In the article below, from the National Association Of Realtors, you will see that the direction for existing homes sales are headed up for the second month in a row. We are still not out of the woods but the news is looking better. Take a look and give us a call if you have any questions.
_______________________________________________________
May Existing-Home Sales Continue Rising Trend
Washington, June 23, 2009
Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the National Association of Realtors®. May’s increase was the first back-to-back monthly gain since September 2005.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate1 of 4.77 million units in May from a downwardly revised level of 4.66 million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008.
Lawrence Yun, NAR chief economist, expected an improvement. “Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” he said. “First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 4.86 percent in May from a record low 4.81 percent in April; the rate was 6.04 percent in May 2008. Last week, Freddie Mac reported the 30-year fixed at 5.38 percent; data collection began in 1971.
Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply2 at the current sales pace, down from a 10.1-month supply in April.
Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”
An NAR practitioner survey in May showed first-time buyers accounted for 29 percent of transactions, and that the number of buyers looking at homes is nearly 10 percentage points higher than a year ago. “This is the time of year when we see large increases in the number of repeat buyers, who are benefitting from sales to entry-level buyers,” Yun said. “Investors appear less active, but are more prevalent in areas with large price corrections.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said appraisals and the tax credit are key issues. “To maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist,” he said. “In addition, the first-time buyer tax credit should be expanded to all buyers of primary homes regardless of income. Extending the credit into 2010 would allow more time for the market to catch up with underlying demand, in part because many families with children, who normally time their purchase based on school year considerations, do not have enough time to move before the start of school in late August.
“Freeing a pent-up demand in housing will absorb inventory at a faster pace, strengthen communities and stabilize home prices earlier,” McMillan said.
The national median existing-home price3 for all housing types was $173,000 in May, down 16.8 percent from a year earlier. Distressed properties, which declined to 33 percent of all sales in May from 45 percent in April, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
“The decline in the distressed sales share likely results from an increase of repeat buyers in May,” Yun said. “First-time buyers are concentrated in the lower price ranges, which include most of the distressed sales.”
Single-family home sales rose 1.9 percent to a seasonally adjusted annual rate of 4.25 million in May from a pace of 4.17 million in April, but are 3.0 percent below the 4.38 million-unit level in May 2008. The median existing single-family home price was $172,900 in May, down 16.1 percent from a year ago.
Existing condominium and co-op sales increased 6.1 percent to a seasonally adjusted annual rate of 520,000 units in May from 490,000 in April, but are 8.9 percent below the 571,000-unit level in May 2008. The median existing condo price4 was $173,800 in May, down 21.9 percent from a year earlier.
Regionally, existing-home sales in the Northeast rose 3.9 percent to an annual level of 800,000 in May, but are 10.1 percent below a year ago. The median price in the Northeast was $243,600, which is 12.5 percent below May 2008.
Existing-home sales in the Midwest jumped 9.0 percent in May to a pace of 1.09 million but are 4.4 percent below May 2008. The median price in the Midwest was $145,800, which is 10.4 percent lower than a year ago.
In the South, existing-home sales were unchanged at an annual pace of 1.74 million in May but are 8.9 percent below a year ago. The median price in the South was $157,400, down 9.9 percent from May 2008.
Existing-home sales in the West slipped 0.9 percent to an annual rate of 1.14 million in May, but are 11.8 percent higher than May 2008. The median price in the West was $197,700, down 30.6 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: Any references to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.
3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for June will be released July 23. The next Pending Home Sales Index & Forecast is scheduled for July 1; release times are 10 a.m. EDT.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
© Copyright NATIONAL ASSOCIATION of REALTORS® Headquarters: 430 North Michigan Avenue, Chicago, IL 60611
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020 I 1-800-874-6500
Wednesday, June 24, 2009
Monday, June 22, 2009
How To Do a Short Sale
This is a great article by Elizabeth Weintrub. She points out the ins and outs of a short sale. There is a lot of great information in this article. Check it out.
If you have a need to consider a short sale give me a call and we will walk you through it.
Ed & Sheila
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How To Do a Short Sale
Why Would a Lender Accept a Short Sale?
By Elizabeth Weintraub, About.com
A short sale in real estate is not always a pleasant transaction.
There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."
More than half of my sales in Sacramento over the past few years are short sales. That's how prominent short sales have become.
When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers:
Obtain legal advice from a competent real estate lawyer
Call an accountant to discuss short sale tax ramifications
As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
Call the LenderYou may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
Submit Letter of AuthorizationLenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
Property Address
Loan Reference Number
Your Name
The Date
Your Agent's Name & Contact Information
Preliminary Net SheetThis is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
Hardship LetterThe sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
Proof of Income and AssetsIt is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
Copies of Bank StatementsIf your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
Comparative Market AnalysisSometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
Active on the market
Pending sales
Solds from the past six months.
