Saturday, March 29, 2014

3 Reasons the Housing Market Should Thrive in 2014

threeRecently, HousingWire asked David Berson, chief economist at Nationwide, for his opinion on the near-term future of housing. Below are what Mr. Berson believes to be the three things you need to know about housing in 2014. We have included a quote from the article and a small comment from KCM for all three points.

Number 1: 2014 should prove to be the strongest year for housing activity since before the Great Recession

“Most economists expect an improved job market in 2014, with employment growth accelerating and the unemployment rate continuing to decline. That jobless rate drop will reflect more of a pickup in employment than further declines in the labor force participation rate. This will be the key factor improving housing demand this year, even if mortgage rates rise and affordability declines. While the housing market tends to do especially well when the job market improves and mortgage rates decline simultaneously, that combination of events occurs only rarely…People buy homes when their job and income prospects improve – even if it’s more expensive to do so – rather than buy when it is inexpensive to do so but they’re worried about keeping their jobs.”

KCM Comment:

We agree that the job market will continue to improve and that rising interest rates will not be a detriment to the market in 2014. As Doug Duncan, SVP and chief economist at Fannie Mae, recently revealed:

“Consumers have taken the interest rate rise in stride. Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track.”

Number 2: Demographics should start to favor housing activity

“If the economy expands at a faster pace this year, bringing a more rapid rate of job creation, that should translate into more households, raising housing demand. We won’t see all three million missing households return to the housing market at once. (That wouldn’t be a good thing for the housing market anyway, since that would be on top of the 1.2 million households that normally would develop this year; such a surge would swamp the existing housing supply). Beginning in 2014, the pace of household formations should accelerate to an above-trend pace for several years, pushing up housing demand.”

KCM Comment:

The Urban Land Institute recently released a report, Emerging Trends in Real Estate 2014, projecting that 4.48 million new households will be formed over the next three years. Millennials will make up a large portion of these new households. With the economy improving, we believe they will finally be moving out of their parents’ homes and, after they compare renting versus buying, many will choose homeownership.

Number 3: Mortgage availability shouldn’t worsen and may improve

“The rise in mortgage rates already has reduced mortgage origination volumes as refinance activity declines. If mortgage rates rise further this year, as expected, then refinance activity will fall still more. In response, mortgage lenders probably will ease lending standards to the extent possible under the QM rules to boost lending activity by increasing purchase originations. As a result, the increase in new households expected to be created this year, spurred by a stronger job market, should find that qualifying for a mortgage loan will be somewhat easier in 2014 than in prior years.”

KCM Comment:

We also believe that, as the refinancing market begins to dry up, mortgage entities will be more aggressive in the purchase money market (mortgages necessary to purchase a home). There even seems to be recent evidence that lending standards are actually loosening.


Friday, March 28, 2014

More Banks Lower FICO Score Requirements

More banks are lowering minimum FICO score requirements in an attempt to shore up lending for underserved borrowers.

Carrington Mortgage Services is the latest company to announce that it has lowered its minimum FICO score to 550. It also has expanded guidelines on several FHA, VA, and USDA loan programs to aid those with FICO scores below 640.

Wells Fargo, the nation’s largest mortgage lender, said in February that it was lowering its minimum FICO score requirements on FHA-backed mortgages from 640 to 600. The move, bank officials said, was aimed at “opening up our credit box more.”

One in three consumers have a FICO score below 650, according to Carrington. The lender is refocusing its business on targeting the underserved segment and eliminating conventional and jumbo loans. It is limiting its acceptance of wholesale submissions with FICO scores above 680 starting April 1, except for VA loans, HousingWire reports.

“Effectively meeting the needs of clients in the underserved market requires the ability to both originate quality loans and appropriately service them after the fact,” says Ray Brousseau, executive vice president of Carrington's mortgage lending division. “Both Carrington’s lending platform and specialty servicing business were created to serve this particular market segment. That uniquely positions us as the lender of choice for this population of borrowers and the mortgage brokers and real estate agents who work with them. Our message is clear: You can count on Carrington to serve the underserved and get the tough loans done right.”


Thursday, March 27, 2014

You CAN afford to live in Denali Heights!

The best priced home in Denali Heights, Kuna's premier non-acreage sub. Enjoy this summer by the community pool with great neighbors. This 4 bedroom home with den and bonus room is only $244,000.

Wednesday, March 26, 2014

Freddie Mac: Doubtful Rates Will Return to Recent Lows

Freddie Mac: Doubtful Rates Will Return to Recent Lows

Posted: 26 Mar 2014 04:00 AM PDT

blue interest rates"One thing seems certain: we aren't likely to see average 30-year fixed mortgage rates return to the historic lows experienced in 2012."

- Freddie Mac,  March 24, 2014

There are those that hope that 30-year mortgage interest rates will head back under 4%. Obviously, for any prospective home purchaser that would be great news. However, there is probably a greater chance that interest rates will return to the greater than 6% rate of the last decade before they would return to the less than 3.5% rate of 2012.

