Meagan 's Blog

Record Streak Continues for Pending Home Sales

Meagan Groghan (Realty One Group) — Thu, 01 Oct 2009 14:23:08 -0500

Daily Real Estate News | October 1, 2009 |

Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.

Lawrence Yun, NAR chief economist, said not all contracts are turning into closed sales within an expected timeframe. "The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules," he said. "No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month."

The Pending Home Sales Index in the Northeast jumped 8.2 percent to 85.3 in August and is 12.0 percent higher than August 2008. In the Midwest the index rose 3.1 percent to 90.8 in August and is 7.6 percent above a year ago. In the South, pending home sales increased 0.8 percent to an index of 104.6 and is 8.2 percent above August 2008. In the West the index surged 16.0 percent to 130.5 and is 22.3 percent above a year ago.

"There is likely to be some double counting over a span of several months because some buyers whose contracts were cancelled have found another home and signed a new contract to buy," Yun explained. "Perhaps the real question is how many transactions are being delayed in the pipeline, and how many are being cancelled? Without historic precedents, it's challenging to assess."

Yun also noted that the data sample coverage for pending sales is smaller than the measurement for closed existing-home sales, so the two series will never match one for one.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said first-time buyers need to act now. "Potential first-time buyers must make a contract offer very soon to have a reasonable chance of qualifying for the tax credit," he said. "Congress needs to extend and expand this program because it's stimulating the economy and reducing inventory close to price stabilization points."

McMillan said a sizable number of homebuyers already in the pipeline could be let down because of the tight deadline. "We know there is a pent-up demand because sales are below normal levels for the size of our population. The faster we absorb excess inventory, the sooner we'll turn the corner on home prices, prevent additional families from becoming upside-down in their mortgages, and give Wall Street the confidence to extend credit to other sectors," he said. "Each home sale pumps an additional $63,000 into the economy through related goods and services, so the benefits of extending and expanding the tax credit far outweigh the costs."

Yun said the forecast for home sales and prices depends very much on whether a tax credit is extended. "All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession," he said. "Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit."

Bargains Hard to Find In Attractive Areas

Meagan Groghan (Realty One Group) — Mon, 11 May 2009 16:00:40 -0500

Daily Real Estate News | May 5, 2009 | Share

Potential buyers in areas that were hard hit by the housing downturn have read about bargains, but only find it disappointing when they go shopping.

"Every open house I've been to has been a zoo," says first-time home buyer Sam Rivero, who has looked at 35 properties during the last three months. "If you follow what the media say, you'd think sellers are desperate to sell a house, but when you get there it's totally the opposite."

When the real estate bubble burst, it didn't affect the mid-priced market, said real estate information firm MDA DataQuick. Instead, it created opportunities in troubled neighborhoods and slowed sales in the market of homes priced above $1 million. But in areas where most of the homes sell for $400,000 to $800,000, there are few discounts to be found.

Even the foreclosure market has slowed, says University of Southern California Professor of Real Estate Tracey Seslen. Seslen said lenders with foreclosures are supporting market stabilization and releasing only a few homes at a time to avoid flooding the markets.

"The biggest problem," says Phyllis Harb, an associate with RE/Max Tri City in La Canada, Calif., "is that people are overreacting to housing statistics, thinking they can come in and make an offer 20 percent below price."

Home Sales: Some Welcomed Signs of Life

Meagan Groghan (Realty One Group) — Thu, 09 Apr 2009 13:06:55 -0500

Daily Real Estate News | April 9, 2009 | Share

Home Sales: Some Welcomed Signs of Life
The hardest-hit housing markets -- Florida's Gulf Coast, California's Inland Empire, and Las Vegas, among others -- experienced a more than 80 percent jump in home sales during the year-over-year period ended in February.

In Cape Coral, Fla., which had the highest foreclosure rate in the nation in 2008, there are even bidding wars. Experts say bargain foreclosures, low interest rates, and the $8,000 federal tax credit are helping first-time buyers and investors.

These buyers also have an advantage because they do not have to sell a current home to close the deal. However, experts note that the housing market will not recover until banks loosen their lending standards; and these markets could experience another downturn if interest rates rise and the tax credits disappear.

Source: Business Week, Christopher Palmeri, Maria Der Hovanesian, and Gopal Prashant (04/09)

First Time Home Buyers Drive February Sales

Meagan Groghan (Realty One Group) — Mon, 23 Mar 2009 12:55:34 -0500

Daily Real Estate News | March 23, 2009 | Share First-time Home Buyers Drive February Sales
Existing-home sales increased in February, reversing losses in January, according to the latest report by the NATIONAL ASSOCIATION OF REALTORS®. However, sales activity remains relatively soft, reflecting additional layoffs and buyers waiting for housing provisions in the economic stimulus package to take effect, according to NAR.