Purchase Agreement & Listing Agreement When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.
Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.
If you have a need to consider a short sale give me a call and we will walk you through it.
Ed & Sheila
__________________________________________
How To Do a Short Sale
Why Would a Lender Accept a Short Sale?
By Elizabeth Weintraub, About.com
A short sale in real estate is not always a pleasant transaction.
There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."
More than half of my sales in Sacramento over the past few years are short sales. That's how prominent short sales have become.
When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers:
Obtain legal advice from a competent real estate lawyer
Call an accountant to discuss short sale tax ramifications
As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
Call the LenderYou may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
Submit Letter of AuthorizationLenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
Property Address
Loan Reference Number
Your Name
The Date
Your Agent's Name & Contact Information
Preliminary Net SheetThis is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
Hardship LetterThe sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
Proof of Income and AssetsIt is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
Copies of Bank StatementsIf your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
Comparative Market AnalysisSometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
Active on the market
Pending sales
Solds from the past six months.
Purchase Agreement & Listing Agreement When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.
Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.
Tuesday, June 16, 2009
Wilmington MLS Results for May 2009
The May MLS report is below. As usual there are some ups and some downs. I continue to be optimistic and believe that things are headed in the right direction.
Everything in this report points to the fact that now is a great time to buy.
Be sure and call if you know anyone selling or buying real estate.
We will make sure they will get the most outstanding real estate experience ever.
This report was compiled by
David Flory of Cunningham & Company Mortgage Bankers
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May 2009 MLS Report
David’s Comments
“Don’t stop believin’ Hold on to that feelin’” with the market trying to stall out Journey seems to have the right idea – Don’t stop believin’- the buyers will buy homes, the recession will end, banks will lend more money, the economy will become strong and housing will lead the way. You have to have that positive feeling, let’s keep this market moving forward. Mortgage rates had their 1% bump up the last 2 weeks and this slowed down the refinance people. The purchase business is still doing well and hopefully this will help move clients off the fence. The last three days we have seen rates recover some of the ground they gave up.
We actually saw a small increase in our listing inventory for the month of May, less than a 1% increase with 5,489 homes on the market. We had a 33 unit increase in sold units from May over April; this continues to put us in a strong buyer’s market with a listing inventory of over a 15.1 month supply. We have a few plus factors – Our listing inventory has remained in the 5,400 to 5,500 unit range for the last six months, and the average list price is up by $4,337.00 over last month. Our average list price is $415,502. Our pending index for May ranged from 837 units to 914 units. Last year about this time we had about 980 to 1025 pending units. We are also seeing our lowest level of seller concessions at 21.5% of May sold homes. Then I look at the factors that are slowing us down. Our average days on the market has decreased to 132 from the 140’s which is typical for a buyer’s market, it decreased about 10 days from last month. The list to sold ratio is 93.7% an decrease of .05% from last month, we want this number to be going up. The number of homes that sold in 15 days or less continues to remain very low 14.1% of May sold homes. On a rolling 12 month our sold units are down by 27.3%. Our average list price has ranged from $405,922 (March) to $424,201 (October) for the last 11 months. Our average list price has continued to climb since December 08’.
Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment and they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character. A loan in the crowd.
Listing Inventory
The last five months our listing inventory is pretty much flat line for the Spring. Our current listing inventory has a 6 unit increase from last month and we are about 449 units down from June 2008. We have 5,489 single family homes for sale in our MLS. The average list price of $415,502 is up by $4,337.00 from May 2009. The average list price has increased over the last 4 months by 2.4%.
Monthly Average Sold Price
Our monthly average sold price is up 20% from last month and down 8.2% from May 2008. This is our highest average sold price since Aug 2008. You can also see that the average sold price has crossed over the sold line for May 2005. May average sold price ($259,487) shows a increase of just 1.2% from year end 2008. Our current year-end (01/01/08 – 12/31/08) average sold price is $256,498.
Monthly Sold Units
The number of sold homes is up 10.0% from last month. May saw an increase of 33 sold homes over April 2009. This is our highest total of monthly sold homes since September 2008. In our rolling 12 months – June 2008 to May 2009 our average sold price is down by 10.8% over this same timetable a year ago. Our monthly sold units continue to lag behind the last couple of years by as much as 27%.
Average Sold Price Year to Date
Year over year our year to date numbers have dipped a little.
