Thursday, January 29, 2015

To Stage or not to Stage?

Home Staging Can Help Sell Home for More, Realtors® Say

WASHINGTON (January 27, 2015) – Most homeowners know it is important to keep a home clean, bright and free from clutter while it is on the market for sale. But sometimes, Realtors® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, according to the National Association of Realtors® 2015 Profile of Home Staging.

“Realtors® know how important it is to have a home in the best shape possible when showing it to prospective buyers,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Arkansas. “At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues. Another option is staging a home, which Realtors® often suggest to sellers to help prospective buyers better visualize themselves in the home and could modestly increase the home’s value for both the buyer and seller.”

The report, the first of its kind from NAR, found that 49 percent of surveyed Realtors® who work with buyers believe staging usually has an effect on the buyer’s view of the home. Another 47 percent believe that staging only sometimes has an impact on a buyer’s view of the home only. Only 4 percent of Realtors® said staging has no impact on buyer perceptions.

Realtors® on the buyer side believe that staging makes an impact in several ways; 81 percent said staging helps buyers visualize the property as a future home, while 46 percent said it makes prospective buyers more willing to walk through a home they saw online. Forty-five percent said a home decorated to a buyer’s tastes positively impacts its value; however, 10 percent of Realtors® said a home decorated against a buyer’s tastes could negatively impact the home’s value.

From the seller side, a majority of Realtors® utilize staging as a tool in at least some instances. Just over a third of Realtors® (34 percent) utilize staging on all homes, while 13 percent tend to stage only those homes difficult to sell, and another 4 percent will do so only for higher priced homes. The median cost spent on staging a home is $675. Sixty-two percent of Realtors® representing sellers say they offer home staging service to sellers, while 39 percent say the seller pays before listing the home.

Realtors® representing both the buyer and seller agreed on two major points in the report—which rooms should be staged and the change in dollar value a buyer is willing to offer for a staged home compared to a similar not-staged home. Realtors® ranked the living room as the number one room to stage, followed by a kitchen. Rounding out the top five rooms were the master bedroom, dining room and the bathroom.

Realtors® believe that buyers most often offer a 1 to 5 percent increase on the value of a staged home (37 percent from Realtors® representing sellers and 32 percent from Realtors® representing buyers). Additionally, 22 percent of Realtors® representing sellers and 16 percent of Realtors®representing buyers said the increase is closer to 6 to 10 percent.

“Working with a Realtor® gives buyers, sellers and investors the advantage they need to succeed in today’s market, as they know what buyers want and how to best market and stage a home for sale,” Polychron said. “While many factors play into what a home is worth and what buyers are willing to pay for it, staging is an excellent tool that can be used to give a home a little extra push for sellers. Staging isn’t used by every Realtor® in every situation, but the impact it may have and the value it can bring is clear to both home buyers and sellers.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.


Tuesday, January 27, 2015


Why Have Interest Rates Dropped? 

Posted: 27 Jan 2015 04:00 AM PST

The headlines agree mortgage interest rates have dropped substantially below initial projections. Many who are considering purchasing a home, or moving up to their dream home, might think that they should wait to buy, because rates may continue to fall. A recent article on the Economists’ Outlook blog by the National Association of REALTORS® (NAR) provides insight into one major factor in the decline in interest rates, the crude oil price.

“As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about $ 4/gallon in May 2011.”

You may have noticed that filling your gas tank has become substantially less expensive in recent months. A welcome change from the close to $5 a gallon that many Americans were paying this time last year. The average US household is projected to save around $550 in 2015.

So what does that have to do with Interest Rates?

NAR explains the correlation like this:

“Lower oil prices mean lower inflation rate, which pushes down mortgage rates.”

Based on Freddie Mac’s weekly mortgage survey as of January 22, 2015, the 30-year fixed rate averaged 3.63% and the 15-year fixed rate averaged 2.93%.

“The decline in oil prices is generally positive to households by way of the gas savings and lower mortgage payments. That savings will boost consumer spending in other areas. But there may be some layoffs in oil-producing states.”

How long will rates stay low?

No one really knows how long oil prices will continue to support low mortgage rates. In a New York Times article, the author points to the fact that “adding hundreds of billions of dollars to consumer spending” could start to have a “counter effect” on rates as the economy continues to strengthen.

“If firms start hiring again, and wages increase — that’s when the level of all interest rates in the U.S. would increase.”

Don’t wait too long

The low interest rates we are currently experiencing are not going to stay around forever. The current projections from Freddie Mac, Fannie Mae, NAR and the Mortgage Bankers Association all agree that interest rates will increase to between 4.3-5.4% by the end of 2015.

Bottom Line

NAR reports: “At the median home price of $205,300, a 0.75 percentage point drop in mortgage rates will yield savings of about $1,000 annually.” If you are in a position to buy a home make sure that you meet with a local real estate professional with their finger on the pulse of what’s going on in the market. Don’t let a delay in purchasing impact your family’s financial future.


