2012 Real Estate Market in Review

For many sellers, lenders, appraisers, home inspectors, title and escrow companies, and, of course, real estate agents, 2012 was another very difficult year. The stabilization that so many industry observers had been looking for seems to have occurred this past year. The good news is for home buyers and investors. If you're buying a home to live in or to use as an investment, 2013 looks like it'll be another terrific year.
Here's a recap of what's happened in the 2012 real estate market:
--Roughly 23 percent of homeowners are underwater or are nearly underwater with their mortgages, according to third quarter of 2012 data from CoreLogic.
--Zillow estimates that U.S. homes gained $1.3 trillion in value during 2012, the first year of cumulative gains since 2006. The Case/Shiller Housing Index showed that home prices rose about 2 percent in much of the country. Anything in positive territory is a big gain for homeowners.
--New home sales remain extremely low, with only an estimated 368,000 sold in 2012, according to projections from the Department of Housing and Urban Development (HUD). Still, that's up about 17 percent from a year earlier. The median sales price of new homes was $237,700 in October, due to the supply of new homes being very low. At the current rate of sale, the 147,000 new homes on the market would sell in 4.8 months, a historic low rate.
--But existing home sales reached an adjusted annual rate of 5.04 million in November, up 14.4 percent from a year ago, according to the latest figures from the NAR. While NAR concurs that home values are rising, about 22 percent of home sales were foreclosures and short sales, which sold for deep discounts. Still, even the percentage of distressed sales is down from 24 percent a year ago. And the number of homes on the market is now as low as it was back in 2001.
--Millions of homes have received foreclosure notices in 2012, though the number of foreclosure notices is falling. In better news, Hope Now is reporting that nearly 6 million loan modifications have been done since 2007 through its network of more than 40 mortgage lenders.
--Mortgage interest rates fell in 2012 to historic lows. As we went to press, you could get a 30-year loan for around 3.35 percent, a 15-year loan at less than 3 percent and a 10-year loan for around 2.85 percent. All of this assumes you have excellent credit and at least 20 percent equity in the property.
--Despite ultra-low interest rates, millions of homeowners remain in financial jeopardy, unable to afford their payments, and unable to refinance because of declining or negative equity in their homes.
--The good news is that HARP 2.0 has kicked into gear, and as lenders get used to working with borrowers on its terms, more homeowners are qualifying for a refinance. (Go to MakingHomeAffordable.gov for details on a HARP refinance.)
--Another year has gone by with no ideas on what to do about Fannie Mae and Freddie Mac. Nearly two years ago, the government was required by law to introduce a plan on what to do with these secondary market behemoths. But political infighting and the depressed housing market has kept any new ideas from taking root. Now, everyone is engaged on the fiscal cliff, and Fannie and Freddie are starting to pay back the Treasury with all profits going to pay down the debt. We don't expect much to happen here in 2013.

When we look back over 2012, it's clear that the residential real estate ship has turned.

(Ilyce R. Glink's latest book is "Buy, Close, Move In!" Samuel J. Tamkin is a Chicago-based real estate attorney.)

Homeless Families in New Jersey

I am working with a family with children where both parents lost their job and I am selling thier home. Now that we are near settlement, having exhausted their savings, they have no place to go. This is the hard part of my job. I have been researching options and am open to suggestions! 
In my research I found that between 2008 and 2010, the number of homeless families in New Jersey increased by 40.1% (from 1,580 to 2,215) and the number of homeless children increased by 13.9% (from 3,601 to 4,100). With shelters operating at capacity statewide, the number of persons in families and single households staying in motels with county vouchers has risen 15.6% to 1,457. In addition, there were 1,596 children living doubled up with family or friends, in permanent supportive housing, or in a non-voucher subsidized motel in 2010. Common factors contributing to homelessness in 2010 were unemployment (31.3%), eviction (25.7%), and the high cost of housing (22.3%). Since 2008, there has been an increase in the number of homeless persons accessing mainstream benefits, with the overall percent of homeless individuals receiving benefits remaining constant. Food stamps provided aid to 3,844 or 45.4% of surveyed individuals in 2010.

There has got to be a better way.

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4 Things to Consider Before Converting Basement

Finished space can add resale value, but only if done right. If you're fortunate enough to have a basement in your home, you may have the potential for a substantial amount of additional living space right below your feet. But if you're thinking of converting that cold and unappealing area to a warm and cozy new space, there are several things you'll want to take into consideration first.

