What Do Americans Think About the Current Housing Market?

Photo: © Steve Greer - iStockphoto

Home buyers and investors alike are trying to gauge the health of the real estate market. One of the best ways to predict sales figures is to ask Americans if they plan on buying. The Fannie Mae National Housing Survey of May 2012 reported on the attitudes of 1,002 polled Americans toward the real estate market and the economy. The answers reflect the current—and the future—state of the housing market.

Higher Home Prices

Seventy-two percent of survey respondents believed that the current real estate market

was a good one to jump into, a one percent increase over the previous month. A much smaller 15 percent of respondents thought market conditions favored sellers. The reason—many respondents expected home prices to increase by an average of 1.4 percent, the highest value yet recorded in the National Housing Survey. This increase would incentivise many Americans to start their home searches before prices rise, while encouraging sellers to wait for a higher asking price. Another reason for the positive outlook is the belief of 41 percent of respondents that home mortgage rates will increase over the next year; buyers want to lock in their mortgages before rates increase.

Downturn in Personal Finances

Yet only 63 percent of those surveyed would buy in today's real estate market, down from 64 percent in April and 66 percent in March. This could be due to the answers respondents gave to questions about personal finances. Twelve percent of respondents expected to see a decline in their financial standing, while 46 percent expected their financial situation to stay the same over the next 12 months. Fifteen percent of those questioned stated their household income is lower than it was a year ago.

Positive Signs

While 32 percent of those surveyed said their expenses had increased significantly in the past year, that is the lowest value reported in the history of the survey and a four percent decrease from the month before. And a record-high 38 percent of respondents believed the economy was starting to improve.

Rising Rents

Survey respondents also foresaw an increase in rental prices. Forty-nine percent—the highest percentage recorded to date—believed rental prices would rise. On average, respondents expected rents to increase by 4.1 percent over the next year. It could be the rising rents, or it could be the dream of home ownership, but when respondents were asked what they would do if they were to move, only 32 percent would rent while 63 percent would buy.

Americans are approaching the American dream with a little more caution, keeping their finances and the future of the economy in mind—an approach that can only help the long-term stability of the housing market.

This Article was written for my NOLA Westbank Homes Newletter for July: Realty News

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3 Things You Should Know About Short Sales

Having a Realtor can bring some stability into a Short Sale transaction, but everyone needs to realize that a short sale’s success depends on a variety of issues.  This type of transaction is constantly evolving; however there are a few things that remain the same and any Seller considering a Short Sale will need to understand.

Market Value Matters

Short sales sell for market value.  You heard this correctly!  A bank will generally agree to a short sale if the numbers make sense.  Banks realize that homes need to appraise and Banks also need to mitigate their loss.  Therefore, having a home listed for well below market value is not the best strategy for getting an approved short sale.  It's true you may get plenty of offers, but if the bank won’t accept any of them you end up having wasted a lot of energy,  face disappointment and several angry potential buyers.

Banks are no longer in the business of giving away houses.  The banks need numbers that make sense. So when the figures make sense, the likelihood of a successful short sale closing is 90%.

Only Real Hardships Get the Help

I’ve heard of many potential sellers say the only reason they are pursuing a short sale is because everyone else is doing it.  Purchasing a house during the housing boom is not a legitimate hardship.  If you purchased a house during that time period and now you are unable to pay your mortgage - that is a hardship.

Strategic default is never a good idea! Banks actually analyze short sale sellers’ hardships, and most center on the economy, so the bank is going to make sure that a short sale is in their own best interest.  Acceptable hardships include medical issues, divorce, disability, significant loss of income, death, unemployment, and relocation.

Short Sale Laws are Local to Your State

There are currently no national short sale laws on the books.  There are federal guidelines, but they can be applied when and how a bank wants.

In the Short Sales I have done in my state, when the short sales are completed the deficiency amounts were forgiven for homes which were the primary residence of the Sellers.  But this may not be the case in all states, or when the home was not owned for the purpose of the primary residence.

States can either have recourse loans or non-recourse loans.  A recourse loan allows the bank to demand a borrower pay the difference between what the property is sold for and what is owed on the lien.  Many recourse states allow lien holders (banks) to pursue judgment liens against the borrower for the deficiency amount.  This process allows the bank to garnish a borrower’s wages until the debt is paid off.  Garnishments can be as much as 25% of non-exempt disposable earnings, and bankruptcy doesn’t always save a defaulted borrower from judgment liens.

Remember - Your Real Estate agents is not allowed to practice law, unless they are actually licensed to do so. However, Realtors are required to be aware of possible penalties for short selling a home and also be able to direct their clients to the right resources to discuss the possible consequences and solutions.  So it is important to consult with your Realtor and your CPA.

Short sales can be complicated to navigate, so don't try to do it alone.  But for those of you who qualify and require some much-needed relief, remember, it is important to have an experienced Realtor to help you. 