Existing-home sales- including single-family, townhomes, condominiums and co-ops-rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January. Existing-home sales are 4.6 percent below the 4.95 million-unit level in February 2008. Seasonal adjustment factors are more volatile in winter months, but sales rates over the past few months show dampened sales activity, according to NAR.

Lawrence Yun, NAR chief economist, says first-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges.

"Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February," he says. "Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price."

Home Buyer Tax Credit Increases Activity

NAR President Charles McMillan says home shopping activity has picked up with housing affordability at a record high.

"The number of buyers looking for homes rose 5 percent in February, and also was 5 percent above a year ago," he says. "It appears most of the increase in buyer traffic occurred in the latter part of the month after the $8,000 first-time buyer tax credit was put in place. At the same time, mortgage purchase applications have risen, so we expect to see sales picking up around late spring."

McMillan notes that more potential buyers are learning about the tax credit, just as the traditional spring home-buying season begins.

Existing-Home Sales Rise in February

The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago when the median was $195,800 and conditions were close to normal. The median is where half of the homes sold for more and half sold for less.

"Given the downward distortion in price comparisons due to distressed sales, it's important for owners to keep in mind that this doesn't equate to a similar loss of value for traditional homes in good condition," Yun says.

Housing inventory: Total housing inventory at the end of February rose 5.2 percent to 3.80 million existing homes available for sale, which represents a 9.7-month supply at the current sales pace, unchanged from January. In the six months prior to February, the total number of homes for sale had steadily declined from a record level last July.

Single-family home sales: rose 4.4 percent to a seasonally adjusted annual rate of 4.23 million in February from a level of 4.05 million in January, but are 3.6 percent below the 4.39 million-unit pace in February 2008. The median existing single-family home price was $164,600 in February, down 15 percent from a year ago.

Existing condominium and co-op sales: increased 11.4 percent to a seasonally adjusted annual rate of 490,000 units in February from 440,000 units in January, but are 13.1 percent lower than the 564,000-unit pace a year ago. The median existing condo price was $172,200 in February, which is 18.7 percent lower than February 2008.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 5.13 percent in February from a record low 5.05 percent in January. The rate was 5.92 percent in February 2008. Last month's average mortgage rate was the second lowest since data collection began in 1971. Last week the rate further declined to 4.98 percent.

Regional Breakdown

Yun says a recovery in the West is much stronger than expected. "Strong sales gains in the West are led by California, where the median listing price is beginning to rise for the first time in three years," he says.

Here's how existing-home sales fared across the country:

Northeast: jumped 15.6 percent to an annual pace of 740,000 in February, but 14.9 percent below February 2008. Median price: $251,200, down 4.8 percent from a year ago.
Midwest: increased 1 percent in February to a pace of 1.04 million but 14 percent lower than a year ago. Median price: $131,000, which is 7.8 percent below February 2008.
South: rose 6.1 percent to an annual pace of 1.74 million in February but 11.2 percent below February 2008. Median price: $146,700, down 10 percent from a year ago.
West: increased 2.6 percent to an annual rate of 1.2 million in February and remain 30.4 percent higher than a year ago. Median price: $204,600, which is 30.3 percent below February 2008.

6 Tips for Home Owners Who Turn Into Landlords

Meagan Groghan (Realty One Group) — Mon, 02 Mar 2009 11:30:40 -0600

Daily Real Estate News | March 2, 2009 | Share
Home owners who decide to rent out their properties have to stop thinking of themselves as home owners and instead consider themselves as running a small business, experts say.

Thinking like a businessperson means focusing on the monthly cost of maintenance, mortgage and taxes, as well as being aware of landlord-tenant regulations and avoiding liabilities.

Here are key issues to consider:

Set a fair rent. Setting the right price will make it more likely that a landlord will be able to keep the place rented.
Understand landlord-tenant rules. Running afoul of landlord-tenant regulations and rules regarding security deposits can be costly.
Screen applicants. Eliminating potential tenants who can't pay or who won't take care of the property is very important.
Lay out the rules in a lease. Widely available sample leases can help. If you have questions, ask an attorney.
Consider a property manager. Despite the expense, turning the job over to experts can help a landlord come out ahead.
Talk to the condo association. If the property is a condominium, be prepared to deal with a host of regulations.

Source: The Washington Post, Renae Merle (02/28/2009)

Who Will be Eligible for Foreclosure Help?

Meagan Groghan (Realty One Group) — Mon, 23 Feb 2009 11:28:45 -0600

Who Will be Eligible for Foreclosure Help?
With the federal government hoping to finalize details for its $75 billion foreclosure prevention program by March 4, officials are fine-tuning eligibility requirements.