1. Is it safe?

One of the very first things you want to look at with any basement conversion is safety, and that can take a lot of different forms. Is there convenient and safe access from inside the house in the form of a stairway that meets current building codes, or is there an exterior entrance that works for what you want to use the space for? Is there a sufficient amount of headroom? Would structural supports for the upper floors be in the way, and if so, can they be moved or altered to allow for the necessary space? If you'll be creating a sleeping room, is there safe and legal egress?

2. Is it dry?

Now we get down to what's a big issue in a lot of basements, and that's moisture. Newer homes are often designed with the proper drainage systems and exterior waterproofing to keep the basement areas dry and ready for building, but many older homes had basements -- "cellars" -- that were designed for cool storage and were never really intended to be occupied. If you have a basement with ongoing or seasonal moisture issues, you need to consult with an experienced excavation contractor before you get started on a conversion project. See what it would take to have a drain installed and have the exterior walls properly waterproofed, and perhaps have the exterior grade adjusted to change the flow of water runoff around the exterior of the home. In some cases, you may need to change gutters and downspouts to channel roof water to a different location, or possibly install a sump pump to handle seasonal water issues. No matter what, be sure that your basement moisture issues are handled before you start closing things up.

3. What will the space be used for?

Once you've determined that you have a space that's safe and dry, decide what you want to use the converted basement area for. That will make a big difference in your design, and also in your construction costs. For example, it may be a big game room, in which case you need little more than wall, floor and ceiling finishes. On the other hand, you may be looking at a bedroom or two, perhaps for guests, with a full bathroom and maybe even small kitchen facilities. In that case, you've got plumbing issues to consider, as well as a lot more electrical wiring, and also ventilation. Some basement spaces are even used as rentals in order to generate a little additional income. If that's your intention, you'll need to take into consideration what the access will be for your tenants, so as to provide privacy for them and for yourselves. You'll need to talk with your plumber and electrician about how the electrical and plumbing services will be split and metered to the spaces. And, of course, you'll need to confirm with your local jurisdictions that having renters is a legal use of the space.

4. Finishing the space

Options abound for the actual finishing of the space itself. One of the first considerations is insulating it, so that it's warm and energy efficient, as well as quieter. The preferred insulation method used by many of today's builders and remodelers is extruded polystyrene insulation. Extruded polystyrene is a high-density, water-resistant, closed-cell foam available in sheets, typically blue or pink, as opposed to the expanded polystyrene -- commonly known as beadboard -- which is white and is comprised of small round foam pellets fused together. Expanded polystyrene has a lower R-value, and is not approved for moisture contact applications. You can apply 1 1/2-inch polystyrene (R-value of 7.5) or 2-inch (R-10) directly to the walls with adhesive. The sheets are 2 feet by 8 feet, and the long edges are notched to accept furring strips every 2 feet. You can then install drywall or other wall finish materials directly to the furring or, depending on the level of insulation you want to achieve, you can add a second layer of rigid foam to the furring, then add your wall finish. Conduit can be attached to the walls first for electrical wiring, and the polystyrene is easy to route out as needed over the conduit. Obstacles such as posts or other structural supports can be framed around using two-by-fours. Horizontal duct runs and large horizontal plumbing runs can be framed into overhead soffits. If there's a sufficient amount of headroom, a suspended ceiling allows for the installation of decorative, sound-deadening tiles that are easily removable to allow access to overhead utilities.

Basement conversions can be a very rewarding use of existing space, and they can add a lot of resale value to your home -- but only if they're done right. If you have any questions about moisture control, insulation, structural issues, zoning or anything else, be sure to get them answered by the pros before you get started!

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Fannie and Freddie Set Timeline Requirements for Short Sales

By Carrie Bay DSnews

Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

The GSEs issued new guidelines Tuesday that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.
Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA).
Addressing real estate practitioners’ No. 1 complaint about short sales, FHFA directed Fannie Mae and Freddie Mac to establish a new uniform set of minimum response times that servicers must follow in order to facilitate more efficient short sale transactions.
The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program.

If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received.
According to the GSEs, this 30-day add-on will provide some leeway for servicers who may need more time to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale. All decisions must be made within 60 days.
In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.
The GSEs plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative.
Edward DeMarco, acting director of the FHFA, says the GSEs new borrower communication and timeline requirements for short sales “set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”
GSE servicers must comply with the new minimum communication time frames for all short sale evaluations conducted on or after June 15, 2012, although servicers are encouraged to begin implementing the new requirements sooner.
“I applaud Fannie and Freddie for finally coming out with real guidance with real world timelines for their servicers,” commented Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty Inc., which specializes in short sales. “There is no question that this will help short sales and the market as a whole.”
Last year Freddie Mac completed 45,623 short sales, a 140 percent increase since 2009. Fannie Mae’s short sale completions shot up by 101 percent over the same period, totaling around 79,800 in 2011.