Freddie Mac, in one of four original posts on their new blog, explained that current rates are still extremely low compared to historic averages:

"The all-time record low – since Freddie Mac began tracking mortgage rates in 1971 – was 3.31% in November 2012. Conversely, the all-time record high occurred in October of 1981, hitting 18.63%. That's more than four times higher than today's average 30-year fixed rate of 4.32% as of March 20...rates hovering around 4.5% may be high relative to last year, but something to celebrate compared to almost any year since 1971."

Rates over decades

If you are thinking of buying a home, waiting for a dramatic decrease in mortgage rates might not make sense


Monday, March 24, 2014

Why You Need A Real Estate Agent


Here is an info graphic prepared by an out of the area real estate company illustrating the need for a real estate agent in the buying process. I specialize in helping buyers purchase the home they want to buy, not the one I want to sell them!  (I work for you, not me.)



Saturday, March 22, 2014

Boise-Getting it Right!

The City of Trees has made more than its fair share of top ten lists in various national publications.

However, the most recent issue of Time includes an impressive addition for Idaho's capital city.

Under the magazine's "Solutions for America" header, Time ranked Boise no. 1 out of 9 cities for what it called "getting it right."

The criteria for cities to make the list includes a thriving economy, a booming cultural scene, quality health care, and a growing university.



Friday, March 21, 2014

Comparing the Counties, Ada and Canyon

Buyers are out, and I have had several homes receive and accept offers in the past few weeks. But even with that said, I do not see home prices appreciating at this time. Actually it is probably the sign of a healthy market, homes selling but not going crazy. It is important to price homes properly to have them sell n a timely manner.

Sales Volume in February 2013  Vs  February 2014 and  Change

Ada                            468                              422                          -9.8%

Canyon                     181                               178                           -1.6%


Other county to county comparisons:                            Ada                        Canyon

Average Days on Market                                                    66                               69

Percent of Market in New Home Listings                      36%                            37.3%

Year to Year Change in Active Listings                          +23.1%                       +34%

Change in Number of Sales from January                    +11%                           -8.7%

Median prices in both counties took approximately a 4% decline from January to February.  Ada County's median is now at $208,1000 and Canyon sits at $125,000.

Wednesday, March 19, 2014

5 Reasons to Sell Now

Many sellers are still hesitant about putting their house up for sale. Where are prices headed? Where are interest rates headed? Can buyers qualify for a mortgage?  These are all valid questions. However, there are several reasons to sell your home sooner rather than later. Here are five of those reasons.

1. The Most Serious Buyers Are Out Now

Most people realize that the housing market is hottest from April through June. The most serious buyers are well aware of this and, for that reason, come out in early spring in order to beat the heavy competition. These buyers are readywilling and able to buy…and are in the market right now!

2. There Is Less Competition Now

Housing supply always grows from the spring through the early summer. The choices buyers have will continue to increase over the next few months. Don’t wait until all the other potential sellers in your market put their homes up for sale.

3. The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. As the market heats up, banks will be inundated with loan inquiries causing closing timelines to lengthen.  Selling now will make the process quicker and simpler.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate at about 4.5% right now. Rates are projected to be well over 5% by this time next year.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire.

That is what is truly important.


Tuesday, March 18, 2014

5 Reasons to Buy Now

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying.

1. Competition is about to Increase

Every spring a surge of prospective purchasers enter the housing market. Like you, they will want the best home available in the best location at the best price. They will be competing with you for the ‘steals’ in the market. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy available today that no longer be available as the market heats up..

2. Price Increases Are on the Horizon

Nationally, home prices are projected to appreciate by 4.5% in 2014 and by over 19% from now until 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.

3. Owning a Home Helps Create Family Wealth

Whether you rent or you own the home you are living in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Federal Reserve, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.

4. Interest Rates Are Projected to Rise

The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the spring of 2015. That is an increase of almost 3/4 of a point over current rates.

5. Buy Low, Sell High

Most would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.

Courtesy of KCM Blog

Monday, March 17, 2014

Happy St. Patrick's Day

I saw this in front of a house on the way out to Kuna today.  How festive!

Saturday, March 15, 2014

The Eagle Has Landed!

I have seen some unusual and large lawn ornaments but take a look at this one!

Friday, March 14, 2014

Lovely Home located in Eagle's Brookwood

Give me a call to take a look at this brand new listing, priced at $316,000. For more information and photos you can go to my website:  LowesFlatFee.com.

Thursday, March 13, 2014

Mortgage Credit Availability Eases

Please make sure and note the difference between the estimated availability in 2006 and now, amazing!

WASHINGTON, D.C. (March 11, 2014) — Mortgage credit availability increased slightly in February according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from the AllRegs® Market Clarity® product.

"For the third month in a row, mortgage lenders and investors slightly expanded credit offerings in February on net, as a result of offsetting factors,” said Mike Fratantoni, MBA’s Chief Economist.  "Specifically, the recently implemented QM/ATR sections of the new CFPB regulations stipulate that ARM loans must qualify at the highest allowable rate for the first five years of the loan.  As a result, many investors have discontinued loans whose interest rate adjusts after only 3 year (also known as 3/1 ARMS).  While there was significant pull-back on these 3/1 programs, lenders and investors added several new 5+ year ARM programs, including those for Jumbo loans, to their repertoire resulting in a net increase to the MCAI.”

