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National Home Values
Another year has passed, and while the last 5 of them have been rough for the housing market, we’ve now seen two consecutive quarters with most states showing incremental appreciation. Cause for celebration? Perhaps not, yet this is beginning to look like stabilization and that of course is the first step towards recovery.
What’s working in favor of prospective home buyers?
In a word – Affordability – Since 1963, it has cost an average of approximately 43% of “per capita” income to finance the cost of a median priced home (20% down payment and prevailing 30 year fixed rate mortgage). Right now it’s less than half that cost, and in many areas the monthly housing payments are less than an equivalent rental.
You can lock in your mortgage cost for life – Imagine if you could have locked in the price of gas back in 2001 when it was only about $1.50 per gallon or less? Think about that the next time you’re standing at the pump filling your tank with $4 gas. How smart would you feel if you knew your cost was forever lower? When it comes to a place to live, that same kind of opportunity is staring us in the face right now. Record low prices and record low rates are here now and plentiful. The beauty of a 30 year fixed rate loan is that it’s a 30 year fixed rate loan. If you lock it in now, it will never go up.
There is still uncertainty – yet there is also clarity that comes from knowing where things stand at present such as rates & prices. Above all else, the state of the market doesn’t change the fact that we need a place to live. Choosing to purchase is one of two options. The other one is to rent or to continue living with family if that’s where you are now.
The trouble is – renting amounts to little more than paying your landlord’s mortgage and in the end, there is nothing to show for that. Living at home gets old at the same rate as we do. The day comes when it’s time to leave and there’s never been a less expensive opportunity to do that than now. At some point, rates will rise and so too will prices. Being ahead of or behind that curve is all dependent on the action you choose to take today.
Looking for a new Home in Maine Online
Real Estate Agents in Maine are finding new ways to generate business everyday Online. Studies indicate that over 80% of today’s home buyers visit the Internet long before seeking the professional assistance of a Real Estate Professional.
Below are some popular sites to visit and become familiar with their features and benefits.
Property Listings & More
1) Redfin.com: In addition to listings, this site offers information such as how long a home has been for sale, its last sales price, and its current value. It also provides virtual tours to listed homes.
2) Trulia.com: Like Zillow.com, which offers satellite views and the estimated values of each home, Trulia’s “heat maps” show how hot or cold an area is based on prices, sales, and popularity among its users. Trulia.com also has free tools real estate agents can easily add to their own websites to increase functionality and traffic.
3) Maps.Google.com and Bing.com/maps: For a bird’s-eye view, even 360 degrees in some cases, these amazing map sites offer a virtual perspective of available homes that’s truly hard to beat.
4) Walkscore.com: Is an interesting site that rates any address based on the walking distance of its nearby stores, restaurants, schools, parks, coffee shops etc.
5) SchoolMatters.com: A Standard & Poor’s company, this site offers parents (and potential home buyers) an objective rating of public schools and public school districts by region, including test scores and demographics. GreatSchools.net offers similar info and ratings on private schools based on region.
Government Websites: Government loan programs offer great opportunities for many consumers in many regions across the country, especially first-time buyers and veterans. The following websites are likely one of the first of many sites potential home buyers visit during this process:
1) HUD.Gov is the official website for the U.S. Department of Housing and Urban Development (H.U.D.) This site lists HUD homes and provides information for home buyers, including financing options and home buying programs available through the Federal Housing Administration (FHA).
2) Homeloans.va.gov: This site houses information about government home loan programs specifically for veterans.
Contact me if you think of any more sites I should add to my list. I look forward to developing ways that we can grow our business together.
Are Dual Agency Realtors Acting Ethically?
Click the link here:Are Dual Agency Realtors Acting Ethically?.
Look What’s New for Maine Real Estate Financing!
Happy Friday the 13th,
It’s still a great time to refinance and the purchase market couldn’t be better for a buyer.
These rates are based on no points, rate and term refinance or a purchase, with qualifying income, loan to value and fico scores. **
FHA 30 Year Fixed 4.50%
FHA 15 Year Fixed 3.875%
30 Year Fixed 4.75%
15 Year Fixed 4.125%
Jumbo 15 year Fixed 4.50%
Jumbo 30 year Fixed 5.125%
What’s New?