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FHA will keep funding flips - Waiver for 90-day resales extended through 2012

Waiver for 90-day resales extended through 2012
By Inman News, Wednesday, December 28, 2011.

Inman News®


For the second year in a row, the Federal Housing Administration is extending a temporary waiver of its "anti-flipping" rule, meaning homebuyers relying on FHA-insured financing will continue to be able to buy homes that have changed hands in the last 90 days.

The waiver is a boon for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers to include those relying on FHA-backed loans, popular with first-time homebuyers and others who lack the cash to make large down payments.

In extending the waiver through 2012, FHA said all transactions must continue to be arms-length. In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will apply only if the lender can document the justification for the increase in value, FHA said.

FHA instituted the anti-flipping rule in 2003 to protect its mutual mortgage insurance program from losses on homes that were merely flipped, rather than rehabbed. Homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions were exempt from the rule.

In February 2010, the Obama administration waived the waiting period for resales -- including homes purchased and rehabbed by private investors -- in the hopes of stabilizing home prices and revitalizing communities hit by foreclosures.

It often takes less than 90 days to acquire, rehabilitate and sell properties, the Department of Housing and Urban Development said at the time. Some sellers of rehabbed properties had been reluctant to enter into contracts with FHA buyers because of the cost of holding a property for 90 days, HUD said

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10 ways to keep lid on energy bills

By Paul Bianchina (edited by Clara Lyons)
Inman News™

No one likes wasting money, especially in these tough economic times. So it certainly makes sense -- dollars and cents -- to make a small investment of time and supplies to close up those heat-wasting air leaks around your home. It'll pay back big dividends in reduced energy bills and a warmer, more comfortable house this winter. So let's look at some of the areas where those drafts may be lurking, and see how to take care of them.

1. Doors and windows: This should be an obvious one. If you can see gaps between your siding and your windows or exterior doors, close them up with a bead of clear or paintable acrylic latex caulk. Larger gaps can be filled with foam backer rod before applying the caulking.

2. Exterior penetrations: Some of these areas are going to be obvious, while some may take a little bit of searching. Some examples of exterior penetrations where air can leak into the house include exterior faucets, dryer vents, exterior electrical outlets, exterior light fixtures, holes that have been drilled for phone and TV cables, conduit penetrations, exit points for plumbing drains, and penetrations for air conditioning lines. Closing these penetrations may require a variety of different techniques, including caulk, expanding spray foam, or, in the case of electrical boxes and fixtures, specific gaskets that are designed to fit the boxes.

3. Exhaust-vent covers: Dryer vents, range hood vents, bath fan vents, and other interior ventilation equipment typically terminate outside the house in a plastic or metal cover that has one or more louvers on it. The louvers are designed to be in the closed position whenever the fan is not in use, so that outside air doesn't leak in. Check all of these louvers to be sure they're closing completely, with no air leaks. If they aren't, you can adjust the spring tension to hold them closed more tightly; add foam weatherstripping tape for a more air-tight seal; or replace the entire vent cap with a new one.

4. Gaps around interior vents and recessed lights: Inside your home, heated air can be leaking out around that same ventilation equipment, where vent pipes pass through the walls or ceiling, or where vent covers meet wall and ceiling surfaces. Recessed light fixtures can also be real air-leakers. Around the vent pipes and recessed light cans, seal any gaps with caulking. For the vent covers and recessed light covers, remove the covers, then adjust the springs and/or add foam weatherstripping tape to create a tight seal between the cover and the ceiling.

5. Heat-duct penetrations: Gaps around heating-duct cans where they pass through the floor or wall allow cold air to enter from the crawl space, while gaps around ceiling-duct cans allow heated air to escape into the attic. To close those drafts, first remove the register, then use a combination of caulking and/or metallic duct sealant tape to close any gaps between the sheet metal cans and the floor, wall or ceiling surface.

6. Fireplaces and woodstoves: Lots of gaps can occur around these appliances. With a conventional fireplace, keep the damper closed except when burning a fire to prevent heated air from escaping up the chimney. Consider investing in a set of air-tight doors, which close off the air leaks and also make your fires more efficient. Look for gaps around woodstove and gas fireplace flue pipes, and air leaks around masonry chimneys. Use a metal collar if necessary around flue pipe penetrations, and seal gaps with heat-resistant sealant specially formulated for this application.