So far, they are targeting borrowers who spend more than 38 percent of their earnings to make loan payments on primary residences.

The Mortgage Bankers Association wants the Obama administration to broaden the refinancing component of the initiative, noting that the threshold of 105 percent of a home's current property value is inadequate to help home owners in battered housing markets like Arizona, California, and Florida.

Source: Washington Post, Renae Merle (02/20/09)

Fannie Eases Its Investor Loan Rules

Meagan Groghan (Realty One Group) — Tue, 10 Feb 2009 15:23:31 -0600

Daily Real Estate News | February 10, 2009 |

To speed recovery of the housing market, Fannie Mae in March will begin purchasing and guaranteeing mortgages for borrowers carrying loans on as many as nine other properties, up from the current limit of three. However, the number of months of reserve payments that must be held by investors will rise to six in June from two currently. "One of the things that leads the economy out of a housing crisis is when prices get cheap enough that investors start moving in and buying things," says Joe Garrett of the Berkeley, Calif.-based consulting firm Garret, Watts & Co.

Source: American Banker, Harry Terris (02/10/09)
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Housing Inventories Fall in 29 Major Markets

Meagan Groghan (Realty One Group) — Tue, 10 Feb 2009 15:22:16 -0600

Daily Real Estate News | February 10, 2009 | Share

The inventory of existing homes for sale in 29 major markets covered by ZipRealty declined an average of 2.5 percent in January 2009, compared to December 2008 and down 13 percent compared to January 2008.

This is a good sign, especially when considering that typically inventories rise in January after the holidays. In the last 25 years, the average increase in inventory in January has been 8.7 percent, according to Ivy Zelman, CEO of research firm Zelman & Associates.

Housing-market analysis Altos Research reached similar conclusions, saying that the listings in its 10-city composite index declined 3.3 percent in January compared to December 2008.

This data doesn't include New York City, where appraisal firm Miller Samuel Inc. reports that inventories were at the highest level in the last decade, up 6 percent from December and 36 percent from January 2008.

Source: The Wall Street Journal, James Hagerty (02/10/2009)

America's Fastest-Growing Towns

Meagan Groghan (Realty One Group) — Tue, 10 Feb 2009 15:20:15 -0600

I thought this was interesting. Being in Las Vegas, our residents know that Summerlin is a large Master Planned Development (neighborhood) within Las Vegas, and not a city, so the fact that it was singled out is interesting, but even more interesting is how much more it grew as compared to the other "growth" areas.

Daily Real Estate News | February 10, 2009 | Share

In the last decade, there have been hundreds of communities in every state that have seen significant growth in new homes. Many of them are outside the urban core and often far from established centers of employment. In a new report, BusinessWeek poses the question: Will the current economic slowdown put an end to these communities?

"The boomtowns of this decade are not booming so much in the last couple years," said William H. Frey, a demographer at the Brookings Institution in Washington, D.C., tells the magazine. "It's possible those places will come back again. A lot depends on where the economy grows and where the new knowledge centers are."

BusinessWeek worked with Gadberry Group, a business location company, to identify communities in every state that have experienced the largest growth. The results were published in a report called "America's Biggest Boomtowns."

The top ten fastest-growing communities:

Summerlin South, Nev., 618 percent
Katy, Texas, 168 percent
Wentzville, Mo., 160 percent
Spring Hill, Tenn., 157 percent
South Carolina, 156 percent
Brighton, Colo., 153 percent
Wesley Chapel, Fla., 151 percent
Lehi, Utah, 110 percent
Canton, Ga., 99 percent
Oswego, Ill., 98 percent

Source: Business Week, Prashant Gopal (02/06/2009)

Mortgage Applications Soar on Monday

Meagan Groghan (Realty One Group) — Tue, 09 Sep 2008 12:03:23 -0500

Daily Real Estate News | September 9, 2008
Mortgage brokers say Monday was the busiest day they can remember in the last couple of years.

The average rate for a 30-year fixed-rate loan fell to 6.04 Monday, about a third of a percentage point lower than on Friday, before the federal takeover of Fannie Mae and Freddie Mac.

On a $200,000 loan, that's about a $500 annual savings - significant but not enough to turn around the housing market, analysts say.

Nevertheless, at online mortgage firm Quicken Loans, applications Tuesday were more than double what they had been in recent weeks, says Bob Walters, the firm's chief economist.

Source: The Washington Post, Dina ElBoghadady and Renae Merle (09/09/08)

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Why This Autumn is a Great Time to Buy

Meagan Groghan (Realty One Group) — Tue, 09 Sep 2008 12:02:35 -0500

Daily Real Estate News | September 9, 2008
This fall could be a particularly great time for first-time or buyers long out of the market to jump in, say a variety of real estate professionals.