Source: Mortgage Bankers Association; Powered by AllRegs® Market Clarity®

The MCAI increased 0.44 percent from 113.0 in January to 113.5 in February.  A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit.  The index was benchmarked to 100 in March 2012.  If the MCAI had been tracked in 2007, it would have been at a level of roughly 800, indicating the credit was much more available at that time.

Source: Mortgage Bankers Association; Powered by AllRegs® Market Clarity®

The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit.

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).  These metrics and underwriting criteria for over 85 lenders/investors are combined by MBA using data made available via the AllRegs® Market Clarity® product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time.  Base period and value for all indexes is March 31, 2012=100.


Wednesday, March 12, 2014

February Market Report…kind of like skiing in the rain. It’s good but you wish it was better.

by Marc Lebowitz, RCE, CAE

ACAR Executive Director

Single family home sales in February 2014 were 422 in Ada County, an decrease of 10% compared to February 2013.  January sales were strong, and, when linked with February gives us a YTD total sales exactly equal to this time last yea; 836 homes sold.

In February more than 50% of our total sales were for homes priced above $160,000.  Sales of homes priced above $160,000 were up over February 2013.

Days on Market for February were 66.  That’s down from February, but still up significantly from December’s 59. In February 2013, Days on Market was 72.

New homes sold in February totaled 96; down 9% from last year.

Existing home sales were 326; down 10%.

Historically, February sales increase from January by an average of 3%. February 2014 posted a 4% increase over January.

Of the total sales in February, 13% were distressed; up 1% from last month. In February 2013, 23% of sales were distressed.

For the month of February, REO sales (62% of Distressed; 34 total sales) exceeded Short Sales (38% of Distressed; 20 total sales).

Pending sales at the end of February were 951; down 10% from February 2013.

Of Pending sales in distress (12%), there are slightly more Short Sales (57%; 65 sales) than REO’s (43%; 49 sales).

February median home price was $199,650; up 11% from February 2013.

New Homes median price for February was $320,500; up 23% from February 2013. For Existing homes the increase is 6% to $169,900.

The number of houses available for sale at the end of February increased  slightly from January 2014 to 2,127.  This reverses four consecutive month of decrease.  This is 23% more than last year at this time…which we need heading into Spring.

We anticipate continued inventory growth from now until the end of Summer.

Of the total active listings, 10% are distressed, down 1% from January.

Of our Distressed Inventory, 67% is Short Sales (142) and 33% is REO (70).

In Ada County we now have 4.7 months of inventory on hand, up a little from the end of January.

The price category in shortest supply is <$100K where we have 1.4 months.

From $100,000 to $119,000 we have 2.1 months available.

From $120,000 to $160,000 we have just under 3 months available inventory.

From $160,000 to $300,000 we have nearly 5 months…except for the very popular $250,000 – $300,000 which has only 4.5 month’s supply available.

Above $300,000 we have a 5 month’s supply. Above $500,000 the supply is closer to 14 months.  Remembering that 6 months of available inventory describes a “stable real estate market”; it looks like we are heading into a period of “normal” like we haven’t seen in several years.

Of sales in February, the most popular price point was $120,000 to $160,000 (26%); followed by $160,000 to $200,000 (14%) and  $200,000 to $250,000 with 12%.

So…what’s next?

Sales did hit a Winter wall in February.  We are now chasing a super strong Spring and Summer 2013. March 2013 sales were 550.  Can we increase sales from 422 to 550 with Pending sales where they are? It’s going to be close.

February is typically our weakest month for median home price. February 2014 was pretty strong.  This should continue into the Summer.

We are seeing more and more data that says that the Millennials (the big homebuyer wild card) are feeling better and better about home ownership.  Nearly 90% of Millennial buyers say “homeownership is a good investment”.

This is the pent up demand we’ve been waiting to see activate.

Bottom line…its going to be a complicated first quarter for real estate.


Saturday, March 8, 2014

How to Price Real Estate

An excellent analogy on home pricing from KCM Blog:


1963 Chevrolet CorvetteLocation may have the most effect on value but Price is without question the most important factor controlling the sale of real estate.  Anything will sell anytime, how long will it take depends on the price.

Think about it this way – you may really want to buy a car for your collection and your favorite happens to be a 1963 Corvette.  So you hear about one for sale, in mint condition, across town but the only problem is the price, the owner is asking $150,000!  Well, although you really, really want a mint condition 1963 Corvette, there is no way you will pay anywhere close to $150,000, in fact you know that the most a 1963 Corvette has ever sold for is about $200,000 and that was for a very rare model, which this one is not.