7. Attic and crawl space hatches: These can be real air losers if they're not weatherstripped, so take care of that with some foam tape. Make sure the hatches are insulated as well.

8. Interior doors to unheated spaces: If you have any interior doors that lead to unheated spaces, including basements, garages or attics, be sure the doors are weatherstripped to prevent air leakage. If possible, replace older, hollow-core doors with solid-core or, better yet, insulated metal doors.

9. Sill plates and penetrations: This one's not as easy to deal with, but it's well worth the effort to try to do whatever you can with it. Air can leak both into and out of the house through gaps where the sill plate meets the foundation or the siding, and around plumbing and wiring penetrations drilled through wall plates in various areas. If you have a gap between your siding and the bottom of your exterior wall, especially in older homes where the use of sill sealers was not a common practice, consider closing up this big air gap with a bead of caulking or expanding foam. In the basement, crawl space and attic, if you can access any of the pipes and wires that pass through the wall plates, seal the penetrations with expanding foam.

10. Deregulation has come to the energy market, creating opportunities to save money on your energy bill and still get your bill from the same provider. Paste this url into your browser and see if your area is included:
http://energy.5linx.com/Default.aspx?language=en-US&strRIN=L432054

Know someone who is thinking of buying or selling real estate?
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The Time to Buy is NOW!

The signs have been there: record-low interest rates and reasonably priced homes.

This week, the Wall Street Journal presents two factors that make now “an excellent time to buy a house.” First, the ratio of home prices to yearly rents is close to its pre-bubble average. Second, when mortgage rates are considered, houses are the most affordable they have been in decades.
The article goes on to explain that whether or not buying is a better deal than renting depends on the relationship between prices and rents, the cost of financing and other factors. The good news is that the numbers all seem to be heading in the right direction.

According to Moody’s Analytics, the nationwide ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble. With all things being equal, a lower ratio means buying is preferable to renting. Even though the price/rent ratio is not as low as it has been, house payments are more affordable than they have been in decades because mortgage interest rates are so low.

And, despite public opinions otherwise, mortgage money is available according to information in the article attributed to Stan Humphries, chief economist at Zillow, a home and real estate consumer website.

The article closes with this advice: “When prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”

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5 Reasons to Loosen Rules for Investors & Underwater Owners

A plan to jump-start housing
By Jack Guttentag
Inman News™

Share This Editor's note: This is the third in a three-part series.

Previous articles in this series argued that, absent a liberalization of Fannie Mae and Freddie Mac lending terms, a second round of home-price declines was very likely. Renewed price declines would have a devastating effect on homeowners and the economy, and would also increase Fannie and Freddie losses on both old and new loans.

This makes the liberalization of lending terms a requirement of responsible conservatorship.

The changes needed include a rollback of risk-based price adjustments to where they were before the financial crisis, and relaxation of misguided underwriting rules.

Previous articles focused on the need to modify rigid affordability rules, eliminate income documentation requirements for sterling borrowers, and eliminate the requirement for property appraisals on purchase transactions. This article identifies a few more.

Liberalize lending terms and remove restrictions on loans to investors

Investors buy houses to resell or to rent rather than to occupy. During the go-go years, investors bought houses to resell at a profit, and in the current depressed market they are buying houses either to sell or to rent until the market improves.

Laurie Goodman has shown how important investors are to restoring a supply-and-demand balance in the current market. The problem is that there are fewer investor loans now, when we need them, than there were before the crisis -- when we didn't need them.

The major barrier to additional home purchases by investors is the onerous rules imposed on investor loans by Fannie Mae and Freddie Mac. In September 2006, Fannie Mae charged 1.5 to 2.5 points extra if the borrower was an investor rather than an occupant, and investor loans could be up to 90 percent of property value. Today, the price increment is 1.75 to 3.75 points, and the maximum loan is 85 percent of property value.

Fannie and Freddie also limit the number of loans that any one investor can have to four, with up to 10 allowed under more restrictive lending terms. This restriction has the effect of limiting the home investor market to small players.

The higher prices, lower maximum loan-to-value ratios, and limits on the number of loans an investor can have are all counterproductive in the current environment. Investor activity would be stimulated if 90 percent loans were available at a 1 point price increment and limits on loan numbers were eliminated. When home prices start rising by more than 3 percent a year, the old rules could be reimposed.