Here are the reasons why:

Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.

Interest rates are likely to decline as Freddie and Fannie get government help.

The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.

The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. People scraping dollars together for a down payment should try to set their closing for the end of this month.

The tax credit will shave $7,500 off a first-time buyer's federal tax bill due April 15. Buyers who don't owe tax, will get the money as a refund.

The government's definition of a first-time buyer is anyone who hasn't owned a home in the last three years.

Source: The Washington Post, Elizabeth Razzi (09/07/08

NAR Forecast: Home Sales to Hold Steady

Meagan Groghan (Realty One Group) — Tue, 09 Sep 2008 12:01:35 -0500

Daily Real Estate News | September 9, 2008

The level of home sales is expected to show little movement in the months ahead, according to the latest projections by the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, fell 3.2 percent to 86.5. In June, the Index was at 89.4, which was a 5.8 percent jump from May. The July index remains 6.8 percent below July 2007 when it stood at 92.8.

Lawrence Yun, NAR chief economist, says home sales continue to edge up and down. "Pending home sales are oscillating month-to-month, with the long-term trend essentially flat," he says. "Overly stringent lending criteria imposed by Fannie Mae and Freddie Mac in the past month no doubt held back contract signings."

Looking at middle-ground assumptions, existing-home sales are projected to total 5.01 million this year before rising 6.9 percent in 2009 to 5.35 million. After declining an average of 4 to 7 percent this year, home prices are forecast to rise by 2 to 4 percent next year.

New-home sales will total about 508,000 in 2008 and 463,000 next year, down significantly from 775,000 in 2007. With builders motivated to clear inventory, housing starts, including multifamily units, will probably fall 17.1 percent in 2009 to 801,000 units from 966,000 this year.

Regional Markets Stable

Even with the latest pullback, pending home sales have been fairly stable on a national basis for nearly a year, with dramatic local market differences continuing, according to NAR.

"Contract signings have been steaming ahead, nearly doubling in activity from a year before in several California and Florida markets," Yun says. "The outer Washington, D.C., exurbs also are coming around very strongly. The Northeast region retreated following a robust gain in the previous month, and soft activity was observed in the broad midsection of America despite very affordable conditions."

Here's how the PHSI fared across the United States:

Midwest: rose 2.8 percent to 81.6 in July but remains 2.4 percent below a year ago.
South: unchanged, holding at 93.7, but is 13.4 percent below July 2007.
Northeast: fell 7.5 percent to 73.6 in July and is 13.2 percent below a year ago.
West: dropped 10.6 percent to 90.3 but is 6.5 percent higher than July 2007.

Factors Influencing the Market

NAR President Richard F. Gaylord says there's been a surge in FHA mortgage applications.

"Unfortunately, many people in high-cost areas aren't familiar with FHA programs, which is why we produced a toolkit so REALTORS®, lenders, and other real estate professionals can familiarize themselves with this increasingly valuable program," he says.

"FHA is taking a more active role in serving a broad cross section of home buyers, but it will take some time to fully get up to speed. We're working with regulators to improve the process, and the good news is that this is becoming a big help to first-time buyers," Gaylord says.

Yun says there are many ambiguities in the marketplace.

"The economy is producing more, yet cutting jobs. A first-time home buyer tax credit and lower interest rates on newly conforming jumbo loans favors consumers, yet buyer confidence remains low," he says. "Even with the Treasury Department's direct intervention in the secondary mortgage market, it is unclear if we will go back to sound normal underwriting criteria, or if it will remain overly stringent. The housing market outlook is very cloudy."

Yun mentioned that the speed and timing of a recovery depends on local market conditions.

"Based on local market fundamentals, I expect robust home price growth in places like Denver and Houston over the next two years," Yun says. "In addition, the frequent reporting of multiple bids in California and Florida may be signaling a bottom in home prices in these areas. Nationally, home sales are stable now but are expected to increase in coming quarters."

Other factors influencing the housing market:

Mortgage rates: The 30-year fixed-rate mortgage, which also has been moving up and down, should trend up to 6.6 percent by the end of this year, edging up to 6.7 percent in 2009. NAR's housing affordability index is likely to remain favorable throughout 2008, averaging 13 percentage points higher than last year.

Growth in the U.S. gross domestic product: The GDP is forecast to remain positive with a growth rate of 2.0 percent for all of 2008, and 2.0 percent also next year. The unemployment rate is estimated to average 5.8 percent over the coming year.

Inflation: As measured by the Consumer Price Index, inflation is anticipated at 3.8 percent this year and 1.6 percent in 2009. Inflation-adjusted disposable personal income is projected to grow 1.8 percent in 2008 and 2.1 percent next year.