2003 year end average sale price $ 186,137
2004 year end average sale price $ 210,048
2005 year end average sale price $ 254,080
2006 year end average sale price $ 264,498
2007 year end average sale price $ 273,408
2008 year end average sale price $256,498
May 2009 – year to date average sold price of $232,181 is 10.8% behind of year end 2008. This is one of the lowest average sold prices we have had to start a new year with – see chart below.
Median Sold Price
Our Median sold price is up 7.1% from last month. In our current rolling 12 month (June 08 to May 09) the median is $195,955. While we have not dipped as low as the National Median we continue to follow the same path, we are just slightly ahead of the National Median and both of us have had little upticks in the last month.
Market Absorption rate – The number of homes sold in May, 362 divided by the current listing inventory, 5,489 gives us a 15.1 month supply of single family homes (we took 2.6 months off the supply from last month). The increase in sales units for May affects this calculation. With a 15.1 month supply, our market absorption rate is getting better. With rates where they are and plenty of inventory and a good summer market we can get this number down.
List to Sold price ratio – the average list price of the sold properties is $277,072 and the average sold price is $259,487 for May which gives us a 93.7% list to sold price ratio (a move down of .5% - not good). This is our eighth month under 95%.
Seller Concessions – We had 21.5% of sold properties report a sales concession for May. I hope with this number so low we are seeing the bottom of seller paid concessions. We want this number to go lower. The average concession for the month was $4,370.00
Days on Market – The average days on market for the sold properties has now dropped into the 130’s for May that is 132 days – that is almost 5 months to keep a property on the market. Only 14.1% of the properties were placed under contract in less than 15 days for the month of May.
Carolina & Kure Beach
There are currently 576 single family homes for sale and this represents a 28 unit decrease over May and 10.5% of our total WRAR inventory. The average list price is $465,877 a slight decrease over May 09’. In May there were 29 homes sold, divide that by the homes available and you have a large monthly supply of homes in Carolina and Kure Beach (over 19.8 months). This is 5.2 months lower than last month – good job. The average sold price for the month of May was $339,081 and is up from last month. In May 2008 we had 31 home sales at an average $409,473. When we look at our rolling 12 months we see that we are ahead in units by 7 and our average sold price has dipped from $408,171 (2007 – 2008) to a current $340,462 a decrease of 16.6%.
This data was pulled on June 15, 2009, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through May 31, 2009.
David Flory
Mortgage Consultant
Cunningham & Company Mortgage Bankers
910-352-8273 cell
910-313-0045 office
May 2009 MLS Report
David’s Comments
“Don’t stop believin’ Hold on to that feelin’” with the market trying to stall out Journey seems to have the right idea – Don’t stop believin’- the buyers will buy homes, the recession will end, banks will lend more money, the economy will become strong and housing will lead the way. You have to have that positive feeling, let’s keep this market moving forward. Mortgage rates had their 1% bump up the last 2 weeks and this slowed down the refinance people. The purchase business is still doing well and hopefully this will help move clients off the fence. The last three days we have seen rates recover some of the ground they gave up.
We actually saw a small increase in our listing inventory for the month of May, less than a 1% increase with 5,489 homes on the market. We had a 33 unit increase in sold units from May over April; this continues to put us in a strong buyer’s market with a listing inventory of over a 15.1 month supply. We have a few plus factors – Our listing inventory has remained in the 5,400 to 5,500 unit range for the last six months, and the average list price is up by $4,337.00 over last month. Our average list price is $415,502. Our pending index for May ranged from 837 units to 914 units. Last year about this time we had about 980 to 1025 pending units. We are also seeing our lowest level of seller concessions at 21.5% of May sold homes. Then I look at the factors that are slowing us down. Our average days on the market has decreased to 132 from the 140’s which is typical for a buyer’s market, it decreased about 10 days from last month. The list to sold ratio is 93.7% an decrease of .05% from last month, we want this number to be going up. The number of homes that sold in 15 days or less continues to remain very low 14.1% of May sold homes. On a rolling 12 month our sold units are down by 27.3%. Our average list price has ranged from $405,922 (March) to $424,201 (October) for the last 11 months. Our average list price has continued to climb since December 08’.
Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment and they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character. A loan in the crowd.
Listing Inventory
The last five months our listing inventory is pretty much flat line for the Spring. Our current listing inventory has a 6 unit increase from last month and we are about 449 units down from June 2008. We have 5,489 single family homes for sale in our MLS. The average list price of $415,502 is up by $4,337.00 from May 2009. The average list price has increased over the last 4 months by 2.4%.
Monthly Average Sold Price
Our monthly average sold price is up 20% from last month and down 8.2% from May 2008. This is our highest average sold price since Aug 2008. You can also see that the average sold price has crossed over the sold line for May 2005. May average sold price ($259,487) shows a increase of just 1.2% from year end 2008. Our current year-end (01/01/08 – 12/31/08) average sold price is $256,498.
