Posted by Kim Adamof on Fri, Oct 23, 2009 @ 11:37 AM
November 30, 2009 is coming up fast. That's the deadline for closing a home using the first-time home buyer tax credit. There isn't much time to find a house and close.
With housing prices the lowest they have been in a decade, now is a smart time to buy a home. Here are six reasons why home buyers are running out of time:
The economy is improving
The worst recession since the Great Depression may be winding down, said The Conference Board on August 20, 2009. The analysts found that leading economic indicators rose 0.6% in July, following a 0.8% rise in June. That's two consecutive months of improvement halting 8 months of declines.
While the indicators can certainly slide backward new data, serious first-time home buyers should realize the days of wholesale bargains may be numbered.
Banking issues
Since May, 2009, Federal Housing Finance Agency appraisal regulations have slowed home sales transactions to the point that major lenders are telling loan originators that closings could be delayed by as much as an extra 15 days. The National Association of REALTORS® has found that 76% of its members reported delays in closing.
As the first-time home buyer tax credit comes to a close, banks will be inundated with loan applications for an already narrow production pipeline. Home buyers should allow at least 45 days to close, and a few days extra in order to have time to correct errors or delays during the closing process.
That means with the pipeline full of mortgages being processed, now is the time to get in line and make the deadline of November 30, 2009.
Federal bailout fatigue
If the government concludes that additional stimulus is needed for the economy, it's likely that the first-time home buyer tax credit will be extended, but you're taking a chance to count on it.
From Cash for Clunkers to Making Home Affordable programs, and many more, the federal budget is at its limits. In total, the economic stimulus bill has added $787 billion to a federal budget already careening out of control.
The largest federal deficit ever reached $1.3 trillion in August 2009, says the Congressional Budget Office's monthly budget review. The deficit grew largely because of the Troubled Asset Relief Program (TARP) $169 billion, in which $83 billion went to support Fannie Mae and Freddie Mac. Expenditures from the American Recovery and Reinvestment Act of 2009 (ARRA) have totaled more than $125 billion.
Inventory is being absorbed
Nationally existing, or pre-owned home inventories are slowly being absorbed, and are at a 9.4-month supply in July, while standing builder inventories were at 8.8-months-on-hand in June 2009.
At their highest during the recession, new and existing home inventories hovered at 11 months on hand. A balanced market is approximately six months of inventory on hand. New home housing sales have improved three months in a row in June.
If the current rate of improvement in existing homes remains at a steady pace, (from 9.8 months on hand in June to 9.4 months on hand in July,) the existing housing market could be balanced (on a national basis) in approximately 8 months.
Seller's market for affordable homes
Existing home sales in July 2009 increased four months in a row, says the National Association of REALTORS®. The national median existing home price was $178,400, 15.1% lower than a year ago.
Pressuring prices and inventories are foreclosures, which contributed to a 7.3% rise in inventory, which the sales pace absorbed, keeping inventory on hand at 9.4 months on hand for two consecutive months. Lawrence Yun, chief economist for the NAR says that improved affordability has driven sales with first-time home buyers taking advantage of the tax credit. "The demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint," he said in a statement to the media.
One-third of homes sold in July were to first-time home buyers.
Interest rates are going down
The percentage of foreclosures in the second quarter 2009 were the highest ever recorded by the Mortgage Bankers Association, and the trade organization says that foreclosures will grow and peak at the end of 2010.
One-third of homes sold in July were short sales or in some stage of foreclosure.
What's disturbing is that one out of three homes in some stage of foreclosures are prime fixed rate mortgages, suggesting that joblessness is impacting borrowers ability to pay their mortgages.
First-time unemployment filings rose mid-August, which indicates that the recession isn't over yet, and that housing inventories will continue to rise.
If that's the case, the Fed will strive to keep mortgage interest rates as low as possible to continue the momentum in housing sales.
Your competition is other home buyers
The accumulative effect of all these market conditions - rising foreclosures, low interest rates, jobless claims, government incentives and more are that home buying is going to be at its most attractive level through the end of summer and into the fall and early winter.
In July, housing sales transactions jumped 7.2 % - the largest monthly sales gain since 1999. Price-to-income ratios have fallen below historical trends, says Yun.
That means that home buyers at all price levels may jump into the market, crowding lender pipelines even more.
If you want a smooth transaction, and to take advantage of the $8000 tax credit, the time to act is now. Contact one of our professional buyers agent for more details.
Posted by Kim Adamof on Tue, Jun 30, 2009 @ 11:30 AM
Sales of Condos are likely to increase as retiring boomers downsize and buy second homes. This is especially true in the high-end market, where more wealthy folks are trading in luxury homes for luxury condos.
The First-Time Homebuyer Tax Credit of $8000 and cheap mortgage rates have brought homeownership within the grasp of many renters. Those who can't afford single family homes are opting for a condo.