Source: NAR

Chances to Buy Hip-Hop Mansions

Meagan Groghan (Realty One Group) — Wed, 27 Aug 2008 21:56:24 -0500

Daily Real Estate News | August 21, 20085

If you're in the market for a house that lives large, check out the homes of hip-hop stars currently for sale.

Some of these big names are just looking to move to a home that's still more extravagant. Others have run up against the same hard times that have hit many of their fans.

Here are the five hip-hoppers and the homes they are trying to unload:

1. Suge Knight. After he filed for bankruptcy and lost control of his record company, Death Row Records founder Suge Knight's $6.2 million mansion went up for sale last year.

2. Kanye West. The Grammy-winning rapper's six-bedroom, 35,000-square-foot Beverly Hills, Calif., mansion went up for sale six months ago for $8.7 million.

3. Russell Simmons. The Saddle River, N.J., manse of producer Russell Simmons is for sale for $20 million.

4. 50 Cent. Rapper 50 Cent's Farmington, Conn., 19-bedroom, 50,000-square foot mansion went on the market last year for $18.5 million.

5. Scott Storch. The hip-hop producer's $10 million mansion is located on Miami Beach's exclusive, manmade Palm Island. Storch, recently hitless and two years delinquent on property taxes, is facing foreclosure.

Source: Forbes, Peter Hoy (08/18/08)

Commerce Dept.: New Home Sales Rose in July

Meagan Groghan (Realty One Group) — Wed, 27 Aug 2008 21:53:20 -0500

Daily Real Estate News | August 27, 2008

New home sales in July rose 2.4 percent over the prior month to an annual pace of 515,000, the U.S. Commerce Department reported Tuesday.

At the same time, the number of unsold homes on the market fell 5.2 percent, marking the largest single-month decline since November 1963. Year over year, however, new-home sales were down 35.3 percent and the median new-home price slipped 6.3 percent to $230,700.

Nonetheless, some economists find the latest numbers reassuring.

"We're hopefully getting in the vicinity of a bottom,'' says David Resler, chief U.S. economist at Nomura Securities International Inc. in New York.

"The biggest declines, they're all behind us now," says Nigel Gault, chief domestic economist at Global Insight, a research firm.

Sales of new homes slipped in Midwestern and Southern states, according to the Commerce Department report, but rose in the Northeast and West. The median price of a new home in July was $230,700, down 6.3 percent from a year ago. Sales of new homes remained 35.3 percent below their level in July 2007.

Source: Bloomberg, Shobhana Chandra (08/26/2008)

Stabilization

Meagan Groghan (Realty One Group) — Fri, 22 Aug 2008 13:19:46 -0500

Daily Real Estate News | August 22, 2008Home Prices Are Down, but Stabilizing

U.S. home prices appear to be stabilizing even as foreclosures increase, says First American CoreLogic, a mortgage analysis company that released its home price index Monday.

Thirty-seven states are experiencing nominal price declines, which is the same as last month.

Nationwide, home prices declined 10.7 percent from June 2007 to June 2008. And home owners also are facing rising inflation, which makes declines more troublesome, says Mark Fleming, chief economist for CoreLogic,

The worst declines are in California and Nevada, where prices fell more than 20 percent year over year.

The news isn't so bad in other areas of the country where prices either fell less than 10 percent last year or they rose. Here are those metro areas:

Minneapolis-St. Paul-Bloomington, Minn., -8.65 percent
Chicago-Naperville-Joliet, Il., -7.25 percent
New York-White Plains-Wayne N.Y. and N.J., -7.06 percent
Edison-New Brunswick N.J., -6.77 percent
Atlanta-Sandy Springs-Marietta Ga., -6.15 percent
Detroit-Livonia-Dearborn, -5.93 percent
Seattle-Bellevue-Everett WA. -5.10 percent
Portland-Vancouver-Beaverton OR-WA, -5.08 percent
Philadelphia, -3.62 percent
Denver-Aurora CO, -2.78 percent
Charlotte-Gastonia-Concord, N.C., -1.49 percent
Honolulu, -0.89 percent
Raleigh-Cary N.C., -0.48 percent
Dallas-Plano-Irving, Texas, +1.56 percent
San Antonio Texas, +2.12 percent
Salt Lake City, Utah, +2.27 percent
Houston-Sugar Land-Baytown, Texas, +3.55 percent
Austin-Round Rock, Texas, +4.02 percent

Questions to Consider for Buyer's Agents

Meagan Groghan (Realty One Group) — Tue, 12 Aug 2008 18:04:11 -0500

Daily Real Estate News | August 12, 20087 Because qualified buyers are at such premium in today's market, the Long Island Board of REALTORS® has scheduled 14 three-day courses this year for practitioners who want to be certified buyer representatives - up from nine courses two years ago.