Monthly Sold Units
The number of sold homes is up 10.0% from last month. May saw an increase of 33 sold homes over April 2009. This is our highest total of monthly sold homes since September 2008. In our rolling 12 months – June 2008 to May 2009 our average sold price is down by 10.8% over this same timetable a year ago. Our monthly sold units continue to lag behind the last couple of years by as much as 27%.
Average Sold Price Year to Date
Year over year our year to date numbers have dipped a little.
2003 year end average sale price $ 186,137
2004 year end average sale price $ 210,048
2005 year end average sale price $ 254,080
2006 year end average sale price $ 264,498
2007 year end average sale price $ 273,408
2008 year end average sale price $256,498
May 2009 – year to date average sold price of $232,181 is 10.8% behind of year end 2008. This is one of the lowest average sold prices we have had to start a new year with – see chart below.
Median Sold Price
Our Median sold price is up 7.1% from last month. In our current rolling 12 month (June 08 to May 09) the median is $195,955. While we have not dipped as low as the National Median we continue to follow the same path, we are just slightly ahead of the National Median and both of us have had little upticks in the last month.
Market Absorption rate – The number of homes sold in May, 362 divided by the current listing inventory, 5,489 gives us a 15.1 month supply of single family homes (we took 2.6 months off the supply from last month). The increase in sales units for May affects this calculation. With a 15.1 month supply, our market absorption rate is getting better. With rates where they are and plenty of inventory and a good summer market we can get this number down.
List to Sold price ratio – the average list price of the sold properties is $277,072 and the average sold price is $259,487 for May which gives us a 93.7% list to sold price ratio (a move down of .5% - not good). This is our eighth month under 95%.
Seller Concessions – We had 21.5% of sold properties report a sales concession for May. I hope with this number so low we are seeing the bottom of seller paid concessions. We want this number to go lower. The average concession for the month was $4,370.00
Days on Market – The average days on market for the sold properties has now dropped into the 130’s for May that is 132 days – that is almost 5 months to keep a property on the market. Only 14.1% of the properties were placed under contract in less than 15 days for the month of May.
Carolina & Kure Beach
There are currently 576 single family homes for sale and this represents a 28 unit decrease over May and 10.5% of our total WRAR inventory. The average list price is $465,877 a slight decrease over May 09’. In May there were 29 homes sold, divide that by the homes available and you have a large monthly supply of homes in Carolina and Kure Beach (over 19.8 months). This is 5.2 months lower than last month – good job. The average sold price for the month of May was $339,081 and is up from last month. In May 2008 we had 31 home sales at an average $409,473. When we look at our rolling 12 months we see that we are ahead in units by 7 and our average sold price has dipped from $408,171 (2007 – 2008) to a current $340,462 a decrease of 16.6%.
This data was pulled on June 15, 2009, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through May 31, 2009.
David Flory
Mortgage Consultant
Cunningham & Company Mortgage Bankers
910-352-8273 cell
910-313-0045 office
Thursday, June 11, 2009
The Two Latest Signs Housing Is Recovering
The short article below is written by John Spence and James Hagerty it was in the Wall Street Journal. They point out that there are signs of recovery. However one thing they are not talking about is interest rates. It seems that the bond markets have noticed the alarming spending binge our government has been on and due to that we are seeing interest rates move upward. Where and when will they stop? Who knows. If you are thinking of buying be sure to apply and lock in your rates! Give us a call we can help you make the right decision.
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The Two Latest Signs Housing Is Recovering Here’s more evidence that the housing market is recovering.Two major home builders, Toll Brothers Inc. and Hovnanian Enterprises Inc., say their losses were shrinking compared to last year because buyers are coming back to the market.Other encouraging news came from IHS Global Insight, a research firm, which said home prices fell on average at an annual rate of 2.2 percent in the first quarter in 199 of 330 metropolitan areas. That compares with a 12.5 percent decline in the fourth quarter of 2008 in 312 metropolitan areas."While it's too early to see a bottom of this housing downturn," the report said, the latest data "may signal that the market is beginning to stabilize."Source: The Wall Street Journal, James R. Hagerty and John Spence (06/04/2009)
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The Two Latest Signs Housing Is Recovering Here’s more evidence that the housing market is recovering.Two major home builders, Toll Brothers Inc. and Hovnanian Enterprises Inc., say their losses were shrinking compared to last year because buyers are coming back to the market.Other encouraging news came from IHS Global Insight, a research firm, which said home prices fell on average at an annual rate of 2.2 percent in the first quarter in 199 of 330 metropolitan areas. That compares with a 12.5 percent decline in the fourth quarter of 2008 in 312 metropolitan areas."While it's too early to see a bottom of this housing downturn," the report said, the latest data "may signal that the market is beginning to stabilize."Source: The Wall Street Journal, James R. Hagerty and John Spence (06/04/2009)
Tuesday, June 9, 2009
How to Use the Tax Credit for Down payments for First Time Home Buyers
The following article was written by Robert Freeman. He points out some ways to use your Tax Credit in order to use it for a down payment. But in reality it would be best to talk this over with your lender as well as your accountant. Give us a call we will help you find the right lender and the right property.