When you own a condo it's typically, but not necessarily, in a building with other units. With condo ownership everyone shares in the ownership of the common areas equally or based on some predefined formula. The common areas, for example, include the structure (floors, walls, ceiling...etc) of your particular unit/building, club house and pool, if any, and any other structures.
Here are 6 Tips when considering purchasing a condo in the Raleigh Real Estate Market:
HOA Fees not escrowed by Lender.
HUD has considered the idea of escrowing condo association and HOA dues; that is, requiring FHA borrowers to pay dues and fees into an account and then paying the condo association from the money collected. The logic behind this idea is not unreasonable because unpaid condo fees or a lien against the property which means that property owners who don't pay even small charges may find that they face foreclosure. However, in the face of public comments HUD has decided that it will not require condo or HOA owners to escrow fees.
Understanding Condo Condition
Potential owners must thoroughly understand what their purchase will involve. You should hire a home inspector to check the physical and mechanical condition of your unit.
Too frequently people don't take the time to investigate repair issues, so they buy in and then find they have to make additional financial contributions to fix issues with the building. Owners can personalize their condos, but some projects must be pre-approved. As aging buildings require updates, many associations are allowing more significant changes, including additions, so long as they don't disrupt common elements.
Major repairs to the outside or commons areas, are bid out, then an assessment is charged to each homeowner. The assessment must be paid prior to selling the condo. This is not a planned or budgeted expense.
Ask about the associations operating budget
Prospective owners have a right-and should make the time-to examine an association's books and records. It's important to understand the financial stability of a condominium, the increases in its association fees, its reserves. If the questions can be answered in a positive way, then a person can be assured that the condominium is reasonably well managed. Bad signs: more than 10% of owners are late paying their condo association fees, and more than 50% of maintenance liabilities aren't funded.
Your association may charge a use fee for common amenities like a pool or clubhouse or even collect a refundable security deposit. It may not seem fair for unit owners who already pay monthly maintenance fees. On the other hand, many associations are struggling to pay bills and want to be in position to make timely repairs to a clubhouse should neighbors damage it. Collecting usage fees or security deposits is a way to accomplish that.
Are you able to follow your amenities rules? Read the codes and regulations
Owning part of a community can have many benefits. Owners get to enjoy the common amenities-perhaps a community pool, attractive grounds, or recreational opportunities. Owners are also subject to association rules and regulations. The rules can apply to such factors as assessments, landscaping, parking, noise, number of cars, and even your choice of paint colors. Many restrictions are designed to preserve the complexes value, but you may find the lack of freedom stifling. Make sure you know what you're in for.
Talk to other owners
Talk to other occupants. A high number of renters or complaints about the condo association should be red flags.
Typical areas of conflict are noise, pets, and parking. Association rules attempt to strike a balance between the best interests of the individual and the community. Rules are not usually onerous and are commonly adapted by the association to fit the people who live there.
Get condo insurance
The condo owner will need to buy a condo insurance policy. This is very similar, but not exactly the same, as apartment renter's policies. The cost for these is typically very low especially when compared to a homeowner's policy. When comparing monthly costs be sure include the cost for insurance plus the condo fee. The primary reason for the lower cost is that the building structure insurance is part of the condo fee as it is common property.
Posted by Kim Adamof on Thu, May 21, 2009 @ 10:38 AM
With all the negative real estate news over the last couple of years, it is good to hear any positive tidbits we can get our hands on. And that's just what happened this morning on NBC's Today Show where real estate legend Barbara Corcoran presented her list of cities on the brink of a recovery.
Leading the list is Denver which Corcoran said "is clearly on a rebound" compared to any other city in the nation. "It's really the perfect real estate success story," she said. "It had one of the highest foreclosure rates in the nation for years running, and now they've cut that foreclosure rate in half and they've turned the corner."
Visit msnbc.com for Breaking News, World News, and News about the Economy
The other cities on Corcoran's list of cities poised for a real-estate rebound include:
- 2. Raleigh, NC
- 3. Austin, TX
- 4. Seattle, WA
- 5. San Francisco, CA
Key Factors driving the Raleigh Real Estate Market.
Job growth potential. We have stable major employers such as Wake County Public School System, North Carolina State University, WakeMed Health & Hospitals, Rex Healthcare, Progress Energy, Misys Healthcare Systems, Longistics, and Waste Industries.
Raleigh has a growing population. In 2000 there were 1.3 million residents in the Triangle. In 2008 that number grews to almost 1.7 million. Its estimated that we will be at almost 1.8 million by 2010.
You can't beat Raleigh's Good Weather. Though it is true that it can get quite warm in the summer, Raleigh offers a fantastic overall climate with four distinct seasons.
First-time Home Buyers in Raleigh Real Estate Market. Currently there are 452 houses for sale in Wake County under $150,000 3 bedroom/ 2 bath. With good inventory and the $8000 Tax Credit, now is a great time to buy your first home.
Raleigh Offers A Vital Downtown. Raleigh offers residents and visitors easy access to abundant venues, activities and attractions including top-notch museums, theater, and music.