Real estate professionals considering taking the buyer's agent path aren't required to have special training, but certification can improve the chance of success.

Here are some ground rules to iron out before signing on as a buyer's agent:

What is the buyer-agent's commission? Will it be negotiated with the seller's agent and wrapped up in the price of the house?

How will any disagreements over commission and other contract terms be settled?

What research will the buyer's agent do on each house?

How long will the buyer's agent contract last?

Is there a nonrefundable retainer fee to the agent or broker for signing the contract?

If a deal is struck on a house that the buyers find on their own, is the buyer's agent owed anything?

After the contract expires, what is the agent owed if there's a closing or deal on a house first shown by the buyer's agent during the contract period? How long after the contract expires will the buyer be responsible for paying agent's commission if such a deal is reached?

Home Builders' Stocks Surge

Meagan Groghan (Realty One Group) — Tue, 12 Aug 2008 18:02:33 -0500

Daily Real Estate News | August 12, 2008

Monday was the best day for homebuilders' stocks in a long time.

Several builders' stocks were up by at least 5 percent, with Beazer Homes USA Inc. rising 23.7 percent.

Shares of Hovnanian Enterprises Inc. rose about 8.6 percent. Lennar Corp. rose about 7.2 percent and KB Home's shares rose 8.5 percent.

Centex Corp. was up 6.2 percent, Toll Brother rose 5.9 percent, D.R. Horton Inc. climbed 5.6 percent, and Pulte Homes increased 5.6 percent.

Source: The Associated Press (08/11/08)

Gas Prices Force Buyers to Rethink 'Burbs

Meagan Groghan (Realty One Group) — Fri, 08 Aug 2008 10:54:39 -0500

Daily Real Estate News | August 8, 2008

High gas prices are affecting American workers' attitudes toward commuting and are prodding many to trade in their large homes in the exurbs for smaller, more urban properties.

Buying a 6,000-square-foot home with a large yard and a sport-utility vehicle to boot made sense when gas and property prices were low, economists say, but gasoline is now cost-prohibitive for many.

If the federal government lifts the heavy gas subsidies that encourage suburban growth, many Europeans pay $8 a gallon for gas, suburban residents will abandon their properties en masse and move in closer to urban transit stations.

"What were pluses of that lifestyle are now liabilities: a big SUV, a big home to heat, the energy needed to mow the lawn," says CEO Tom Darden of the Raleigh-based real estate conversion group Cherokee Investment Partners.

The firm takes properties close to transit centers in urban areas and develops them into housing.

Properties in the Washington, D.C.-metro area, Montreal, and Denver are thriving, says Darden, while property values in far-removed exurbs like Loudoun County, Va., and California's Central Valley are plummeting.

Source: The Washington Post, Eric M. Weiss (08/05/08)

Good Deals Lure Foreign Home Buyers

Meagan Groghan (Realty One Group) — Thu, 07 Aug 2008 14:32:43 -0500

Real Estate News | August 7, 2008 International real estate purchases in the U.S. continue to be a significant share of business for many real estate professionals, according to the 2008 National Association of Realtors® Profile of International Home Buying Activity.

This new research indicates that international buying activity in the U.S. is widespread. NAR estimates that between 150,000 and 190,000 homes were sold to foreign nationals from May 2007 to May 2008. Recent foreign buyers purchased properties in every state and the District of Columbia. The most popular states where international buyers purchased homes are Florida, California and Texas. Arizona, New York, Washington and Nevada were also popular.

The typical international buyer purchased a single-family vacation home costing $297,400. Four in 10 paid for their U.S. property with cash, compared with 7 percent for all domestic buyers. The typical international owner stayed at his or her U.S. property for 2.6 months during the year, according to the NAR findings.

Foreign exchange rates have helped make U.S. homes more affordable for international buyers. The euro, for example, has strengthened 24 percent versus the U.S. dollar over the past two years. Home prices are also now more affordable in places such as Florida and Arizona, contributing to those states' popularity among foreign buyers.

"Many international buyers recognize that real estate is an excellent investment and are drawn today by abundant inventory, low interest rates and a softer dollar. These conditions allow them to own their own a piece of the American dream," Gaylord said.

International buyers are distinct from domestic buyers. International buyers tend to purchase more expensive properties, which cost an average of 36 percent more than the typical domestic buyer's home purchase. In fact, more than 14 percent of properties sold to international buyers sold in excess of $750,000. Foreign buyers also show a greater preference for condos and townhouses compared to domestic buyers.

People from North America, Europe and Asia accounted for more than 85 percent of recent foreign home buying transactions. The top six countries of origin for foreign home buyers, in rank order, were Canada, the United Kingdom, Mexico, China, India and Germany. This year, Canada replaced Mexico as the country with the largest share of foreign buyers in the U.S. The percentage of Canadian buyers doubled from last year, from 11 percent to 23.5 percent.