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How to Use the Tax Credit for Downpayments
Potential first-time buyers have yet another reason to consider purchasing a home: the monetization of the tax credit. Here are four ways your clients can get access to those funds for upfront costs.
By Robert Freedman
Short-term bridge loans are now available from a variety of lenders so that buyers can tap the benefits of the $8,000 Federal Housing Tax Credit for First-Time Home Buyers upfront. If your clients are eligible for the tax credit, these bridge loans will enable them to use the money for their down payment and closing costs with the credit as collateral. Consumers will have to pay the money back after they’ve filed their tax return and received a refund.
There are essentially four sources for this type of financing, and their terms can vary considerably.
1. State HFA Bridge Loans
As of early June 2009, 10 state Housing Finance Agencies offered tax-credit bridge loans, and more were planning to do so. The easiest way to learn whether one is offered in your state is to get your HFA’s phone number through a Housing Finance Agency list maintained by the National Council of State Housing Agencies (NCSHA). NCSHA also maintains a list of HFAs that already offer the bridge loans. The HFAs with loan programs already in place are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee.
If your state HFA offers the loans, you should be able to get more information about them on the agency’s Web site. Look for “tax credit advance loan” or some variant of that, or else look for information on the HFA’s regular mortgage program, which should include info on the tax-credit advance loan somewhere. Although each state HFA loan differs, here are some typical characteristics:
· You’ll need to make a minimum downpayment from your own funds, probably around $1,000.
· You’ll have to go through local lenders approved by the HFA to actually originate the loan, since HFAs are not originators.
· In some cases, the loans are interest-free; check with the state HFA to find out.
· The HFAs have set aside a limited amount of funds for the loans, so they tend to be made on a first-come, first-served basis.
· You’ll be expected to use HFA-backed financing for the mortgage on your home purchase. This financing typically comes with a below-market interest rate and usually requires borrowers to meet eligibility criteria. These criteria will vary greatly, but they often require borrowers to be first-timer buyers and meet income-eligibility requirements. For the bridge loans, there’s a good chance the criteria will be similar to what’s required for the tax credit.
Since the bridge loans are made in tandem with your HFA’s financing products, you apply for the loans when you apply with the HFA-approved lender for your mortgage financing. You should be able to find a list of approved lenders on the HFA’s Web site.
2. Local Government or Nonprofit LoansIf your state HFA doesn’t offer the loans, you can ask an HFA staff person to direct you to local nonprofits or state or local government agencies that do. If that person can’t help you, a good place to start a search is with a national nonprofit group called NeighborWorks, which maintains a list of more than 200 local affiliates that provide housing assistance. The loan programs for each of these affiliates differ, so you or your client will need to check with them on their underwriting standards and loan terms—and even on whether they make bridge loans repayable with the tax credit.
3. Local HFAsAnother source, if your state HFA can’t help you, might be the National Association of Local Housing Finance Agencies. Local HFAs are much like state HFAs but with jurisdictions limited to their locality. To learn whether there’s a local HFA in your area, call NALHFA at 202/367-1197.
4. FHA-approved LendersIf you’re unable to identify a state or local HFA or other governmental agency or nonprofit to assist you, you can tap bridge-loan assistance if you work with a lender approved by the U.S. Department of Housing and Urban Development to originate FHA-backed loans. HUD maintains a database of FHA lenders on its Web site that’s searchable by a number of criteria including city, state, county, and service area.
In a difference with the assistance provided by state and local agencies or nonprofits, the bridge loans provided by private, for-profit FHA-approved lenders must be structured in the form of a personal loan or line of credit collateralized by the tax credit. The bridge loan can’t be structured as a second mortgage.
Also, although FHA allows you to use the bridge loan to cover your closing costs or to buy down your interest rate, you can use it for the down payment only after you’ve covered the 3.5 percent minimum that’s required on any FHA loan. Thus, you’ll have to come up with the 3.5 percent minimum down payment yourself or else tap another source of assistance for it. That can include gifts from family. Seller-funded down-payment programs are not permitted. HUD provides complete details in a May 29 Mortgagee Letter on “Using First-Time Homebuyer Tax Credits” (2009-15) that went to its approved lenders.