Saturday, January 17, 2015

Idaho in Top 10 States for Inbound Moves in 2014

Since 1977, United Van Lines has tracked state-by-state household migration patterns annually in 48 states and Washington, D.C. Basing their research findings on the household moves their company facilitates, United identifies which states have the highest inbound moves and the highest outbound moves each year.

In their 2014 survey, United determined that Idaho ranked number 10 in the states with the most inbound moves. The states that ranked higher than Idaho, number 1 to number 9, were Oregon, South Carolina, North Carolina, Vermont, Florida, Nevada, Texas, District of Columbia, and Oklahoma.

Michael Stoll, chair of the University of California Department of Public Policy, economist and professor stated, “With economic stability growing nationally, the current migration patterns reflect longer-term trends of movement to the southern and western states, especially those where housing costs are relatively lower, climates are more temperate and job growth has been at or above the national average, among other factors.”


Thursday, January 15, 2015

New Fannie Mae Appraisal Program: Helping or Hurting?

I found this information to be a bit concerning. I certainly do not want to go back to the free wheeling days that led to our housing crash, but this seems like overkill.
New Fannie Mae Appraisal Program: Helping or Hurting? | Keeping Current Matters Every home must be sold TWICE! Once to the buyer, and once to the bank appraiser if a mortgage is involved.

The second sale may have just become more difficult.

A new program announced by Fannie Mae may slow down the home-sale closing process by causing more disputes over prices between sellers and buyers. In a recent Washington Post article they explained the basics of the program:
“Starting Jan. 26, Fannie plans to offer mortgage lenders access to proprietary home valuation databases that they can use to assess the accuracy and risks posed by the reports submitted by appraisers.” “The Fannie data will flag possible errors in the appraiser’s work before the lender commits to fund the loan, will score the appraisal for overall risk of inaccuracy and may provide as many as 20 alternative “comps” — properties in the area that have sold recently and are roughly comparable to the house the lender is considering for financing but were not used by the appraiser.”

Using the additional information provided by Fannie Mae, the lender can then ask for an explanation from the appraisal company for any discrepancies and request an amended appraisal. This added step in the process of determining the price of the home to be bought/sold, could add time to the closing process and cost to the appraisal for the additional work.

Why is this happening?

Fannie Mae wants lenders to make informed decisions when agreeing to the amount of a loan that a buyer will be approved for.
“Excessive valuations create the risk of future losses to lenders and investors if the borrower defaults and the house goes to foreclosure.”

What is the process now?

As a seller:

You’ve put your house on the market, picked an agent who has helped you determine that the best price to list your home for is $250,000, and found a buyer willing to pay that price. The appraiser comes to the home and agrees your home is worth the asking price and writes their report. Everything is working perfectly!

As a buyer:

You’ve found your dream home, in the right neighborhood, in the right school district, with the perfect yard, at the high end of your budget, but all the pluses are worth it. You agree on a price and start daydreaming about living in your new home.

What happens after January 26th?

The lender submits the appraisal report to the new Fannie Mae program and they come back with “lower-risk comps” that value the home at $230,000. The lender then turns to the appraisal company to justify the $20,000 difference, adding time and frustration to the process. If the lender does not agree with the reasons for the price difference they will not lend the buyer the amount they need to purchase their dream home and the amicable, agreeable sale turns into a heated justification of the higher price. The buyer may even have to give up on the home if the funding isn’t there. An article by Housing Wire shares the appraiser’s point of view:
“The bottom line, appraisers say, is this could lead to delays to closings and higher costs, as well as a depression of prices in markets where prices are rising. Appraisers complain that if they have to justify every step of their comps for their valuation, rather than those coming from the one-size-fits-all evaluation from Fannie, it will delay closing, throw off buyer and seller timetables, and delay real estate broker commissions.”

Bottom Line

The fear of some real estate practitioners is that if appraisers feel as though they are constantly being second-guessed, they may become more conservative in their assessments, impacting home values and slowing growth in the market.


Wednesday, January 14, 2015

December Market Report – That Sure Was Fun

December Market Report – That Sure Was Fun

by marclebowitz

January 12, 2015, 2015

by Marc Lebowitz · Leave a Comment

Single family home sales in December 2014 were 597 in Ada County, an increase of 3.5% compared to December 2013.  YTD total sales are down 2.5% compared to this time last year; 7,764 homes sold compared to 7,7,964.

Total dollar volume for December was $154M (up 8% over December 2013). Year-to-date dollar volume is $1.91B compared to $1.85B in 2013.

Consistent with the rest of 2014, sales of homes in December priced above $160,000 showed increases in every price category.

Average Days on Market in December were 66; nine more days than last month. In December 2013, Days on Market was 59.

New homes sold in December totaled 129; down 5% from last year.