Because you are a bit obsessed with owning one of these cars you spend almost all of your free time, and some of the time you should be working, searching the internet for available cars.  Through this exhaustive search you have become somewhat of an expert on the values of 1963 Corvettes, especially in your town.  You happen to know that the particular model for sale across town is worth about $95,000…maybe $100,000.  In fact, if the asking price was $100,000 or even $110,000 you would’ve driven over there today with your checkbook and driven home in a 1963 Corvette!

So why don’t you go make an offer? Well, let’s face it when you see a price that is so high compared to the actual value it makes you think that the seller is either difficult to deal with and is out of touch with reality or that he must not really want to sell the car, instead he is just fishing for the one fool in the world that will pay $150,000 for a car that is worth $95,000.  So you don’t even go look at it or call for more information…you just keep searching the various websites to find the car of your dreams.

Yes, you guessed it the Corvette in this example actually represents your home or other real estate you might be trying to sell.  (in fact it represents any item that can be bought and sold).

Wiggle room = Bad idea

Most sellers think that it is necessary to “leave a little wiggle room” in the price.  They think this because they think that all buyers will make aggressively low offers…no matter what the asking price.  WRONG!!

Buyers pay the fair market value …in other words they will pay you what it is worth!  Your job is to find out what it is worth and price it at or near that value.

This is where brokers and/or appraisers come into the picture.  The right way to price your property is to have a professional REALTOR/broker or appraiser prepare a CMA (Comparative Market Analysis) on your property.  A CMA involves finding recent sales of similar properties, adjusting for any differences, to arrive at a current market value of your property.  Once you have this value you should have your broker set the asking price no more than 3% to 5% higher than that current market value.

If you do this, your property will sell quickly for a price equal to exactly what it is worth, or higher!   Buyers as a general rule DO NOT make “low-ball” offers, there are some rare occasions when that happens but the vast majority of initial offers are 5% or less below asking price.

If sellers price their property correctly the buyers will know it immediately because, just like in the Corvette example, buyers spend every spare moment searching the internet for a home, they have made themselves experts on the market value of the particular type of home in the particular area they desire.  For this reason the buyer also knows when a property is overpriced.  Most buyers will not even go look at a property that is overpriced, they say to themselves “why bother?” they assume that the seller is unreasonable and/or is not truly interested in selling the property.

Yesterday, the Buyer’s Specialist that works for my team and I were showing a house to some buyers who were very motivated had already decided on the neighborhood.  The house was well within their price range and met every one of their criteria.  As we stood in the kitchen discussing what price we should offer we found ourselves drawn to the fact that the house had been on and off of the market for the last four years!

The conversation immediately turned to “what is wrong with this house?”   It turns out that the house hasn’t sold because it was severely overpriced most of that 4 years, it happens to be well priced now but the stigma it carries because of the lengthy time on the market will likely result in it selling for less than it is really worth.

Moral of this whole story is - buyers will pay what it is worth - Seller’s job is to find out what it is worth and set the asking price 3%-5% higher than that number…then sit and wait for the offers to roll in.


Friday, March 7, 2014

Buying a Home? How the Serenity Prayer May Help

hands-in-prayerYou may be frustrated while attempting to buy a home in today’s market. You may feel powerless to the process. How could YOU possibly know whether the current good news about housing will continue? There is no doubt that today’s real estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to decide whether it is the right time for you and your family to move. Even in the current market.

“How?” Let’s look at the simplicity of the famous Serenity Prayer and apply it to buying a home in today’s real estate market.

“God, grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main concerns many talk about when discussing the housing market are:

  1. the current lack of inventory impacting housing prices

  2. the impending raise in interest rates

As an individual, there is very little you can do to impact either of those two situations. The best think-tanks in the country are struggling to discover what impact each of these items have on real estate.

Have the courage to change the things you can

Whether you are a first-time buyer or a move-up buyer and you believe now is the right time for your family to purchase a home – DO IT! Prices will only be higher later this year and though interest rates are rising they are still at historic lows. That means that your monthly housing expense will still be lower than almost any time in the last 50 years – and probably lower than your current rent payment.

The wisdom to know the difference

With the winter ending, the outlook on inventory is positive. Sellers will look to come out of hibernation and list their homes. The question is whether or not it makes sense to delay moving on with your life until everything gets ‘better’. Should you not buy a house and enable your kids to attend the school you have already decided is best for them? Should you spend another winter up north even though your doctor recommends you move to a climate better suited to your current medical situation?

This is where your wisdom must kick in. You already know the answers to the questions we just asked. You have the power to take back control of the situation by moving forward. The time has come for you and your family to move on and start living the life you desire. That is what truly matters.


Thursday, March 6, 2014

Must Haves to Attract Younger Homebuyers

The millennial generation is becoming an increasingly important part of the housing market. According to a 2013 National Association of Realtors study that looked at generational housing trends, millennials (or, Generation Y), those born between 1980 and 2000, are the second biggest segment of the buyer market, behind only Generation X, which covers those born between 1965 and 1979.

Together, these two generations represent today's young buyers, and broadly speaking, they tend to fall into one of two categories, says Margie Gundersheim, a Realtor with Keller Williams in Newton, Mass.

