fairly small change,” said Calabria, who is scheduled to testify at Wednesday’s hearing. “It’s a smart and reasonable thing to do.”

A similar Republican proposal stalled in the House last year after the Obama administration vehemently opposed it, warning that such an increase would undermine the already fragile housing market by shrinking the agency’s loan volume.

At a hearing last year, FHA Commissioner David H. Stevens told House lawmakers that raising the minimum downpayment to 5 percent would lower the agency’s loan volume by 40 percent in the next fiscal year and shut out 300,000 first-time homebuyers.

Since then, the FHA has raised its downpayment to 10 percent for borrowers with the poorest credit. In a report to Congress, the administration said it would consider raising FHA’s downpayment requirement as part of a broader effort to curb the government’s role in housing finance. Separately, the administration teamed up with banking regulators to propose a rule that would enable only those who put down 20 percent to get the lowest interest rates, though that rule does not apply to FHA borrowers.

The administration declined to comment Monday on the most recent Republican proposal. But at least one banking industry consultant, Brian Chappelle, plans to tell lawmakers Wednesday that the proposal is unnecessary, especially now that FHA has raised the fees it charges borrowers by 60 percent since 2008 and dramatically improved the credit quality of its borrowers in recent years.

Copyright © 2011 washingtonpost.com, Dina ElBoghdady

Fixed mortgage rates touch new low for 2011

2011-05-20T13:37:00.002-04:00

NEW YORK – May 20, 2011 – Fixed mortgage rates fell this week to the lowest point of the year, offering incentive for homeowners to save money by refinancing their loans.

Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.61 percent. That’s down from 4.63 percent and the lowest level since mid-December.

The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.80 percent from 3.82 percent. That marked the lowest point since late November.

Rates track the yield on the 10-year Treasury note, which fell to the lowest level of the year this week.

Low rates haven’t been enough to jumpstart the weak housing market. Fewer people bought previously occupied homes in April, the National Association of Realtors said Thursday. Sales fell to a seasonally adjusted annual rate of 5.05 million units, far below the 6 million homes a year that economists consider a healthy market.

However, the number of borrowers looking to refinance is now at the highest level since the second week of December, according to the Mortgage Bankers Association. Refinance activity has increased 33 percent over the last five weeks, mirroring the steady decline in rates.

Despite the gains, refinancing is only at half the level it reached in the fall of last year when mortgage rates fell to record lows. The rate on the 30-year home loan hit a four-decade low of 4.17 percent in November. The 15-year mortgage rate reached 3.57 percent that same month, the lowest level on records dating back to 1991.

“We’re not seeing a (refinancing) boom by any means,” said Pava Leyrer, president of Heritage National Mortgage in Michigan.

She said many borrowers refinanced when rates were lower last year. Others don’t have enough equity in their homes because values have fallen too much or their credit isn’t polished enough for them to qualify.

And those who may shave off a percentage point or more from their mortgage rate face higher closing costs this year because of a recent fee increase for appraisals, title insurance and other costs. That could offset any savings from an interest rate reduction.

“If it’s purely a rate decision, the difference needs to be one and a half percentage points,” said Ritch Workman, co-owner of Workman Mortgage in Melbourne, Fla.

Workman has noticed an uptick in applications for purchase mortgages. Would-be buyers are taking advantage of the combination of low rates and declining home prices.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage rose to 3.48 percent from 3.41 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

The average rate on a one-year adjustable-rate loan also increased to 3.15 percent from 3.11 percent, the lowest level for the rate in the last year.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
Copyright 2011 The Associated Press, Janna Herron (AP Real Estate Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The 10 Most Walkable Cities

2011-05-18T15:17:00.002-04:00

Buyers have expressed more preferences to walkable communities in home-shopping surveys.

Walk Friendly Communities, a national recognition program, recently recognized the top places in the country for walking, taking into account such factors as safety, space in communities devoted to pedestrians, as well as whether walking is integrated into the city’s overall urban planning process.

Here is its list of the top 10 most walkable cities:

1. Seattle, Wash.
2. Ann Arbor, Mich.
3. Arlington, Va.
4. Hoboken, N.J.
5. Santa Barbara, Calif.
6. Charlottesville, Va.
7. Decatur, Ga.
8. Austin, Texas
9. Charlotte, N.C.
10. Flagstaff, Ariz.

Source: “America’s Most Walkable Cities,” Forbes (May 6, 2011)

What Celebrities Desire in Homes

2011-05-06T14:10:00.000-04:00

Daily Real Estate News | May 6, 2011 | Share
What Celebrities Desire in Homes
Celebrities often have slightly different priorities when shopping for a home than the average home buyer. Here are a few top items often found on their priority list when home-shopping, according to the Zillow Blog.

1. Privacy. Most often a top priority, celebrities usually want a gated, secured home. “It’s a huge issue,” says Jade Mills, a Coldwell Banker real estate pro who has worked with actress Jennifer Aniston. “They want to be able to come home and get away from the paparazzi and want privacy when they go into their yard. They usually have foliage [and] hedges so that people can’t look in.” Ultra-privacy goes for condos too. For example, Aniston recently bought a penthouse condo in New York City, as well as the floor directly beneath it, to ensure more privacy.

2. Giant closets. Celebs can’t hold all of that glam without lots of oversized closets. “A lot of the female celebrities and even the male, love giant closets—over-the-top closets—because they have a tremendous amount of clothes,” says Gary Gold of Hilton & Hyland in Beverly Hills. Some celebrities may even convert extra rooms into expansive, customized closets.

3. Home theaters. They also want a comfortable place to view themselves on screen. Home theaters are often high on their priority list, says Mauricio Umansky of Hilton & Hyland in Los Angeles. “They’re in that business and they expect it,” Umansky says.

4. Hobby rooms. Celebrities also tend to like flexible spaces--rooms that are blank slates that they can transform into whatever they desire, whether that’s a hair salon, home office, or even a guest house. “Each [celebrity] has their own thing and needs a hobby room, a studio, a dark room, or a computer room,” Umansky says.

But, of course, celebrities--just like any other buyer--may have a few odd requests from time to time too. Gold says he once had to try to find a place for a celebrity that could accommodate his 9-month-old, 160-pound mountain lion.

Source: “What Do Celebrities Want in a Home?” Zillow Blog (May 2, 2011)