"This survey confirms a pattern that we have observed for some years in Florida and other markets that are attracting buyers from overseas," said Tony Macaluso, 2008 chair of NAR's international business group. "This latest research enhances our understanding of this audience and provides insight for the increasing number of REALTORS® with international clients."

Of the REALTORS® surveyed, 26 percent served international clients in the past year and about half of those clients ended up purchasing a home. The primary reasons some clients did not eventually buy a house were home price concerns, immigration laws, and property taxes. "If visa regulations that favor longer stays for overseas buyers such as retirees from abroad were in place, these sales levels would be even higher," Macaluso said.

REALTORS® who have sold homes to international clients reported that their transactions with these clients accounted for about 16 percent of their entire business. For about 8 percent of Realtors® who work with foreign buyers, more than half of their transactions were international sales.

The 2008 NAR Profile of International Home Buying Activity is based on responses from approximately 4,000 REALTORS®who serve foreign buyers. It describes international home buying activity in the U.S. over the 12-month period from May 2007 to May 2008 and updates information from the 2007 survey. The full report is available at REALTOR.org.

Source: NAR

Big Gain in Pending Home Sales Index

Meagan Groghan (Realty One Group) — Thu, 07 Aug 2008 13:56:07 -0500

Daily Real Estate News | August 7, 2008

Some improvement is projected for existing-home sales in the months ahead, with broader gains seen by the fourth quarter as buyers take advantage of new provisions provided through the recently passed housing stimulus bill, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index,a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4.

Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range. "The vacillation of data from one month to the next indicates a housing market in transition," he said. "The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009."

The PHSI in the South jumped 9.3 percent to 92.4 in June but is 16.6 percent below June 2007. In the West, the index rose 4.6 percent to 101.0 in June but remains 1.7 percent below a year ago. The index in the Northeast increased 3.4 percent to 79.6 but is 15.4 percent below June 2007. In the Midwest, the index rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago.

Sales gains have been consistently strong in recent months in Sacramento, Calif.; Las Vegas; and Ft. Myers, Fla., where affordability conditions have greatly improved. The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains, including Columbus, Ohio; Charleston, W.V.; Oklahoma City; and Colorado Springs, Colo. Pending sales have fallen significantly in Texas markets and in the Pacific Northwest - two regions with very strong local economies.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the housing stimulus package will provide long-term relief. "Provisions to stem foreclosures are helpful, but a greater lift to the economy should come from higher mortgage limits, enhancements to the FHA loan program and the first-time home buyer tax credit," he said.
"These are excellent tools that will help buyers get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future," Gaylord said.

With roughly 2.5 million first-time home buyers taking advantage of the temporary tax credit, existing-home sales are likely to rise 7.0 percent to 5.51 million in 2009 from a expected total of 5.15 million this year.

Yun said home prices did not fall as much as anticipated in the second quarter. "Buyers entering the hardest-hit markets, in some cases with multiple-bid offers, may have put a floor on prices," he said. "In addition, rising commodity prices and higher construction costs have resulted in a very unusual market today with existing-home prices being less than replacement building costs in some areas. Home prices are projected to increase 3 to 6 percent in 2009."
"Builders need to further cut production to help trim inventory. However, new-home sales are expected to bottom around the second quarter of next year with slight gains in the second half of 2009," Yun said. New-home sales are forecast to drop 8.8 percent to 464,000 in 2009 from 509,000 this year. Housing starts, including multifamily units, should fall 8.8 percent next year to 795,000 from 960,000 in 2008.

The 30-year fixed-rate mortgage, which also has been vacillating, is likely to trend up to 6.5 percent by the end of 2008, and then hold at that level for most of next year. NAR's housing affordability index is forecast to remain favorable this year, averaging 13 percentage points higher than in 2007.

Growth in the U.S. gross domestic product (GDP) is expected to be 1.7 percent this year and 1.5 percent in 2009. The unemployment rate is projected to average 5.5 percent in 2008 and 6.0 percent next year.

Inflation, as measured by the Consumer Price Index, is seen at 4.1 percent in 2008 and 2.6 percent next year. Inflation-adjusted disposable personal income is estimated to grow 1.7 percent this year and 1.1 percent in 2009.

After Hitting a Low, Mortgage Applications Climb

Meagan Groghan (Realty One Group) — Thu, 07 Aug 2008 12:21:47 -0500

Daily Real Estate News | August 6, 2008

Mortgage applications rose slightly on an adjusted basis last week, up 2.8 percent to 432.6 from 420.8 the previous week, according to the Mortgage Bankers Association weekly survey.