"They're young professionals who prefer a turnkey home that needs little or no work," says Gundersheim. "(Or they're) creative/romantic buyers who want to invest sweat equity and money over time, and put their personal stamp on the property and add value for the future."

But while those two groups may seem like they want entirely different things from a home, many agents say that younger buyers of all stripes have a lot of the same "must-have" features on their lists.

Read More From Bankrate: 8 tips to sell an old home to young buyers


Updated kitchen and bath

We all want to buy a home with new kitchen and bath fixtures, but new fixtures are especially important for today's young, budget-conscious buyers, says Jack Curtis, a real estate agent in Dublin, Ohio.

"The primary reason younger buyers seek updated kitchens and baths is because they have limited budgets," Curtis says. "Most of their savings will go toward the down payment and furnishings. Kitchens and bathrooms are also the most expensive parts of a home to update, and young homeowners cannot afford to sink a lot of money into those areas."

While updated kitchens and bathrooms may bring in a younger crowd, remodeling costs should give a seller pause. After all, if those updates aren't in a young buyer's budget, they probably aren't in a seller's budget either. Unlike a new roof or plumbing, bathroom and kitchen fixtures are also a matter of taste, so not every buyer will like what you pick, according to Curtis.


Big kitchen, open floor plan

A generation ago, formal dining rooms may have been on every buyer's wish list. But today there really isn't much appeal to the formal dining room, according to Lou Cardillo of The Lou Cardillo Team in Yorktown Heights, N.Y.

"The kitchen has become the hangout room along with the family room," says Cardillo. "An open space that can easily transition from kitchen to TV room is high on the list of the perfect home for young buyers. In essence, the kitchen is the new living room."

Read More From Bankrate: 4 big money mistakes of first-time homebuyers

Along similar lines, Curtis says today's young buyers are also more attracted to an open floor plan, rather than a layout that compartmentalizes the home. Again, the reason has a lot to do with how younger homeowners entertain.

"They want people to flow through the home during gatherings, rather than be sectioned off in rooms," Curtis says.


Home office

More than 13 million Americans work from home, and all signs point to that trend continuing, which makes a home office important for many buyers.

"Home offices have vast appeal," says Paige Elliott, a Realtor with Dave Perry-Miller & Associates in Dallas. "Most agents will point out that a room could be used as an office or other flex living space, especially if it is currently used or staged as a bedroom."

Home offices aren't just for those who work from home full time, according to Cardillo.

Read More From Bankrate: 4 tips for single, female homebuyers

"As technology continues to make us more mobile, young buyers have more options than ever to work from home, depending on their job," says Cardillo. "Having a dedicated space is important because it will help keep them focused and concentrated on work while they are at home on a Skype call, planning a presentation, setting up their workday or simply paying bills."


Good location

Younger buyers tend to see location differently from their parents, who didn't face high gas prices and traffic, says Allison Nichols, an agent with Related Realty in Chicago.

"My younger buyers look for properties that are in proximity to public transportation and that have a good walking score," Nichols says.

But there are young buyers, and then there are young buyers with children. The former group may prefer to be close to the action of the city, while the latter might prefer something a little more residential.


Low maintenance

Most young buyers look for homes that are low maintenance, says Cardillo, who points out that low-upkeep features such as wood floors (as opposed to carpet) and granite countertops are seen as positives for this generation because they're both attractive and relatively hassle-free.

Cardillo says he sees a generational shift toward a society that's more "disposable," where homeowners prefer to replace rather than repair.

"Most young homebuyers grew up watching their parents spend weekends with their honey-do lists, or they had chores to do on the weekends," he says. "Most young buyers are not going to follow in their (parents') footsteps. They don't want to do that stuff. … They want their weekends to themselves and don't really want to be cleaning gutters or cutting the grass.



A generation ago, buyers didn't care about a home's technological capabilities. Either it had cable hookups or it didn't. Today, buyers want to know about the home's technology. They want to hear about cell service and Internet, not cable and telephone.

"Most young homebuyers laugh at a landline phone, and even if they buy a house that has a jack, it is rarely used," Cardillo says.

In some cases, a house's appeal can be increased or diminished because of the strength of a mobile carrier's signal or its Internet service provider options, Cardillo says. While cell phone and Internet services are out of the seller's hands, Cardillo says sellers or their agents should be prepared to field questions on that front.

"Internet and cell service matters a lot to this generation, and they're going to ask, so you need to have answers," he says.


Energy efficiency

With energy cost on the rise and growing interest in protecting the environment, young buyers are conscious of buying homes that are green. They may not be alone, according to Jeff Hyland of Hilton & Hyland real estate agency in Beverly Hills, Calif.

"Today, not only younger buyers, but buyers in general, are looking for energy-efficient homes," says Hyland. "And if they are not already set up (for energy efficiency), then the buyers will often factor those costs into their budgets so they can do it after the close of escrow."