Eliminate LTV and appraisal requirements on HARP loans

The Home Affordable Refinance Program (HARP) was designed to make refinance possible for underwater borrowers who are current on their payments and whose loans are owned by Fannie or Freddie. A major problem with the program is a maximum loan-to-value ratio (LTV) of 125 percent, which cuts out a sizable segment of the potential market for no good reason.

I can see why the agencies might have limited the program to borrowers with LTVs above 125 percent. The net loss to the agencies from refinancing is lower for high-LTV loans than for lower-LTV loans because high-LTV loans are more likely to default and lower interest rates will prevent some of these defaults.

The loss to the agencies from refinancing underwater mortgages is the interest loss on loans that would have remained in good standing had the refinance not occurred. This loss is not related to the LTV. The benefit to the agencies is the loss avoided on loans that would have defaulted but don't because of the rate reduction. This benefit is larger for higher-LTV loans, which are more likely to default.

By scrapping the LTV maximum in the HARP program, the agencies would also be eliminating the need for appraisals, which would simplify the program and expedite the implementation.

Concluding comment

There are many more changes in Fannie and Freddie rules that would help to generate increased housing demand, but my internal editor says that more examples are not needed. The overriding need is recognition by the agencies and its conservator that assets are not conserved by acting as if Fannie and Freddie are small lenders with no power to affect the market.

These entities are a major part of the market, and their assets are best conserved by policies that convert the currently anemic market into a healthy one. Once that principle is accepted, I will be happy to flesh out the list, and so will many others.

The author, Jack Jack Guttentag, is professor of finance emeritus at the Wharton School of the University of Pennsylvania.

4 Dont's When Selleing a Home

By Melissa Dittmann Tracey, REALTOR Magazine

Kelly O’Ryan, an office manager for Coldwell Banker in Lexington, Mass., recently highlighted several tips of what home owners shouldn’t do when trying to sell their home in an article at RISMedia. Here are a few don’ts that made it on their list, see if you agree!

1. Don’t slack off on home maintenance. Houses in need of TLC often attract investors or property flippers, which are known for submitting low-ball offers. To attract offers and the highest bids, sellers should attend to any upkeep and maintenance issues before putting the house for sale.

2. Make sure the home isn’t being overshadowed outside. Nothing kills curb appeal more than a home you’re selling that you can’t even see. Be sure to trim trees or bushes to ensure they aren’t blocking any windows or the exterior of the home.

3. Remove wallpaper. Wallpaper and borders can be a nuisance to remove so you might want to take these personal decor touches down before you list the home. Neutralize the homes in subtle colors that will appeal to the most buyers and allow buyers to better visualize their personal decor moving in.

4. Don’t keep an empty home empty. Buyers can struggle in picturing themselves moving in if a home is left empty. Vacant homes can feel cold and rooms can look smaller than they really are. That’s why O’Ryan reminds us why builders spend thousands of dollars staging model homes. If your listing is vacant, consider staging it to bring in furniture and accessories to help define the various rooms functions.

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Happy Mother's Day

My mother is living and well in sunny California! I love her dearly as she is definitely one of the true angels who dwell on this planet in human form. If she were catholic, she'd be a saint!! Everyone is always wanting to claim my mother as their own...and I understand how wonderful she is so I don't mind it too much...But I remind them, especially when I am home, that she is MY mom! LOL....

I am also fortunate enough to be surrounded by a few wonderful women who I call "MOM", one of which is my mother-in-law. My husband & I picked her up, after moving through the Susan B Orman Cure for the Cause traffic. This traffic jam had me ponder that every event is an opportunity for something wonderful. I saw parts of the city I'd never seen which were beautiful and reminded me of the rich history of the architecture of the city. One of the reasons that I got involved in real estate is that I love both structures and landscapes...Yes I'm a tree hugger. LOL.
We joined my brother in law and his wife for a wonderful Cuban "dim sum" at Cafe Libre. I thought I had won a guest judge spot on TOP CHEF. The chefs tasting menu was just that, a sample of most of the menu in small but fulfilling portions.

The appetizer course consisted of three spreads: one consisting of eggplant & spices, another a black bean hummus - yummy, and the third a seafood chopped salad to be dipped with plaintain, casaba? and yucca chips.

The next course, another trio of chicken & corn, beef & shrimp & spinach enpenadas, crab cakes, tuna ceviche, and ribs, all over unique spicy/sweet relishes. By the main course, my taste buds were peaked and my belly kinda full...but the anticipation of the entree trio had me push through.

The entree course was a trio of mahi mahi, perfectly seared, buttery delicate and sweet; a jumbo prawn on a sugar cane stick - very nice touch; and a medium, tender beef steak. All served with a side of rice and fresh sweet plaintains! I don't know where I put it, but I did not leave anything on my plate...It was scrumptilicious!