Total mortgage applications had slumped a week ago to their lowest level since December 2000.

On an unadjusted basis, the index increased 2.4 percent compared with the previous week and was down 33.7 percent compared with the same week a year ago.

Refinances increased 4.4 percent, while purchases rose 1.8 percent.

Mortgage rates were down slightly:

30-year fixed-rate mortgages decreased to 6.41 percent from 6.46 percent;
15-year fixed-rate mortgages increased to 6.02 percent from 5.98 percent;
1-year ARMs decreased to 7.17 percent from 7.25 percent.

Fed Leaves Key Interest Rate Alone

Meagan Groghan (Realty One Group) — Thu, 07 Aug 2008 12:04:43 -0500

Daily Real Estate News | August 6, 2008

The Federal Reserve yesterday left the key interest rate unchanged at 2 percent, while stressing in their post-meeting statement that they're concerned about both the struggling economy and high inflation.

"Although downside risks to growth remain, the upside risks to inflation are also of significant concern," the Fed said.

Observers say that the Fed is unlikely to change the key rate this year. "They really went right down the middle," says U.S. Global Investors research director John Derrick. "They are basically in risk-assessment mode."

Source: The Wall Street Journal, (08/05/2008)

What's Fair Got to do With it?

Meagan Groghan (Realty One Group) — Thu, 07 Aug 2008 12:03:32 -0500

Daily Real Estate News | August 6, 2008

Is it fair that prudent taxpayers and home owners should bail out people who borrowed foolishly and companies whose executives were responsible for the credit crunch?

The answer is "no," but that doesn't make the bailout a mistake, says Zvi Bodie, finance professor at Boston University. "My own view is that the world isn't fair," says Bodie. "But would it be fair to put the economy into a deep recession or depression? I don't think so."

If the monetary and fiscal authorities are right in their judgment that the risk of an economic plunge of frightening proportions is real, then the actions they're taking are fair to all of us, Bodie contends.

The U.S. economy in 2008 - with a 5.7 percent unemployment rate and economy expanding at a 1.9 percent average annual rate - is far from Depression-era statistics and only time will tell whether monetary and fiscal authorities exercised sound judgment or panicked. In the meantime, history rewards the bold - not the timid - when the financial system is threatened with collapse, according to Bodie.

Most Consumers Pleased With Real Estate Agent

Meagan Groghan (Realty One Group) — Tue, 05 Aug 2008 17:56:02 -0500

Daily Real Estate News | August 5, 2008

A survey published in the September issue of Consumer Reports shows that most consumers are pleased with the services of their real estate practitioner.

The survey of 9,141 readers who bought or sold a home (or tried to) found that 71 percent were very or completely satisfied with their practitioner, while only 12 percent said they were dissatisfied.

Practitioners with most of the larger real-estate chains and independent brokers earned reader scores of 79 or higher, which indicated that respondents found these professionals provide "very satisfying" service.

Eighty-six percent of those surveyed who put their homes on the market made a sale; only 8 percent of would-be sellers eventually gave up and took their homes off the market. (The rest were still trying to sell when the survey was completed.)

What Sellers Said

Eighty-two percent of respondents who sold with the help of a practitioner received $5,000 less, on average, than their original asking price.

Almost all of the 17 percent who sold their homes without professional help said they received about what they originally asked.

What Buyers Said

Sixty-six percent of Consumer Reports' readers who used a practitioner to help them buy a home paid an average of $5,000 less than the listing price, and the 34 percent of buyers who negotiated their own deals, without representation, paid close to the asking price.

Lower Commission = Happier Seller

The survey also found that many real estate professionals would negotiate commission rates if sellers haggle. Sellers who paid commission rates 3 percent or lower were just as satisfied with their brokers' performance as those who paid 6 percent or more, the survey reported.

Forty-six percent of sellers surveyed attempted to negotiate a lower commission rate. About 71 percent succeeded.

Source: Consumer Reports (08/04/2008

Pulte to Match $7,500 Credit for Home Buyers

Meagan Groghan (Realty One Group) — Tue, 05 Aug 2008 17:53:53 -0500

Daily Real Estate News | August 5, 2008

Pulte Homes plans to match the $7,500 tax credit that the federal government is offering to first-time home buyers as part of its housing stimulus package.

However, the Bloomfield Hills, Mich.-based residential builder plans to make the incentive available to all buyers and expects other builders to introduce similar offers.

In addition to the tax credit, which amounts to an interest-free loan payable over 15 years, the package expands the FHA foreclosure rescue program.

"The lender is going to use the program when it makes sense for the lender," says Mortgage Bankers Association spokesman John Mechem, so borrowers who qualify should contact their lender.

Source: Detroit Free Press, Greta Guest (08/05/08)