Before sellers green wash their homes, Elliott offers a caution: "I am not seeing the energy efficiency of a home as a top selling feature that attracts young buyers," she says. "They seem to be savvy on insulation levels, seasonal energy efficiency ratios and other energy-efficiency factors, but (energy efficiency) still isn't the top reason for a home purchase."

Oftentimes, Elliott says, young buyers ask about these things and then update them after they close on the house. And in some cases, buyers who make those upgrades themselves do so because of tax credits.


The cable TV effect

Whether we admit it or not, we've all seen at least a few of the home shows on cable networks like TLC and HGTV. But while those shows can be fun and informative, they also do a lot to shape buyer expectations.

"Real estate shows on TV have impacted all buyers on the way they look at houses," Elliott says. "But young buyers will often comment on how a house is, or isn't, staged."

Either way, staging is a critical part of selling your home, Hyland says.

"Staging a home is always helpful as it helps people to feel at home the moment they walk through the door, as opposed to having to imagine what it could look like once they move it," Hyland says. "Buyer expectations are often met, and at times, exceeded by staging a home."


Keep HOA costs down

Young buyers tend to get caught in a trap when gauging the affordability of condos or town homes, Nichols says. The asking price often fits their limited budgets, but HOA dues and the possibility of large assessments can sink the purchase.

"When it comes to condo buildings, my younger buyers are looking for properties with no special assessments," Nichols says. "These can be as high as $10,000, and young or first-time buyers don't necessarily have this in their budget. Likewise, they want to maximize their monthly housing budget by finding a property with low monthly assessments."

The possibility of a hefty assessment or high HOA dues deters some young buyers, but a building that's eligible for FHA financing can be attractive, Nichols says.


Online photos

If you're serious about attracting young buyers, you need to think about how your property shows online, Elliott says.

"Younger buyers start their searches online," Elliott says. "The home must have professional photography that shows the home in its best light, or they will move on before ever stepping foot in the door."

Looking at the data, it's hard to underestimate the importance of a quality online listing. According to the most recent analysis from the NAR, 90 percent of buyers use the Internet to search for homes. By comparison, real estate agents were the second most common resource for finding a home, with 87 percent of buyers citing an agent's help as a key factor.

The most telling piece of data may be what happens after buyers see an online listing. According to the NAR, 62 percent of buyers said they walked through a home after viewing the listing online, and 76 percent said they at least drove by the home because of an online ad.

From ABC News

Wednesday, March 5, 2014

The PTC Index for January.

The PTC Index utilizes a proprietary algorithm that weighs nine key real estate variables. These variables, though widely available, have not been easily collected in a single location. The PTC Index changes that.

This months PTC Index details are below. Previous months can be viewed by selecting a date from the drop down menu below.

These numbers are for Ada and Canyon County.

January 2014

Building Permits218
New Home Sales133
Existing Home Sales468
Average Sales Price194017.5
Financial-Bond Market(10-yr Treasury)2.86
Days on Market73
Distressed(Short Sales and REO)1102
Notices of Default192
PTC Index130

As January 2014 came to a close, many characteristics of the PTC Index show sharp declines in several key areas and increases in others that weren’t necessarily ideal. As expecting, January was a plodding month for real estate as consumers put the holiday months behind them while, perhaps, beginning to devise financial plans for 2014 before making a major purchases – like a home – in the busier spring months. For the second consecutive month, Notices of Default increased by 10 percent from the month prior, down 16.5 percent from a year ago. Distressed inventory dropped with a year-ago decline of nearly 45 percent - the highest in the last 14 months. New home sales,and existing home sales also fell significantly in January by 24 percent and 23 percent, respectively. Conversely, these categories have increased from the year-ago time period by 42 percent and 10 percent, respectively. Building permits inched up after two months of decline by 9 percent, up slight from a year ago. Refinances declined from the month prior by 16 percent and down by two-thirds from a year. There are many scenarios that could occur with refinance activity in the coming months with as new Treasury Chair Janet Yellen ‘seeks to forge a consensus on a new strategy for communicating the Federal Reserve’s intention to keep rates low.*’ * Zumbrun, Joshua, and Craig Torres. "Yellen Seeking New Low-Rate Guidance Can Use Forecasts." Bloomberg.com. Bloomberg, 24 Feb. 2014. Web. 25 Feb. 2014

Tuesday, March 4, 2014

Buying Foreclosures

I thought this was a very timely and well written article. I was having much of this discussion just last week with one of my sellers upon the successful sale of a home he had purchased at a foreclosure auction.

By Teresa Mears AOL Real Estate

Just a few years ago, buying a foreclosed home was seen as a way to get a bargain. With a glut of foreclosures and few buyers perusing the market, lenders were willing to sell homes at a substantial discount just to get rid of them. Those days are gone. Buying a foreclosure can still be a good move, but you're unlikely to find the same great deals.

In many cities, it's a seller's market for even foreclosed homes, so lenders know they don't have to offer bargains to unload homes. A good foreclosure, like any other good listing, is likely to draw multiple offers. "In many cases it's still right in line with the market," says Andy Asbury, a broker at Better Homes and Gardens Real Estate Area Leaders in Minneapolis. "We don't see just crazy deals. We don't see lenders negotiating all that much off the list price."