Okay one more course to go! A trio of desserts...Really...no room....creme brulee, rice/tapico? pudding and a triangular jelly filled crisp bread. Okay so now you can pull me up off the floor as I am passed out on food. So I ordered a cafe con chocolati...a cuban mocha with expresso but smooth cuban cofee....to wake me up for the drive back to my in-laws....and then back across the bridge to my bed beckoning me from home!

Given that the past few weeks in real estate have been extremely busy as the the weather gets nicer, it was nice to have a day off...only a few of my clients called...most to say Happy Mother's Day...to enjoy a true break in the day and a moment with family and friends.

As I said, I love structures and landscapes....Cafe Libre was an opportunity to be transported to another country in the middle of the afternoon. The open lower restaurant, faux windows, buildings and banana fans, the food, the service, down to the check in a cuban cigar box created a new memory to share and a perfect compliment to living in the trio of Philadelphia, New Jersey, & New York.

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The Cost of Waiting for Prices to Fall

by The KCM Crew

Many purchasers have been sitting on the sidelines waiting for home prices to hit bottom. They want to guarantee that they are purchasing at the best possible price. Like them, we also believe that prices still have some room to fall in most markets. However, we disagree that waiting is a good financial decision. The buyer should not be concerned about housing prices. They should be concerned about cost.


The cost of a house is made up of the price AND THE INTEREST RATE they will be paying. Two different pieces of news released yesterday highlight this point.


PRICES
The National Association of Realtors (NAR) released their 4th quarter housing research report. In the release, they reported that home sales rose 15.4% in the 4th quarter over the 3rd quarter. They also showed that prices remained stable during the year: The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009. A buyer who delayed a purchase might find solace in the fact that prices have not increased. However, the other news released yesterday paints a different picture.


INTEREST RATES
The Primary Mortgage Market Survey was released by Freddie Mac which showed that the 30 year fixed rate mortgage was at 5.05%. Frank Nothaft, vice president and chief economist of Freddie Mac said: “Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week…As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”


So prices have remained stable but interest rates have risen dramatically in the last 90 days. What does that mean to a buyer looking to purchase a home this year?

The price is the same. It just costs more. Let’s show you what the news means:

By sitting on the sidelines for the last 90 days a purchaser lost:
- $89.44 a month
- $1,073.28 a year
- $32,198.40 over the thirty year life of the mortgage
If you buy a $340,000 home, double all these numbers.

Bottom Line
Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year.

Thinking about purchasing?

Call CLARA today!

856-264-1058

HUD Condo Guideline Extension Could Translate to Increased Condo Sales

Buyers interested in purchasing condominiums with an FHA loan may already know that the condo development must be on the FHA approved list. In order for the condo development to be on the list, the development must meet certain HUD guidelines.

Recently, HUD released Mortgagee Letter 2011-03, which extends the temporary guidance for condominium rules through June 30, 2011. These temporary guidance changes increase the chances for a condo development to be approved.

Mortgagee Letter 2011-03 extends and clarifies temporary guidance announced in Mortgagee Letter 2009-46 A. The temporary guidance:

1. Increases Federal Housing Administration (FHA) concentration requirements to 50 percent,


2. Requires 50 percent of units in a project to be owner-occupied but vacant and REO property are not considered in the calculation of the owner-occupancy percentage,


3. Reduces the pre-sale requirement to 30 percent,


4. All projects in Florida are required to be reviewed under the HUD Review and Approval Process (HRAP), and


5. The Spot Loan Approval Process was eliminated on February 1, 2010, for all FHA case number assignments on or after February 1, 2010 and is not extended.

The temporary guidance is effective for all FHA case numbers assigned through June 30, 2011, excluding spot loans.

As the number of REO condo units increases, vacant and REO units may adversly affect condo developments ability to meet the owner- occupied percentage. This change alone, may keep more develpments on the list for FHA financed loans. That could translate to more homes being sold in condo developments as many Buyers utilitze FHA loans which require only 3.5% downpayment for property purchases.

Looking to Buy or Sell?

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ClaraSellsHomes@gmail.com

Making Your Home Loan Affordable

You or someone you know may be facing challenges keeping up with your mortgage payments OR you may just want to reduce your interest rate to take advantage of the fixed lower interest rates. If you are feeling overwhelmed and wondering where to get help, now there is really help!

