Last Thursday Existing Home Sales for June were reported UP 3.6%, to a 4.89 million annual rate, increasing for the third straight month! Sales are now up 8.9% from the low set in January. Inventories were down 0.7%, to 9.4 months, their lowest reading in more than a year. Even better, the inventory of homes priced under $250,000 is now at a 6 months supply, as reported by CNBC. 29% of all sales were to first-time buyers taking advantage of the up to $8,000 tax credit, set to expire on December 1 this year. Another encouraging sign: distressed sales fell to 31% of the total, indicating that this part of the inventory is getting cleared out as well.
The median price of an existing home also increased in June, to $181,800 – going in the right direction, but still down 15.4% from a year ago. The FHFA home price index increased 0.9% for May, showing slightly higher prices than six months ago. This index tracks prices of homes bought with conforming mortgages. Some observers say average home prices may now be very close to fair value and could edge upward by year end in many areas of the country.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com
Monday, July 27, 2009
New Government Regulations for Loan Disclosures
Recent Federal legislation will impact how quickly loans can now be closed. When completing your purchase agreement, even if you are prepared to move forward and close quickly, a more conservative timeframe of 30-45 days from the time of the contract acceptance might be a more realistic expectation.
HERA (Housing & Economic Recovery Act) was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance.
Under HERA:
No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees (such as appraisal fees) may be collected only after four business days.
Should the APR change by more than .125% on a fixed rate loan or .25% on an ARM, the lender must disclose the new APR and the borrower must have a minimum of 3 business days to review the information before the transaction may proceed.
Items that can trigger re-disclosure requirements include changes to the loan amount, closing date, loan program, or any fees that impact the APR or interest rate.
In cases where re-disclosures documents are sent by mail to the borrower, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.
These new regulations go into effect on July 30th so it is important to plan accordingly to ensure smooth and timely closings.
HERA (Housing & Economic Recovery Act) was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance.
Under HERA:
No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees (such as appraisal fees) may be collected only after four business days.
Should the APR change by more than .125% on a fixed rate loan or .25% on an ARM, the lender must disclose the new APR and the borrower must have a minimum of 3 business days to review the information before the transaction may proceed.
Items that can trigger re-disclosure requirements include changes to the loan amount, closing date, loan program, or any fees that impact the APR or interest rate.
In cases where re-disclosures documents are sent by mail to the borrower, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.
These new regulations go into effect on July 30th so it is important to plan accordingly to ensure smooth and timely closings.
Monday, July 20, 2009
National Real Estate News
We may finally be seeing the end to the home building bust and the start of what some believe will be a sizable recovery in residential construction over the next few years. Friday morning, housing starts for June came in UP 3.6%, at an annual rate of 582,000 units. With volatile multi-family starts down for the month, the gain all came from a 14.4% boost in single family units, which have risen four months in a row, UP 31.7% since February. April and May starts were also revised UP considerably.
June Building Permits were UP 8.7%, at an annual rate of 563,000 units, increasing for the second straight month, resulting in a 13.1% boost since April. Although there are still excess inventories, experts feel the rate of home building had been so low, inventories will continue to fall rapidly even as new building activity picks up.
The week began with a report from Freddie Mac saying they believe home sales bottomed in Q1 at a 4.46 million annual rate. They project sales will grow every quarter, to an annual rate of 5.85 million by Q4 next year. Their turnaround evidence includes nine straight months of sales growth for Florida and 14 straight months for California. Admitting that home price bottoming tends to lag, the report did say they saw signs of "the seeds of turnaround" in prices as well. All good news.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657
June Building Permits were UP 8.7%, at an annual rate of 563,000 units, increasing for the second straight month, resulting in a 13.1% boost since April. Although there are still excess inventories, experts feel the rate of home building had been so low, inventories will continue to fall rapidly even as new building activity picks up.