Here’s a couple of neat things we can do or do better!
With the current economy and a lot of people struggling, some new products have become available to help these borrowers.
1. FHA loans with FICO scores as low as 540.
2. FHA loans with up to 2 mortgage late payments in last 12 months.
3. Conventional loans 620 minimum fico, 1 mortgage late in last 12 months
4. Conventional loans with only 3% down or 97% LTV, NO monthly mortgage insurance
5. Jumbo Loans In house at great rates (see above)
6. We now have Maine State Housing
7. We now do everything under one roof! Appraisal Ordering, Processing, Title, Underwriting and Closing!
For a FREE evaluation contact me today!
-Seth
Distressed Sales Put Pressure on Prices
The national median existing single-family home price was $158,700 in the first quarter, down 4.6 percent from $166,400 in the first quarter of 2010. The median is where half sold for more and half sold for less. Distressed homes typically sold at a discount of about 20 percent, accounted for 39 percent of first quarter sales, up from 36 percent a year earlier.
Lawrence Yun, NAR chief economist,said lower priced homes have seen the best sales performance. “The biggest sales increase has been in the lower price ranges, which are popular with investors and cash buyers,” he said. “The preponderance of sales activity at the lower end is bringing down the median price, so what we’re seeing is the result of a change in the composition of home sales.”
Although sales are slightly below a year ago, the volume of homes sold for $100,000 or less in the first quarter was 8.9 percent higher than the first quarter of 2010, creating a downward skew on the overall median price.
The share of all-cash home purchases rose to 33 percent in the first quarter from 27 percent in the first quarter of 2010.
How is Portland, Maine holding up?
Well ending March 31st 2011.. a total of 102 home and condo transactions transpired compared with 136 in 2010 and thus representing a somewhat significant volume decrease of 25% year over year! Despite the volume drop.. median prices continue to remain strong and actually showed a statistical 8% jump from $206,000 in the first quarter of 2010 compared with $222,000 this previous quarter. Buyers “from away” coupled with still many first time home buyers in the marketplace continue to help keep our market strong overall.
Greater Portland Maine Housing Market Update
Spring is well on its way and thankfully it seems home buyers in Portland Maine have decided to come back with a vengeance. The regional housing market is quite stable, but a harder than normal winter coupled with the traditionally slow Winter season resulted in pretty low transaction volume for the 1st quarter 2011. The entire region taken as a whole was down about 12% whilst Portland itself was off almost 25%. Thankfully however, prices continue to stabilize with the median price for a condo or home in Portland Maine for sale clocking in at 206K in the 1st quarter. Despite this slow 1st quarter.. most signs point to a very strong Spring season here in Maine.
Thanks for reading,
John Herrigel
Green Tree Realty
The sweet spot may soon be over for homeowners.
For the past few years, homes have been the most affordable on record. Low rates and low prices make a wonderful combination. However, this wonder combination may soon be coming to an end. Why do we say this? For one, new home sales are the lowest they have been since the government started keeping records in 1963. While that sounds like bad news, the inventory of new homes for sale is not going up. This inventory is actually one-third of what it was just five years ago. This commentary just appeared in Fortune: “I’m a dirt-road economist who sees what’s happening on the ground, and in 35 years I’ve never seen a shortage of new construction like the one I’m seeing today,” declares Mike Castleman, CEO of Metrostudy. “The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses.” Bottom line, we are not building fast enough to accommodate future demand. Even the ominous shadow inventory which has hung over the market is now shrinking. There were 2.0 million units in various stages of “pre-foreclosure” one year ago and 1.8 million units today, according to CoreLogic. This may not seem a huge drop, however, it is the first move downward in several years.
What makes us think that the demand will arise to continue to shrink the shadow inventory? The population of America is rising. We had shrinkage of household formulation during the recession and this masked the continuing rise in population. Tight credit conditions also turned many potential homeowners into renters, though many are renting houses. However, the news that the economy has now produced 400,000 jobs in the past two months is the continuance of a reversal of this trend. As America goes back to work, household formulation will rise again and there will be significant latent demand uncovered. We understand that two months of data does not guarantee the whole trend reverses itself. We lost about eight million jobs during the recession and the workforce grows by 150,000 monthly. So we have a long way to go, but the trend is moving in the right direction. The key is moving from a vicious to a virtuous cycle. More jobs create demand. Demand creates more jobs. And all this will help loosen credit conditions as a stronger economy will help convince banks to have faith in the average American again. You may be hearing the “bad news” regarding home prices right now–but this is a story that may be changing faster than many analysts have envisioned. Even the Federal Reserve Board is taking notice as a member stated this week that the Fed may be raising rates by the end of this year.