In February 2009, the Obama Administration introduced a comprehensive Financial Stability Plan to address the key problems at the heart of the current crisis to get our economy back on track. A critical piece of that effort is Making Home Affordable, a plan to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure.

Get the information you need NOW to MAKE YOUR HOME LOAN AFFORDABLE. The Making Your Home Affordable website gives information on the five programs now available. These 3 links were taken from the site:

1. Explanation of the 5 Programs available (inlcuding program to reduce 2nd mortgage payments) - http://makinghomeaffordable.gov/eligibility.html

2. Documentation Forms needed: http://makinghomeaffordable.gov/requestmod.shtml

3. Lenders who service these programs - http://makinghomeaffordable.gov/contact_servicer.html

All these links are on the same site. www.MakingHomesAffordable.gov. They are all govenment sponsored programs that give incentives to the banks to work with homeowners to KEEP their homes. You can appy ONLINE

SHARE THIS INFORMATION WITH OTHERS!!!

Also feel free to call me if you have any questions, choose to sell your home, or want information about the short sale process.

Clara Lyons, Realtor/Realtist
NJ State President NAREB, National Assn of Real Estate Brokers (NAREB)

I turn real estate dreams into reality! - One Home At A Time!
856-264-1058
ClaraSellsHomes@gmail.com

Know anyone thinking of buying or selling? I love referrals!!

As you may have heard, the real estate industry received a big win today when President Obama signed two important pieces of legislation into law.

The first one extends the closing deadline for the homebuyer tax credit until September 30, 2010, for any transactions that had ratified contracts in place as of April 30, 2010, but have not yet closed. Previous blog was about the Senate approval...Now that the President has signed it is official naitionally. Real estate agents working with buyers who fit into this category, please let them know about the extended deadline.

In addition, the National Flood Insurance Program, which provides flood insurance to homeowners in participating communities in flood-prone areas who could not otherwise obtain coverage due to cost or ineligibility, was also extended until September 30, 2010. As a result, buyers in these areas can now obtain mortgages and transactions can move forward. This bill is retroactive and covers the lapse period from June 1, 2010, to the date of enactment of the extension.

If you or anyone you know is interested in purchasing real estate, please:
Contact Clara at 856-264-1058

FREE: Find home values in your neighborhood...Click on Home Values link

Senate Passes Home Buyer Tax Credit Extension

Recently the United States Senate approved an amendment to HR 4213, the American Jobs and Closing Tax Loopholes Act of 2010, which would extend the homebuyer tax credit closing date deadline from June 30, 2010 to September 30 2010.

The amendment applies only to purchasers who have satisfied the April 30 binding contract rule for the $8,000 & $6500 tax credits and creates no new eligibility. Before the Senate bill can be sent to the president for final approval, it must be reconciled with the House legislation. (Source NAR/NJAR)

Thinking about Selling, Leasing, or Buying?

For all your real estate needs

Call CLARA at 856-264-1058

New Short Sale Rules

New rules are in place for sellers in regards to short sales. A short sale is when the bank accepts less than what is owed on the property for sale. Below are the basic guidelines:

1. In order for the bank to accept a short sale Sellers must NOT qualify for a loan modification under the Home Affordable Mortgage Program or be unable to afford the modification.

2. The bank will set an acceptable value of the home upfront, based on an appraisal or broker’s price opinion.

3. Lenders must approve or deny a purchase offer within 10 days of it being submitted.

4. Once the bank approves a home for short sale, sellers may stop paying all related mortgage payments, and unpaid mortgage debt will be forgiven. These mortgage payments will not be shown as late on credit reports.

5. At closing, sellers are entitled to as much as $1,500 from the government to cover relocation expenses.

Thinking of Selling or Buying?

CALL CLARA for all your real estate needs

856-264-1058

Record Open House Attendance

My listing at 60 Acadia Drive had over 25 families come through, with an average of 3 to 8 people per family, it was like I was having a party! What fun! In addition to invited guests, interested neighbors, and Sunday sign shoppers, I also had realtors bring their clients.

The result? Multiple offers and an accepted offer in 4 days after the Open House well over the asking price.

The spring season is underway and buyers are out there looking for properties to beat the April 30th tax credit deadline for both buyers ($8,000) and sellers ($6,500). For the weekend of March 20-21, over 18000 people visited Weichert Open Houses, the best Open House attendance this year! Also, the average number of attendees at a specific Open House increased as well.

Of my 6 listings I had on the market at the begining of the year, 5 of them are under contract and scheduled to close. Sellers are happy and you can be too!

THINKING ABOUT SELLING! BUYERS ARE OUT THERE!