Existing home sales were 468; up 6% from December 2013.

Historically December sales decrease from November levels by an average of 2%.   This year there was an increase of 11%.

Pending sales at the end of December were 712; up 4% compared to December 2013. Pending sales are our best “forward looking” indicator. December 2014 is the first month all year to have an increase in year-over-year “Pending Sales”….talk about a home run in the bottom of the ninth inning!

December median home price was $214,000; up 8% from December 2013. Our YTD median price is $210,000; up 6% over last year.

New Homes median price for December was $301,850; up 8% from December 2013. For Existing homes the increase is 6% to $194,600.

The number of houses available for sale at the end of December decreased 25% from November 2014 to 1,947. This is down slightly to last year.

As is typical this time of year, inventory contracted in all price categories for December.

Consistent what we’ve been observing regarding inventory, homes in the $120,000 – $160,000 shrank more than any other price point.

In Ada County we now have 3.5 months of inventory on hand, essentially unchanged from the end of July.

The price categories in shortest supply are $100,000 to $119,000 which has 1.3 months; and $120,000 – $159,000 which has 1.8 months.

From $200,000 to $400,000 we have 4 months available.

Of sales in December, the two strongest price points were $120,000 to $160,000; up 17% from November and $160,000 to $200,000; up 12%.

In the end, sales fell a little short of what we expected. We’re seeing the same picture nationwide. Because of the solid median price appreciation, dollar volume will be well ahead of last year.


Tuesday, January 13, 2015

Migrating out of the Basement

Kids moving out on their own is leading to more economic growth!

Good news for moms and dads! Now, Goldman Sachs reports in a circular for clients that while it’s still elevated, the number of twenty-somethings living at home seems to be on the decline!


With more millennials spreading their wings, the rental market is continuing to thrive. Occupancy and rent growth have been at their highest levels since the turn of the 21st century.



Monday, January 12, 2015

Existing Home Sales Report

Starting 2015 with a Bang!

Oftentimes sellers like to wait until spring to sell with better weather, nicer looking lawns and a perceived a better time to sell. I have posted here previously (November 12, 2014) statistics that show homes sell a week faster along with a higher percentage of selling.

A couple of personal stories to illustrate that point. I listed a horse property about a week ago north of Middleton, and it is now pending as of Saturday. Less than a week on the market! (Full price by the way.)

On a different property I received two offers in the last two days! This home has been lifted a couple of months but now two offers in January.  Moral of this story, there are buyers looking, today.

And remember you can always pay more to sell your home, but why would you want to? Call me, Roger, at Lowes Flat Fee Realty when you are ready to sell. 208-602-0055

FHA to LOWER Insurance Premiums!

In a major development, the FHA announced it would reduce the annual mortgage insurance premium it charges on new FHA loans from 1.35% to 0.85%. This change, to be implemented near the end of January, in effect will lower mortgage payments on FHA loans the same as a 0.50% reduction in rates. Lower rates have made home ownership more affordable, and this change reduces the cost of ownership even more. The reduction will benefit many people, particularly first-time home buyers, due to the low down payments and relaxed credit standards associated with FHA loans.


On a $200,000 house, here’s what it will look like:

OLD monthly MI - $220.92/month

NEW monthly MI - $139.10/month!!!!!



Wednesday, January 7, 2015

Horse Property-New Listing

Just listed this nice horse set-up, located north of Middleton with 2.99 acres. Complete with 4 stall horse barn, dry pen, auto-frost free waterers, large arena. House has been completed updated, if you are looking for horse property-come take a look!

The Barn

Priced at $269,000 Give me a call for more information. MLS#98574769

Tuesday, January 6, 2015

#1 Reason to Sell Now!

#1 Reason to Sell Now | Keeping Current Matters If you are one of the many homeowners out there who are debating putting their home on the market in 2015, don’t miss out on the opportunity that currently exists. There will be significantly less competition in the winter months than in the spring. According to the National Housing Survey released by Fannie Mae, 45% of homeowners “say mortgage rates will go up in the next 12 months.”

What Does This Mean?

Homeowners are unaware that interest rates are projected to go up by all four major reporting institutions – This is big news for move-up buyers reflecting the overall amount of housing inventory that will be on the market. If existing homeowners believe that mortgage interest rates are not going to increase, then they won’t be inclined to make a move by putting their home up for sale, meaning less competition for sellers who list now.

Don’t Wait!

The study also revealed that:
“Those who say it is a good time to buy a house rose to 68%” & “the share of respondents who think it would be difficult to get a home mortgage today decreased by 3 percentage points.”

As Doug Duncan, senior vice president and chief economist at Fannie Mae explains:
“We expect consumer attitudes toward housing to improve as the pickup in the overall economy lifts employment and income prospects.“

Bottom Line

There are buyers out there who are ready to make a move. If your goal this year is to move up to your dream home, what are you waiting for?