Since it’s the HUD-approved lender and not FHA itself that’s making the bridge loan, actual loan terms will vary. At a minimum, though, the bridge loan must meet certain restrictions, most of them imposed to weed out fraud or ensure borrowers aren’t getting in over their heads. These include:
· Loans can’t result in cash back to the borrower.
· The amount can’t exceed what’s needed for the downpayment, closing costs, and prepaid expenses.
· If there’s a monthly repayment, it must be included within the qualifying ratios and, when combined with the first mortgage, can’t exceed the borrower’s reasonable ability to pay.
· Payments must be deferred for at least 36 months to not be included in the qualifying ratios.
· There can be no balloon payment required before 10 years.
Start with the Deepest Assistance FirstSince state HFA bridge loans are typically allowed for as much of the downpayment as possible (up to the credit limit of $8,000), your client’s best bet is to start with the state HFA. If it doesn’t have a program in place, learn what you can from it about other state or local programs, including nonprofits. If these sources don’t pan out, your buyer can work with an FHA-approved lender. However, since HUD requires borrowers to put down a minimum of 3.5 percent, they can access bridge-loan assistance only for other upfront expenses such as closing costs, an interest-rate buy-down, or a portion of the downpayment above 3.5 percent.
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How to Use the Tax Credit for Downpayments
Potential first-time buyers have yet another reason to consider purchasing a home: the monetization of the tax credit. Here are four ways your clients can get access to those funds for upfront costs.
By Robert Freedman
Short-term bridge loans are now available from a variety of lenders so that buyers can tap the benefits of the $8,000 Federal Housing Tax Credit for First-Time Home Buyers upfront. If your clients are eligible for the tax credit, these bridge loans will enable them to use the money for their down payment and closing costs with the credit as collateral. Consumers will have to pay the money back after they’ve filed their tax return and received a refund.
There are essentially four sources for this type of financing, and their terms can vary considerably.
1. State HFA Bridge Loans
As of early June 2009, 10 state Housing Finance Agencies offered tax-credit bridge loans, and more were planning to do so. The easiest way to learn whether one is offered in your state is to get your HFA’s phone number through a Housing Finance Agency list maintained by the National Council of State Housing Agencies (NCSHA). NCSHA also maintains a list of HFAs that already offer the bridge loans. The HFAs with loan programs already in place are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee.
If your state HFA offers the loans, you should be able to get more information about them on the agency’s Web site. Look for “tax credit advance loan” or some variant of that, or else look for information on the HFA’s regular mortgage program, which should include info on the tax-credit advance loan somewhere. Although each state HFA loan differs, here are some typical characteristics:
· You’ll need to make a minimum downpayment from your own funds, probably around $1,000.
· You’ll have to go through local lenders approved by the HFA to actually originate the loan, since HFAs are not originators.
· In some cases, the loans are interest-free; check with the state HFA to find out.
· The HFAs have set aside a limited amount of funds for the loans, so they tend to be made on a first-come, first-served basis.
· You’ll be expected to use HFA-backed financing for the mortgage on your home purchase. This financing typically comes with a below-market interest rate and usually requires borrowers to meet eligibility criteria. These criteria will vary greatly, but they often require borrowers to be first-timer buyers and meet income-eligibility requirements. For the bridge loans, there’s a good chance the criteria will be similar to what’s required for the tax credit.
Since the bridge loans are made in tandem with your HFA’s financing products, you apply for the loans when you apply with the HFA-approved lender for your mortgage financing. You should be able to find a list of approved lenders on the HFA’s Web site.
2. Local Government or Nonprofit LoansIf your state HFA doesn’t offer the loans, you can ask an HFA staff person to direct you to local nonprofits or state or local government agencies that do. If that person can’t help you, a good place to start a search is with a national nonprofit group called NeighborWorks, which maintains a list of more than 200 local affiliates that provide housing assistance. The loan programs for each of these affiliates differ, so you or your client will need to check with them on their underwriting standards and loan terms—and even on whether they make bridge loans repayable with the tax credit.
3. Local HFAsAnother source, if your state HFA can’t help you, might be the National Association of Local Housing Finance Agencies. Local HFAs are much like state HFAs but with jurisdictions limited to their locality. To learn whether there’s a local HFA in your area, call NALHFA at 202/367-1197.