World Events Spark a Short-Term Drop in Home Loan Rates
Is this the last opportunity to purchase or refinance at bargain home prices and rates which are at record lows?
For the past several months, rates have been rising from the historically low levels they reached during the second half of last year. These rates presented a great opportunity for homeowners to refinance their home loan. It was even a better opportunity for those who were interested in purchasing their first home, an investment property or trade up. With bargains available, purchasing made so much sense for those who see real estate as a long-term investment and more importantly a better life for their family.
Rising rates were not bad news for the state of our economy. The rates were rising because the economy is recovering and that is very good news. Evidence of a recovery is all around us. Just last week, CNN indicated that rents are about to rise precipitously and one must ask whether the recovery of the home purchase market will be next….
“Already, rental vacancy rates have dipped below the 10% mark, where they had been lodged for most of the past three years. “The demand for rental housing has already started to increase,” said Peggy Alford, president of Rent.com. “Young people are starting to get rid of their roommates and move out of their parent’s basements.” By 2012, she predicts the vacancy rate will hover at a mere 5%. And with fewer units on the market, prices will explode. Rent hikes have averaged less than 1% a year over the past decade, according to Commerce Department statistics, adjusted for inflation. Now, Alford expects rents to spike 7% or so in each of the next two years…”
World events, especially the tragedy in Japan, have caused a short-term drop in home loan rates just as the economy is heating up. This means that you now can purchase or refinance a home at the lowest rates in months. According to the Freddie Mac Weekly Survey, rates have dropped over 0.25% in the past several weeks. Rates on 15-year fixed home loans are the lowest they have been since December. This lower rate equates to an approximately $500 in annual savings in interest on a $200,000 mortgage.
How long will rates stay low because of this crisis? No one can tell. But if you missed out on refinancing or purchasing last year, this could be your opportunity. Today, those who hesitate may be missing a very historic opportunity. Home affordability is the lowest it has been in our generation. Those who have a lot of money have been picking up bargains for the past year. Why? Those who are successful stay ahead of the trends. These lower rates mean that everyone can take advantage of this occasion to own the home of their dreams or reduce their payment on the home they already own. With gas prices up, wouldn’t the savings help?
Contact me quickly as we expect to be plenty busy this week with those who recognize the significance of the timing.
-Seth
Weak Existing Home Sales and AT&T Buys T-Mobile
MARKET WRAP: The announcement from the Treasury that it will begin selling $10B in Mortgage Backed Securities each month starting this month sent MBS prices lower today. The total amount the Treasury owns is $142B. The news sent MBS and Treasuries considerably lower but they did manage to pare some of those losses by the close of trading. The 4% coupon fell 34bp to end the session at 98.97, despite a weak read on Existing Home sales. A big M&A deal and a somewhat stabilization of Japan’s nuclear reactor problems helped to boost Stock prices today and as money came out of the Bond markets. AT&T announced it will purchase T-Mobile in a deal worth $39B. The Dow surged 178.01 to 12,036.53, the Nasdaq rose 48.42 to 2,692.09 while the S&P 500 gained 19.18 to 1,298. Oil prices rose as the US and western allies launched an air attack on Libya in an effort to oust Gadhafi settling at $102.33/barrel up $1.26. There are no major economic reports due for release tomorrow.
Portland Maine Housing Market Update
In 2010 housing prices and transaction volume stabilized in the real estate markets of Portland ME. The median sales price clocked in at 209K…exactly where it was in 2009. A total of 610 Portland Maine condos and homes sold compared with 586 in 2009. Currently the markets are a bit slower than normal which is not necessarily surprising for this time of year, but winter weather has further stymied activity! However, the general vibe in the housing market is upbeat and as Portland continues to grow and receive a ton of positive nationwide press I suspect we shall see a very strong and healthy market going forward.