Call Clara: 856-264-1058

Grants available for Oil Tank removal, installation and leak remediation

Do you have or know someone with an underground oil tank that is currently inactive because they switched to another fuel source or went to an aboveground tank? Grants are available to offset the cost of this expense. Before putting your home on the market for sale, be sure to take the steps in advance to have the tank removed.

New Jersey has a grant to assist with the cost of this process. In addition, some companies, like Merdian Environmental Services, will do the work, provide a "contractor non-leaking certification form", forward the certification form along with all the NJEDA required forms to the homeowner to fill out along with a copy of paid invoices and receipts, as needed. The homeowner can then sign the forms and submit them with copies of their last three years tax returns and a $250 non refundable application fee to the NJEDA. Reimbursement usually takes 4-6 weeks.

NJEDA will reimburse up to $1,500 for the removal of a non-leaking underground oil tank and up to $3,500 for the removal of a non-leaking underground oil tank and the installation of a new aboveground oil tank.

If the oil tank has leaked, there is another grant from the NJDEP UST Fund for any clean up costs up to $500,000 that a home owner would be responsible for, and in the process have the oil tank removal and installation costs reimbursed to the home owner.

This program is available to residents of the State of New Jersey, with a taxable income of less than $250,000 per year and a net worth of less than $500,000, not including the value of their primary residence and retirement savings (401k/IRA/pension). This program is also available to non-profit orgnizations. Other restrictions and eligibility requirements apply.

Please feel free to visit the NJEDA at njeda.com or newtanksnj.org for more information and to download and review the required forms.

Homeowners should verify that they are qualified by using the"Grant Worksheet" to determine if they pass the Financial hardship test. In order to qualify for a 100% grant reimbursement the applicant's annual expenses need to be at leas 51% of their annual taxable income. Some companies like Meridian Environmental, supply these forms with their oil tank removal proposal. Meridian Environmental can be contacted at 732-281-1900 or 609 654-0660 for more information. Let Meridian Environmental know that Clara Lyons referred you.

Thinking of BUYING or SELLING?

Click on the Home Values link top right on this page to get FREE information about the value of homes and the services in neighborhoods that interest you.

Contact Clara at 856-1058

Relationships! Relationships! Relationships!

My Sunday Open House at 219 Mimosa Dr in Cherry Hill was typical in most respects.

Like usual I put out at least 8 directional signs, balloons, & flags. Like usual I had a sign in sheet for guests. Like usual I turned on all the lights, opened all the blinds and turned on the fans...YES, we are past the snow and it was a gorgeous SUNNY SUNDAY. And like usual a neighbor or two stopped by to see what was going on with the home and I had some very lovely families stop by as well.

So what was different! This Sunday I had the opportunity to just talk with one of the families. They really loved the home...They are working with an agent and the property is not my personal listing...so I was really present to the joy of just engaging in conversation.

Unlike some realtors, I am in this business for more than just the sale. I really enjoy sharing my experience and knowledge of the market with others. Also each person I meet provides something very special that adds to me and I hope I give something back.

Yes we talked in great deal about real estate and I offered them everything I would offer to my VIP clients. I gave them the new tax credit benefits for buyers and sellers. I told them about other properties that might also interest them. We talked about the challenges of selling the home they own. They shared with me about their family and what they really needed and wanted in a home.

I shared with them about this website and how they could get home values and neighborhood information on this website just by clicking the HOME VALUES link.

They were my last guests of the day and they were in the house between clients and until the Open House ended, well over an hour. It was a pleasure, just being in relationship.

To top it off...and this is happening to me often, I was stopped twice while I was picking up my directional signs by neighbors. One wanted to know about the house..and in the middle of the street we chatted for awhile about the real estate market. The second person shared information with me about neighbors and we talked about the possibility of listing a property.

Both people stopped me because I acknowledged them, greeted them and smiled. Not because I expected anything..but because I enjoy being in relationship. Life is more than the work, the tasks that make up the work...It's about people...and the lives we touch each and every day.

Thinking about BUYING or SELLING? Call Me: 856-264-1058

Insuring a Vacant Home

Take steps to properly insure any vacant property you own.

• A home is considered vacant when it is unoccupied and all personal property has been removed.


• Listing clients who move out of their home before it is sold need to know how their insurance coverage is impacted.


• Most homeowner insurance policies retrict coverage when a home is vacant for more than 30days, after which point claims will likely be denied should a loss occur.


• Sellers should consider special coverage such as the Vacant Home Program offered by Weichert Insurance Agency.

Call 1-866AGENT for more information.