The week began with a report from Freddie Mac saying they believe home sales bottomed in Q1 at a 4.46 million annual rate. They project sales will grow every quarter, to an annual rate of 5.85 million by Q4 next year. Their turnaround evidence includes nine straight months of sales growth for Florida and 14 straight months for California. Admitting that home price bottoming tends to lag, the report did say they saw signs of "the seeds of turnaround" in prices as well. All good news.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657
Sunday, July 19, 2009
Close Early to Avoid Thanksgiving Rush when $8,000 Tax Credit Expires
November 30th is the drop dead date for closing purchases that qualify for the First Time Homebuyer Tax Credit. Scheduling closing dates in November, however, will be a real challenge as buyers must navigate around all of the County furlough closure days and holidays before the deadline. Below is a list of County closures to keep in mind.
King County’s recording department will be closed on the 25th (furlough day), 26th and 27th for the Thanksgiving Holiday, and the weekend eats up the 28th and 29th.
Snohomish County’s recording department closes early on the 25th (purchase documents need to be at excise desk no later than 1:30 PM), closed the 26th and 27th for the Thanksgiving Holiday and closed for the weekend of the 28th and 29th.
Pierce, Kitsap and Mason County recording departments will be closed for Thanksgiving on the 26th and 27th while enjoying the weekend for the 28th and 29th.
You can bet that November 30th will be absolutely nuts with people trying to beat the tax credit deadline! Our advice is to close before November if at all possible. If you must close during the month of November do so early or near the middle of the month to avoid any "Thanksgiving indigestion".
King County’s recording department will be closed on the 25th (furlough day), 26th and 27th for the Thanksgiving Holiday, and the weekend eats up the 28th and 29th.
Snohomish County’s recording department closes early on the 25th (purchase documents need to be at excise desk no later than 1:30 PM), closed the 26th and 27th for the Thanksgiving Holiday and closed for the weekend of the 28th and 29th.
Pierce, Kitsap and Mason County recording departments will be closed for Thanksgiving on the 26th and 27th while enjoying the weekend for the 28th and 29th.
You can bet that November 30th will be absolutely nuts with people trying to beat the tax credit deadline! Our advice is to close before November if at all possible. If you must close during the month of November do so early or near the middle of the month to avoid any "Thanksgiving indigestion".
Friday, July 10, 2009
Rates Are Dropping Again!
After a rather unexpected rise in mortgage rates over the past several weeks we are starting to see rates inch back downward. Worse than expected economic news is the driving force for the lower interest rates. Furthermore, consumer confidence was released this morning and was much lower than anticipated, indicating consumers continue to feel concerned about the economy.
Most experts agree that we are currently in the bottoming process of the recession. It is unknown how long it will take to bottom out and when we will start seeing growth in the economy.
What we do know is that right now represents one of the best opportunities in our local housing market in history. First time homebuyers are starting to step up and take notice as evidenced by increasing home sales in the past 60 days.
With time running out on the first time homebuyer tax credit, and uncertainty about how long interest rates will remain at these low levels, now is the time to get into the market!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Most experts agree that we are currently in the bottoming process of the recession. It is unknown how long it will take to bottom out and when we will start seeing growth in the economy.
What we do know is that right now represents one of the best opportunities in our local housing market in history. First time homebuyers are starting to step up and take notice as evidenced by increasing home sales in the past 60 days.
With time running out on the first time homebuyer tax credit, and uncertainty about how long interest rates will remain at these low levels, now is the time to get into the market!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Tuesday, July 7, 2009
“Aware and prepared” buyers help boost Western Washington home sales during June
"Encouraging" seemed to be a common response from brokers upon reviewing the June activity summaries from Northwest Multiple Listing Service (NWMLS). The report shows inventory continues to shrink, pending sales increased more than 19.5% from a year ago, and median prices system-wide are up 4.4% since January.
"The positive movement in our real estate market year over year is really very encouraging," remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, "In anyone's book, that's substantial improvement."
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. "It's encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago," he stated. While the median home price is down approximately 10% from a year ago, median prices have flattened over the past 7 to 9 months, he noted. "This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges," Scott believes.