For buyers who go in with their eyes open, buying a foreclosed home could still be a good move. But if you fail to do your due diligence, you could end up with a money pit. When real estate professionals talk about foreclosures, they are actually talking about two very different types of sales:

• Buying a home at auction on the courthouse steps -- or the digital equivalent.

• Buying a home that has been taken back by a lender. These properties are also known as REO properties, short for "real estate owned," and are held by banks and various lenders.

While both fall under the foreclosure umbrella, the two types follow different processes from bid to final sale.

Buying at foreclosure auction. In most jurisdictions, buying a property at a foreclosure auction carries substantial risk. The buyer has to bid without seeing inside the home, which makes it difficult to estimate the cost of repairs. Plus, there is no guarantee that the property doesn't have liens, multiple mortgages, code violations or other issues that could make it difficult and expensive to get a clear title. Tenants or the former owner may also still occupy the property, and evicting any occupants will be the responsibility of the buyer.

When buying at a foreclosure auction, you're required to pay the entire purchase price in cash. Typically this payment must be received within 24 hours. If there are problems with the property, you're stuck. A foreclosure auction is no place for amateurs. "When you buy from the courthouse steps, there's a greater risk," Asbury says. "It really is buyer beware."

Most homes go back to the lender at the foreclosure auction because the amount owed is more than the property is worth. The lender is then responsible for paying off liens and clearing the title, as well as evicting the occupants, before putting the property up for sale.

Buying from a lender. Purchasing a foreclosure from a lender is more like buying from an individual, but there are some important differences. For one, there is no seller's disclosure about the property's condition. "You're dealing with a seller that's never been to the property," says Alan Plager, an REO specialist with Berkshire Hathaway HomeServices in Clearwater, Fla.

Most lender-owned properties are in the multiple listing service, and your buyer's agent can make an appointment to show them to you. You can also make your offer contingent on the property being approved for a mortgage and passing with a satisfactory inspection. A thorough inspection is crucial, especially if the property has been vacant for some time. In many cases, needed maintenance may have been put off for years. If you buy a house that requires extensive repairs, you're going to need the cash and the know-how to get the work done.

"If someone didn't pay the mortgage, they didn't upkeep," Plager says. Many foreclosed properties don't have water or electrical service, making it harder to evaluate them during your initial visit. If you're in a place like Minnesota during the winter, it may be colder inside the house than outside, and you'll have no clue how well the furnace works.

"You can't test anything during your initial showings," Asbury says. However, he adds that making quick assessments of the plumbing system and a few other things is possible if the water works during the inspection. Lenders will usually turn the utilities on for an inspection once the home is under contract, but there may be a charge to the buyer.

As with a private seller, you can renegotiate the deal if you uncover serious problems during the inspection, but you won't always find lenders ready to make concessions. If you're seeking a Federal Housing Administration loan, or some other types of loans, your lender will require the house to be up to certain standards. The bank that owns the house may or may not be willing to make those repairs. In some cases, if you want the house, you'll have to pay for the work before you close. In other cases, the lender may fix an issue that's required for financing.

Even if the inspection reveals multiple shortcomings, lenders are unlikely to accept a lowball offer. For one thing, in the current seller's market, there are generally multiple offers on well-located properties. If you don't want the house in its current condition, someone else probably will.

"It seems very rare these days that they're willing to adjust the price," Asbury says. In some cases, that could mean you'd be better off walking away and searching for a more suitable property. For would-be buyers who are struggling to compete with cash offers, foreclosed properties can present a good opportunity. Fannie Mae, Freddie Mac, the Department of Housing and Urban Development and some lenders give owner-occupants the first shot at acquiring properties. Some financing is also available to them.

To get top dollar for their properties, some lenders are making repairs before putting homes up for sale, from carpet and paint to replacing furnaces and air conditioners. In some cases, that means you could find a foreclosure in move-in condition. And you'll probably pay the same price you'd pay for any other house in the same condition.

"You're going to get the property pretty much at fair market value," Plager says. "[Lenders are] just like any other seller. Obviously, they don't want to give it away."

Monday, March 3, 2014

Mortgage Availability Improving

From Realty Times

According to a new survey from Fannie Mae, credit availability is improving. For the first time in over three years, the majority of consumers believe it's easier to get a mortgage.

Doug Duncan, Fannie Mae's chief economist said, "The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month's increase in consumers' intention to buy rather than rent their next home."

The Mortgage Bankers Association (MBA) says consumers are correct - credit availability has increased, particularly in the jumbo and refinance loan markets.


Explained Mike Fratatoni, chief economist for the MBA, "The market continues to adapt to the new QM [Qualified Mortgage] regulation by eliminating products that do not fit inside of the QM box. This tightening is being offset, both in the market for higher balance loans, where lenders continue to loosen terms for jumbo loans, and in the refi market, where more lenders are offering streamline refinance programs."