4. FHA-approved LendersIf you’re unable to identify a state or local HFA or other governmental agency or nonprofit to assist you, you can tap bridge-loan assistance if you work with a lender approved by the U.S. Department of Housing and Urban Development to originate FHA-backed loans. HUD maintains a database of FHA lenders on its Web site that’s searchable by a number of criteria including city, state, county, and service area.
In a difference with the assistance provided by state and local agencies or nonprofits, the bridge loans provided by private, for-profit FHA-approved lenders must be structured in the form of a personal loan or line of credit collateralized by the tax credit. The bridge loan can’t be structured as a second mortgage.
Also, although FHA allows you to use the bridge loan to cover your closing costs or to buy down your interest rate, you can use it for the down payment only after you’ve covered the 3.5 percent minimum that’s required on any FHA loan. Thus, you’ll have to come up with the 3.5 percent minimum down payment yourself or else tap another source of assistance for it. That can include gifts from family. Seller-funded down-payment programs are not permitted. HUD provides complete details in a May 29 Mortgagee Letter on “Using First-Time Homebuyer Tax Credits” (2009-15) that went to its approved lenders.
Since it’s the HUD-approved lender and not FHA itself that’s making the bridge loan, actual loan terms will vary. At a minimum, though, the bridge loan must meet certain restrictions, most of them imposed to weed out fraud or ensure borrowers aren’t getting in over their heads. These include:
· Loans can’t result in cash back to the borrower.
· The amount can’t exceed what’s needed for the downpayment, closing costs, and prepaid expenses.
· If there’s a monthly repayment, it must be included within the qualifying ratios and, when combined with the first mortgage, can’t exceed the borrower’s reasonable ability to pay.
· Payments must be deferred for at least 36 months to not be included in the qualifying ratios.
· There can be no balloon payment required before 10 years.
Start with the Deepest Assistance FirstSince state HFA bridge loans are typically allowed for as much of the downpayment as possible (up to the credit limit of $8,000), your client’s best bet is to start with the state HFA. If it doesn’t have a program in place, learn what you can from it about other state or local programs, including nonprofits. If these sources don’t pan out, your buyer can work with an FHA-approved lender. However, since HUD requires borrowers to put down a minimum of 3.5 percent, they can access bridge-loan assistance only for other upfront expenses such as closing costs, an interest-rate buy-down, or a portion of the downpayment above 3.5 percent.
Sunday, June 7, 2009
Ideas to help take Advantage in the Forclosure Market
Foreclosures continue to be in the forefront of most discussions when talking about Real Estate investments. As the number of foreclosures seem to be leveling off there continues to be some real possibilities of getting some real “deals”. I found the following article on Fox –Business website. Danielle Babb looks to have written it for Entrepreeur.com. Take a look, you will see some sound thinking when considering getting into the Foreclosure buying mode. We are working with buyers who are working through short sales as well as foreclosures. Give us a call or drop us an email and allow us to show you how we can help.
Offset Your Investment Portfolio with Foreclosures
Danielle Babb
Entrepreneur.com
In the second of my three-part series on alternatives to house-flipping, I'm focusing on how to balance your potentially upside-down portfolio with foreclosure properties--or any property you can get for far less than its market value.
There are many ways to buy houses on the cheap. What's cheap? Thirty to 50 percent below market value, in my view.
Why will banks give up properties for little? First, they don't want them on their balance sheets. Also, what many don't realize is that a foreclosure, even on a house worth less than $100,000, costs the bank about $50,000 in legal and agent fees, fixing up the home and so forth.
What's the ultimate goal? To balance your portfolio with properties that are worth more than you owe and to hold onto them until the value returns, at which point you can either leverage the equity or sell the home. That's why you want to buy properties in the best condition with the least hassle.Getting StartedThere are three primary ways to buy foreclosures. The first is to buy the home in the pre-foreclosure stage. This is the ideal position because you can help save a homeowner from foreclosure, and the bank, homeowner and you--the buyer--work together to decide on a price. Of course you'll offer far lower than the home is worth. But banks frequently accept low offers because they don't want the asset on their books or the $50,000 in costs to foreclose on a home.
Another option is to buy at the REO (real estate-owned) stage, which essentially means a bank-owned property or a home that was taken from the owner and the bank now owns. You can get some deals, but remember the bank will want to get some of its $50,000 back. This isn't where the best deals are found; however, if you're looking into buying a residence to live in rather than invest in, it can be beneficial to buy at this stage because the bank often puts decent money into the home to fix it up. A home I recently visited, still selling for $200,000 under market value, had new carpet, new granite and hard-wood floors just installed by the bank.