Note: This article also includes information summarized from the Trulia website provided as a service to Realtors.

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NOLA Westbank Housing Market Stats 2010 vs 2009 - How Did We Start 2011 ?

On the Westbank, we started January 2011 with similar number of listings on the market as January of 2009 & 2010.  Number of Sales, for the month of January, are slightly higher with 84 solds in 2011 compared to 77solds in 2009 and 74 in 2010.  Sellers appear to becoming more realistic in asking price with the overall average listing price in January 2009 at $196,247 to $188,174 in January 2010 until now in January 2011 at $169,366. 

Although, the average listing price of the homes that actually sold were still much lower as the chart below shows comparison of January 2009, 2010 and 2011:

(Click on any chart below to enlarge)

This table below compares statistic totals for all of 2009 to 2010 for Single Residential Homes on the Westbank:

This chart above shows in % the following:

• Only ↑ 1.5% # Listings in 2010 over 2009
• Average Listing Price of All Listings ↓ 9.3% 2010 over 2009
• # Sales ↓ 8.6% 2010 over 2009
• Average Listing Price of Sold Listings ↓ 5.9% 2010 over 2009
• Average Actual Sold Price↓ 6.2% 2010 over 2009
• DOM (Days on Market) ↓ 7.4% 2010 over 2009

The overall inventory of homes on the market, measured in number of months, were very similar in 2010 @15 months to 2009 @ 14 months.

The following charts show the month to month comparisons of statisitcs for Single Residential Home Listings and Sales on the Westbank:

 

 

 

 

 

Overall, it appears buyers are continuing to be very cautious, and spending at an average less on a home than in the past.  Therefore, the lower priced homes are selling the fastest and overpriced homes don't have a very good chance of selling...  although, the market still continues to stablize.  It is predicted by many experts that an abundance of foreclosures are going to be dropped into the market later this year and that another wave of mortgage tightening in on it's way.  If this is the case, and you have been waiting for the right time to sell a home, now is the time to do so.

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Foreclosure Resource Guide - Buying A Home Again After A Foreclosure?

Last week we discussed how foreclosures are still on the rise, the affects on the community and how a Short Sale can be an alternative for a homeowner.  But what about those who have been through a Foreclosure?   When can they buy a home again?


Your credit score will take a major hit after a foreclosure, but there are guidelines to follow when you're ready to be a homeowner again.  If credit is reestablished after the foreclosure, and depending on the type of loan you will use to buy your next home, it can take between 3 - 7 years to be accepted for a home loan.  In the link below, you will find a chart which will outline the present standards set by FHA, Freddie Mac and Fannie Mae for the wait time on these loan types for those who have gone through Foreclosure, a Short Sale, or Bankruptcy.  With discipline and perseverance, you can again be in a position to obtain a home loan. The next link below will give you a 5 step guideline on how to reestablish your credit and become a homeowner again.

• 
  

  (New!)

  When is Foreclosure Removed from Your Credit Report?

  Use this handy guide to figure out how quickly you can buy a home after a major financial setback when applying for a loan through FHA, Fannie Mae, or Freddie Mac. Read
• 

  5 Steps to Owning a Home Again After Foreclosure

  Foreclosure is just a one-time event—with discipline and perseverance, you can get a mortgage and become a homeowner again. Read

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Handling the Foreclosure Crisis

Foreclosures are still on the rise. On January 13, 2011 City Business reported that the New Orleans area had the 95th highest foreclosure rate in 2010 among 203 markets tracked nationwide. Foreclosure activity was up 36.25 percent over 2009 in the area comprised of Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John and St. Tammany parishes. There were 7,822 filings for a foreclosure rate of one in every 57 housing units.

If you or someone you care about are one of the many homeowners worried about this happening to you, are you asking yourself, "Where do I turn for help?"  First let me say that there is nothing to be embarrassed about and there are many other people in your position.  You need to seek help now before the problem gets worse.  Most people are afraid to turn to their local Realtor because they think they will have to pay money out of pocket that they don't have.  What they don't realize is that an experienced Realtor in the area of Short Sales and Foreclosure can actually help them, and most of the time without the homeowner spending any extra money.  You can talk to your Realtor to find out if a Loan modification is best for you, or if selling your home would be best.  They can show you what questions to ask your Mortgage Company, or in some cases with your authorization, talk to them for you.

Maybe you are not the one facing foreclosure but worried because it is happening all around you.  Below are several links to more resources to guide you.  This will explain more on how to talk to your Mortgage Company, what a short sale is and how this may help you.  If you are a homeowner in a neighborhood with foreclosures, you may want to read up on how this will effect you. 

Our next Blog will be the next Chapter on Foreclosures to continue this Foreclosure Resource Guide.  So please tune in...