But there could be other reasons that credit is more available. Credit reporting agency Transunion announced that the mortgage delinquency rate for the fourth quarter of 2013 was 3.85 percent, down from 5.08 percent.

Delinquencies have been steadily declining over the past two years, while improved home sales and rising prices have allowed many homeowners on the edge of delinquency to sell their homes and get into something more affordable.

Credit has been extraordinarily tight since 2008, as lenders struggled with federal claims of mortgage fraud. For years, lenders raised credit standards beyond what was required to qualify for federally guaranteed loans and loans destined for purchase by the securities industry.

As the government leveled fines and made repayment settlements with many of the big banks, lenders are more willing to make mortgage loans. With the most toxic loans before 2008 foreclosed and disposed, lenders have more confidence in loans generated since them.

In fact, Transunion also reported that more loans were generated to borrowers with less-than-perfect credit in Q4 2013.

"We are on the downward slope of the mortgage delinquency curve, so we expect to continue seeing delinquency rates that have not been seen for several years," said Steve Chaouki, head of financial services for TransUnion.

With job gains growing, relatively low interest rates available and a tight supply of homes insuring equity gains, mortgage delinquencies should continue declining, and buyers should feel more confident in their decision to buy a home in 201


Saturday, March 1, 2014

Fannie Mae offering cash incentives!

Hey check this out! We do not have a lot of these home sin our area, but we do have a few, let me know if you would like to know more!

WASHINGTON — If you're planning to shop for a home in the next few weeks, here's an early spring buying season come-on that just might save you some money if you qualify.

Fannie Mae, the largest mortgage investor in the country, has a bulging portfolio of houses acquired through foreclosures nationwide. About 31,000 of these properties are listed on its HomePath (www.homepath.com) resale marketing site. To move them quickly out of inventory, Fannie temporarily is offering qualified owner-occupant purchasers — but not investors — cash incentives toward closing costs of 3.5% of the purchase price. But you have to submit your initial offer no later than March 31 and close by May 31.

What sort of houses are we talking about? Visit the site and you'll see. They run the gamut — from a one-bedroom condo in San Diego to a four-bedroom, four-bath single-family home in suburban Montgomery Village, Md. Some states have thousands of HomePath listings online: Florida has nearly 12,000; Illinois, 4,360; Ohio, 2,800; California, more than 2,300; Washington state, nearly 1,800; and Nevada, about 1,400. Asking prices range from $30,000 to $600,000 or more. On a $400,000 house, the 3.5% closing cost incentive would amount to $14,000.

To ensure that buyers who intend to occupy its homes get an opportunity to fully check them out and bid without competition from investment groups offering all-cash deals, Fannie has instituted what it calls a First Look program. It essentially prohibits bids from investors on properties during the first 20 days after listing (30 days in Nevada). After that, investors are free to jump in. Each First Look listing has a countdown clock attached to it that indicates the number of days remaining before bidding is opened to all comers.

The new 3.5% closing cost offer is available only during active First Look periods from mid-February through March, so there's not a lot of time to get involved. Bidders will need to indicate upfront that they want to be considered for a closing-cost discount.

Who is eligible? First, you've got to be a bona fide owner-occupant purchaser and commit to live in the house as a primary residence for at least a year. You'll need to fill out a certification to that effect that can be found on the HomePath site. Properties are not available in all states.

You don't have to be a first-time buyer, though the Fannie program is likely to attract substantial numbers of them. The 3.5% closing cost discount helps with one of the biggest problems faced by first-timers — upfront cash.

As with most home purchases, you'll need to be able to qualify for mortgage financing. Though Fannie may end up owning or securitizing the loan you obtain, it won't be financing you directly. On HomePath purchases, you shop for a mortgage just as you would on any other house. Ideally, you nail down a financing source and get prequalified for mortgage money up to a specific dollar limit at current interest rates. If you've already located a First Look property and qualify, the lender is likely to take the 3.5% closing cost incentive into consideration in evaluating your application.

While you shop on HomePath, however, keep this important factor in mind: These are foreclosed, previously occupied homes. Though some of them are repaired, painted and spiffed up before they are listed, many could use some additional work. They are sold "as is" and that's built into the pricing. Fannie identifies what it calls "improved" properties on the HomePath site — those that have undergone significant repairs — with either the "Home Depot" logo (when repairs have been made by contractors from that company) or a hammer and roof symbol (when repairs have been completed by independent contractors hired by Fannie).

If you can't find the First Look house you want, don't give up. Freddie Mac, the other giant federal mortgage investor, also has thousands of foreclosed homes that it's trying to dispose of — and its own First Look program — at its HomeSteps (www.homesteps.com) marketing site. Though Freddie currently has no closing cost incentive offer, it does provide a $500 allowance toward the purchase of a home warranty policy, and it promotes special mortgage financing options on houses in some areas. If you qualify, that could mean a loan with no mortgage insurance, no appraisal and a 5% maximum down payment.

Definitely worth checking out.

Article courtesy of lattimes.com


Who are Homeowners?

Do you think the same statistics would ring true locally?