The third option, of course, is to buy at auction, but you won't get the best deal here, either. Auction houses take a percentage; many companies aren't reputable, and you may not have a chance to inspect the house before you buy. Add to that the need for at least the down payment in cash and quick financing, and you may find yourself regretting your auction decision. If you do go this route, don't get into the "auction mentality" of getting excited and bidding for the "fun of it." It sounds incredible that people will do that, but it happens.
The bottom line is that if you're upside down, one way to balance your portfolio, just as you'd do with stocks, is to buy cheap and create equity. This balances your overall portfolio a bit better. Foreclosures are a great way to do that.
Tips And TacticsAs with any investment, there are gotchas to avoid and processes to go through. Here are some tips on how to buy foreclosures:
1. Inspect the property! Demand an inspection no matter how you buy it.
2. Be prepared for the bank to request an as-is buy. If that's the case, do a second inspection so you know what you're getting into.
3. Try pre-foreclosures as an alternative to REO and auction sales.
4. Use tools that will help you determine the value of the home, such as domania.com and housevalues.com. HomeGain.com also has some good valuation tools. Also, look for things like the crime rate in the area, how good the schools are, the cost of living, median income compared to national average, and the job growth rate in the area before buying. All these may impact your ability to sell later, as well as how fast your home appreciates.
Offset Your Investment Portfolio with Foreclosures
Danielle Babb
Entrepreneur.com
In the second of my three-part series on alternatives to house-flipping, I'm focusing on how to balance your potentially upside-down portfolio with foreclosure properties--or any property you can get for far less than its market value.
There are many ways to buy houses on the cheap. What's cheap? Thirty to 50 percent below market value, in my view.
Why will banks give up properties for little? First, they don't want them on their balance sheets. Also, what many don't realize is that a foreclosure, even on a house worth less than $100,000, costs the bank about $50,000 in legal and agent fees, fixing up the home and so forth.
What's the ultimate goal? To balance your portfolio with properties that are worth more than you owe and to hold onto them until the value returns, at which point you can either leverage the equity or sell the home. That's why you want to buy properties in the best condition with the least hassle.Getting StartedThere are three primary ways to buy foreclosures. The first is to buy the home in the pre-foreclosure stage. This is the ideal position because you can help save a homeowner from foreclosure, and the bank, homeowner and you--the buyer--work together to decide on a price. Of course you'll offer far lower than the home is worth. But banks frequently accept low offers because they don't want the asset on their books or the $50,000 in costs to foreclose on a home.
Another option is to buy at the REO (real estate-owned) stage, which essentially means a bank-owned property or a home that was taken from the owner and the bank now owns. You can get some deals, but remember the bank will want to get some of its $50,000 back. This isn't where the best deals are found; however, if you're looking into buying a residence to live in rather than invest in, it can be beneficial to buy at this stage because the bank often puts decent money into the home to fix it up. A home I recently visited, still selling for $200,000 under market value, had new carpet, new granite and hard-wood floors just installed by the bank.
The third option, of course, is to buy at auction, but you won't get the best deal here, either. Auction houses take a percentage; many companies aren't reputable, and you may not have a chance to inspect the house before you buy. Add to that the need for at least the down payment in cash and quick financing, and you may find yourself regretting your auction decision. If you do go this route, don't get into the "auction mentality" of getting excited and bidding for the "fun of it." It sounds incredible that people will do that, but it happens.
The bottom line is that if you're upside down, one way to balance your portfolio, just as you'd do with stocks, is to buy cheap and create equity. This balances your overall portfolio a bit better. Foreclosures are a great way to do that.
Tips And TacticsAs with any investment, there are gotchas to avoid and processes to go through. Here are some tips on how to buy foreclosures:
1. Inspect the property! Demand an inspection no matter how you buy it.
2. Be prepared for the bank to request an as-is buy. If that's the case, do a second inspection so you know what you're getting into.
3. Try pre-foreclosures as an alternative to REO and auction sales.
4. Use tools that will help you determine the value of the home, such as domania.com and housevalues.com. HomeGain.com also has some good valuation tools. Also, look for things like the crime rate in the area, how good the schools are, the cost of living, median income compared to national average, and the job growth rate in the area before buying. All these may impact your ability to sell later, as well as how fast your home appreciates.
Wednesday, June 3, 2009
First Time Home Buyers
As you know the housing market is slow and the interest rates are in the buyers favor. If you want to read the short version of the program I will be happy to sent it to you just email me at Ed@RudolphTeam.com Don't miss this opportunity to buy and take advantage of an $8000 tax credit.
To find out how it would work for you drop me a note at Ed&Sheila@RudolphTeam.com and we will show you what to do next.
To find out how it would work for you drop me a note at Ed&Sheila@RudolphTeam.com and we will show you what to do next.
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