A well educated population. 54% of the Raleigh population has a college degree. With top colleges and universities located around the Triangle, Raleigh is a wealth of educated resource.
Foreclosures earlier than other cities. A quick look at the Raleigh, NC Foreclosures, Default, Auction and Bank Owned Properties page shows there are currently 1,062 properties somewhere in the foreclosure process.
If you're interested in seeing what Raleigh has to offer in regards to real estate, click Raleigh North Carolina Homes For Sale and Raleigh MLS Listings.
Posted by Kim Adamof on Wed, Apr 15, 2009 @ 07:10 PM
Clayton NC Real Estate looks at the National Association of Realtor's current economic outlook to find out the following information:
NAHB Housing Market Index
An indicator of sales and expectations for future home building, the Housing Market Index saw a 5 point increase in April to 14. This was the biggest gain since last October. Family purchases showed improvement, indicating the boost to the housing market from low rates, low prices, and the $8,000 first-time buyer credit.
Finally, a large jump in the Housing Market index indicates a more positive outlook among home builders who believe that the housing depression is at or near the bottom and housing activity is picking up.
Even though we aren't out of trouble just yet, the economists suggest we're at the bottom.
Posted by Kim Adamof on Mon, Jan 19, 2009 @ 09:45 AM
I received a call today from a man wanting to buy a foreclosure. Seems he signed up on a Foreclosure Website because they told him there is government money out there for him to be able to buy a home.
I cautioned him because there are also scammers trying to "sell" him a foreclosure. Please be careful with what people tell you because it could end up costing you more money than you need to spend.
Your first step to buying a home is going to your banker and getting prequalified. Questions you need to determine. How are you going to pay for the house, FHA, VA or Conventional loan? How much money do you have to put down? What is your credit score?
Yes there is government money out there but it's based on your credit score. In order to qualify for a loan your credit score needs to be at least in the 600s. I'd personally recommend you learn how to improve your credit score all the way up to 700 to get the BEST rates. This will allow you to buy a nicer house for the same amount of money than if your credit score was lower and you got a higher interest rate.
Also TELL the banker how much money you want to COMFORTABLY pay monthly as a mortgage payment. Don't let them tell you how much you qualify for (my personal opinion again). The banker will tell you that $xxx Sales Price will get you the monthly mortgage payment you want. Then you'll know how much to stay UNDER when searching for a house.
After you determine that you can qualify for a loan, then narrow down the area you want to live in. I can set up your email address to receive daily updates on houses for sale that meet your criteria. Start searching for houses for sale.
My next suggestion is that you drive by the houses to make sure you like the lot and location. We realtors take nice photos of the listing but we won't show you the neighbors or the area :)
After you narrow down your search to about 10-20 houses that possibly meet your needs, email me your showing list. We'll set up a time to meet and go out and look inside houses. We'll evaluate each house and it's potential for your family. I like to scale houses from 1-10 (one being you'd never buy it and 10 being you want it now - no 5's, its not fair).
Once you've narrowed down your list to about 3, we'll take a second look to decide which one you'd like to make an offer on. In the meantime, I will do research on each potential house so that you'll know that the price is in line with the neighborhood and there is no issues to worry about.
Then we'll meet to write up an offer. Once the negotiations are done, you'll be officially under contract and we start inspections. I can go on and on but it starts with getting prequalified. Good luck and stay in touch with me. I'd love to help.
Posted by Kim Adamof on Tue, Jan 13, 2009 @ 11:32 AM
I was reading John Chow's Blog and found this
FREE download link for Suze Orman's new book called 2009 Action Plan. The link expires on Thursday 1/15/09. I've uploaded
chapter 7 onto my website for your reading if you don't get the free download in time.
Posted by Kim Adamof on Sun, Jan 11, 2009 @ 07:00 AM
First-time homebuyers should begin planning now to take advantage of a new tax credit. Available for a limited time, the credit:
- Applies to home purchases after April 8, 2008, and before July 1, 2009.
- Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
- Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even
if they owe no tax or the credit is more than the tax that they owe.
The credit operates much like an interest-free loan because it must be repaid in equal installments over a 15-year period. Taxpayers will claim the credit on new IRS Form 5405, First-Time Homebuyer Credit.
Only the purchase of a main home located in the United States qualifies. Vacation homes and rental property are not eligible. For a home that you construct, the purchase date is the first date you occupy the home.
Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.
If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. If you make an eligible purchase in 2009, you can choose to claim the credit on either your original or amended 2008 return, or on your 2009 return.
The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In most cases, the maximum credit will be available for homes costing $75,000 or more. The credit normally must be repaid over a 15-year period starting the second year after the year the credit is claimed.
The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income. In general, for a married couple filing a joint return the phase-out begins at $150,000 and is completely phased out at $170,000. For other taxpayers, the phase-out range is between $75,000 and $95,000.
Not everyone will qualify for the credit. There are other rules that may impact your eligibility and decision to claim the First-Time Homebuyer Credit. Get all the information at IRS.gov.