• 

  Foreclosure Alternative: The Short Sale

  A short sale is far from hassle-free, but it’s a better alternative than foreclosure. And now you’ve got a little help from your friends in D.C. Here are the facts about short sales and how to get started. Read
• 

  How the Foreclosure Crisis Costs You Money

  Foreclosure may seem like someone else’s problem, but when it happens in your neighborhood, it’s going to cost you money, too. Read
• 

  How to Talk to Your Lender About Foreclosure

  When facing foreclosure, the first step is to get in touch with your lender to discover your options. Read

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WESTBANK SINGLE HOME SALE STATS AS OF OCTOBER 2010

See charts below for Westbank Single Family Home Statistics and compare 2009 numbers to 2010 as of October (Click each Chart to Enlarge):





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Dos & Don't of Selling Your Home

Many people think that selling a home is easy.  All you have to do is put a sign in the front yard and wait for people to call.  The fact of always being available for phone calls and that many calls are from people that are just being nosy is not considered.  Neither is all the paperwork involved and legal issues that they are leaving themselves wide open for.  Selling your own home can become your part-time job that needs your full time attention.  Having a Real Estate Agent has many more advantages than you might think and actually save you money instead of costing you more.  Most people selling their home on their own have no idea how to price their home or how to keep up with price checks in the current market.  Buyers see these homes as "Discounted Properties" instead of a regular listing, therefore, you could actually make less selling your own property than if you paid for professional help.  Your local Real Estate Agent can give you up to date information on comparable homes as well as insight on what you need to do to get your home ready for the market...    and also much more. 

A good Realtor can save you much time, money and stress in selling your home.

 

If you are selling yourself, or even if you have an agent, you still want to be aware of what buyers are thinking about your home and how you can win them over.  Most buyers will not be as honest with a homeowner than they would with a Realtor.  Below are links to 3 articles written for House Logic that give more information on dos and don'ts of selling your home, as well as pricing.  If you still need help, give me a call.

• 
  

  (New!)

  Pet Odor Can Chase Away Buyers

  Don’t let pet odors derail your home sale. Read
• 

  Dos and Don’ts of Homebuyer Incentives

  Homebuyer incentives can be smart marketing or a waste of money. Find out when and how to use them. Read
• 

  How to Use Comparable Sales to Price Your Home

  Before you put your home up for sale, use the right comparable sales to find the perfect price. Read

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Is It Time To Make Repairs in Your Home... Or Just Replace the Items?

When Plumbing, Heating, Roofing problems exist in your home, or when any large appliance fail, it can be a very heavy load on your mind as well as your checkbook.  You don't want to go through the expense of replacing if you can spend a lot less money to fix the problem and it will not break again for some time. So should it be replaced or repaired?  How do you know?

Below are informational links from HouseLogic to explain how you can decide.  These articles were written by experts who can guide you through to make good decisions:

• 

  Do You Need to Replace Your Plumbing?

  What to look for and consider to determine if you should replace plumbing and deteriorating pipes. Read
• 

  Heating Equipment: Repair or Replace?

  The decision to repair or replace heating equipment depends on its age, the cost of repair, and how much money a more efficient system will save you. Read
• 

  Roofing: Repair or Replace?

  Deciding whether to repair or replace roofing is largely an exercise in timing—you don’t want to reroof too soon and waste money, but you don’t want to wait too long either. Read
• 

  Water Heaters: Repair or Replace?

  When deciding whether to repair or replace a water heater, consider its age, the severity of the problem, and how much money a new energy-efficient unit will save. Read
• 

  When to Repair or Replace Large Appliances

  When deciding to repair or replace appliances, consider age, repair cost, pricing, energy efficiency, and whether to modify your kitchen to accommodate a new unit. Read

Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®

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National Housing Trends

June housing sales were up for the 10th month in a row as closed units were up 11.4 % over June 2009 while prices climed 8.8% for the same period.  All regions of the country were up in both units closed and average prices.  The main reasons are believed to be the continued impact of the tax credit and low interest rates.

In both our region here in the South and the Midwest, June 2010 housing units rose 8.5% over June 2009.  The highest increase is in the Northeast which rose 28.3% over June 2009, the strongesat results for any region for the sixth consecutive month.

The increase in housing sales for the 10th month in a row where housing sales for the present month were above the same month from the prior year; and price increases just hit their 7th month in a row on the same basis.  Housing sales for the entire year are expected to be above the level of 2009 in the range of 4-7% even with a decline in this year's second half.  Home prices will continue to strengthen for at least the next three months but may level out thereafter.  The upper price end  of most housing markets remains soft at this time with no significant recovery in sight at this time.

Below are charts with more information graphs showing Home Sale trends including Housing Inventory, Mortgage Rates and Affordability nationwide:

In my post to come I will give you an update of the local housing sale statistics.

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