Keller Williams grows in challenging times!

Interesting article http://bit.ly/eaPzf4

It has been an interesting past quarter monitoring the divergent pull of low (for now) interest rates and an improving economy versus stagnant unemployment and an unsettled housing market – and the interdependency of all.

Interest Rates The good news: Rates are still near historical lows. Jumbo Rates – The 30 year fixed is rising and falling nearly in lock step with its conforming brethren. With a solid credit score the rate is around 5.5% percent with 20% equity, or 80% loan to value.  Adjustable rates are naturally far lower. Conforming Loans – For qualified borrowers the 30 year fixed is very near 4.875%, the 5 year ARM rate is in the low to mid 3′s, and the 7 year ARM is in the high 3′s. Amortization:  Many people are switching to 15 and 20 year fixed rates that may be significantly lower than the 30 year rate.  They are finding that the monthly principal and interest payments with the low rates are not dramatically different from those they are paying on their current 30 year amortization. The interest savings over the life of the loan is substantial. Pricing: Although the typical difference in rate between a no closing cost mortgage and one that requires a client to pay closing costs is .25% – .5%, the current pricing environment often allows for a much narrower spread, .125% – .375%.  It is worth doing the break-even analysis to consider a no closing cost mortgage. The Housing Market The housing market is showing mixed signals, and is very conflicted.  December 2010 reflected a 12.3% increase in existing homes sales over November as buyers took advantage of bargains and low interest rates that prevailed in the fall.  However, according to the S&P/Case-Shiller Home Price Indices 19 of the 20 cities reported showed a loss in value averaging 1.24%, and 16 of the 20 cities showed a year over year loss from the prior November, with an average 20 city index loss of 1.6%.   The six months 20-city index showed an annual growth rate of 4.6%.  This has been tempered by November being the sixth consecutive month where the annual growth rates moderated from the prior month’s pace.  While the 20-city composite is 3.3% above its April, 2009 low, 9 of the cities have fallen below their April 2009 values.   It will be interesting to see if the 12% increase in home December home sales has a corresponding increase in home value.   While an improving economy will inspire consumer confidence, clouds hanging over the real estate market include continued unemployment, and foreclosures, which are not mutually independent.  It appears that many seller are of the opinion that if they wait, prices will go up, while buyer are the opposite thinking that if they wait, prices will go down. What the Market Means to You Purchases – It is still predominantly a buyer’s market. This gives you the opportunity to make an aggressive offer, and negotiate inspection items fairly but aggressively.  36% of the sales in December were distressed homes which include foreclosures and short sales.  If you are interested in making an offer on a short sale, I can help you. Refinances - If you have not refinanced in the last three months, it may be time to do so.  Many people missed out on the bottom of the market. You should always conduct an analysis to see if it is worthwhile to refinance.  If you have been reluctant to inquire due to your loan to value, mortgage insurance payments can be part of the analysis. Contact me - I am happy to help you navigate this market.

 

American Attitudes About Home Ownership

A substantial majority of both home owners and current renters agree that owning a home is a smart decision over the long term, according to the results of an NAR survey conducted by Harris Interactive. Click here to read

Homes sales pattern over last 6 months showing a recovery?

Read this interesting article about the recent jump in home sales

More transparency around credit decisions?

Hopefully this will add more clarity:

http://bit.ly/dE3iTB

10 Real Estate Tips for 2011

Nice article about how to buy/sell Real Estate and survive in the “New Normal”. Even if the market is slowly coming back, we will have to adapt to new market realities. Read this: http://yhoo.it/gcOxj8

Buyers Who Wait May Lose a Lot

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).

Source: Money Magazine, (03/02/2010)

Foreclosure Alternatives

Interesting article about Citigroup’s new program in which they let homeowners stay in their property for 6 months rather than evicting them: “Citi to let distressed homeowners stay for 6 months”

www.carolinaresidence.com

The Real Estate Market in February 2010

Stable? Improving? Tepid? Lackluster? Optimistic? Theses are the mixed messages used to describe the housing market in the past month. And since real estate is local, all the adjectives are accurate depending upon the locale and the type of housing. The coastal areas of California such as San Francisco, LA, and San Diego are improving, while inland California continues to suffer. According to the S&P Case-Shiller Home Price Indices, one strong positive is that even in cities that showed a decline in value from October to November, the rate of decline compared to 2008 is far slower. Their Ten City and Twenty City indices are down 4.5% and 5.3% respectively, for November compared to 2008. An interesting aspect of the indices is that while there has been overall broad improvement, in November only five cities showed month over month improvement, and four cities – Tampa, Seattle, Charlotte and Las Vegas hit new four year lows. Conversely, Denver, Dallas, San Francisco and San Diego have values that are higher than one year ago. It is also important to note that November is a seasonal month, and when seasonably adjusted the numbers improved.

To view the city indices and related article, visit http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff–p-us—-#

For more information contact Greg Dwyer at Bank of America at 617-899-4399

www.carolinaresidence.com

Mortgages and Real Estate – Week in Review

Punxsutawney Phil has seen his shadow and only six more weeks of winter remain.  It also appears that the housing market is beginning to thaw with the spring market beginning early – most likely due to the first time home buyer credit which is scheduled to expire in June.

Many have heard horror stories over the past six to twelve months about obtaining a purchase or refinance mortgage.  Some people may have been outright declined, or felt like they were pulled through a meat grinder with request after request for more documentation and endless delays in closing a loan.  The reason is simple – as Fannie Mae, Freddie Mac and other mortgage holders are hit with more and more loan defaults, they are auditing their loan pools and looking for mistakes, lies or omissions that entitle them to return the loans to the originators.

Reasons for returning loans are various and many – from misstating occupancy to poor documentation of income or assets.  According to the Wall Street Journal and Barclays Capital, banks repurchased about $14.2 billion in loans from holders of mortgage-backed securities in the first nine months of last year, up from $3.6 billion in 2008. That certainly makes a dent in banks profits.  Underwriters are the gatekeepers to loans that are sold, and they are making sure that all the “i”‘s are dotted and “t”‘s crossed.  If any aspect of a loan is questionable, they will err on the side of caution and deny it.

The pendulum has swung from the days of 100% no documentation financing to the other extreme.  While this presents a more difficult environment, with good organization and proper documentation, it should not be a problem.

For those who have been declined, following is link to a recent CNN article. It shows that even millionaires can be declined…..often because they did not have the right loan officer working their file. http://money.cnn.com/2010/01/20/real_estate/mortgage_woes_for_wealthy/

For more information contact Greg Dwyer at (617) 899-4399.

www.carolinaresidence.com