Pending sales (offers made and accepted) in the four-county Puget Sound region (King, Kitsap, Pierce and Snohomish) rose more than 25 percent in June compared to the same month a year ago.
"There is a definite upsurge in sales activity, from a pending sales perspective and a "lookers becoming buyers" perspective," observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.
Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act. He said the “word” on the $8,000 tax credit has finally reached the streets, as more buyers come in aware, prepared and excited about taking advantage while the advantage is available. (The federal tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence before December 1, 2009.)
Data show some neighborhoods are rebounding faster than others, Sparks observed. "In what appears to be a transitional market, accurate neighborhood information is more critical than ever, so buyers, sellers and their agents really need to do their homework" he emphasized.
Short sales continue to be a drag on prices and source of frustration for brokers and agents, according to Beeson. A National Association of REALTORS® analysis revealed that distressed homes typically sell for 20% less than the normal market price, thereby drawing down the overall median price.
Many pending sales are yet to close because of short sales, which Beeson estimates take twice as long to close as a more conventional transaction. "Many pendings have to be resold because the first buyer tires of waiting for the lender's response."
Beeson also notes the next challenge will be reactions to the next round of foreclosed properties that are expected to come on the market in the next six months. He said there could be another dip in prices, but adds, "I think we've been through the worst."
Right now is a great time to buy. Very rarely do we get the combination of lower prices, high amounts of inventory, anxious sellers willing to deal, and interest rates that are at approximately 50 year lows. This is the very best time to buy we’ve had in years!
"The positive movement in our real estate market year over year is really very encouraging," remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, "In anyone's book, that's substantial improvement."
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. "It's encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago," he stated. While the median home price is down approximately 10% from a year ago, median prices have flattened over the past 7 to 9 months, he noted. "This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges," Scott believes.
Pending sales (offers made and accepted) in the four-county Puget Sound region (King, Kitsap, Pierce and Snohomish) rose more than 25 percent in June compared to the same month a year ago.
"There is a definite upsurge in sales activity, from a pending sales perspective and a "lookers becoming buyers" perspective," observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.
Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act. He said the “word” on the $8,000 tax credit has finally reached the streets, as more buyers come in aware, prepared and excited about taking advantage while the advantage is available. (The federal tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence before December 1, 2009.)
Data show some neighborhoods are rebounding faster than others, Sparks observed. "In what appears to be a transitional market, accurate neighborhood information is more critical than ever, so buyers, sellers and their agents really need to do their homework" he emphasized.
Short sales continue to be a drag on prices and source of frustration for brokers and agents, according to Beeson. A National Association of REALTORS® analysis revealed that distressed homes typically sell for 20% less than the normal market price, thereby drawing down the overall median price.
Many pending sales are yet to close because of short sales, which Beeson estimates take twice as long to close as a more conventional transaction. "Many pendings have to be resold because the first buyer tires of waiting for the lender's response."
Beeson also notes the next challenge will be reactions to the next round of foreclosed properties that are expected to come on the market in the next six months. He said there could be another dip in prices, but adds, "I think we've been through the worst."
Right now is a great time to buy. Very rarely do we get the combination of lower prices, high amounts of inventory, anxious sellers willing to deal, and interest rates that are at approximately 50 year lows. This is the very best time to buy we’ve had in years!
Snohomish County Statistics - June, 2009
Current Residential & Condo listings - 5,627 (down 21.55% from last year)
New listings taken this month - 1,730
Pending sales this month - 1,191 (up 30.16% from last year)
Percent of listings that sold this month - 21.17%
Median closed sales price - June ‘08, $329,450
Median closed sales price - June ‘09, $299,000
Rate of appreciation = -9.24%
~ Courtesy of NWMLS
New listings taken this month - 1,730
Pending sales this month - 1,191 (up 30.16% from last year)
Percent of listings that sold this month - 21.17%
Median closed sales price - June ‘08, $329,450
Median closed sales price - June ‘09, $299,000
Rate of appreciation = -9.24%
~ Courtesy of NWMLS
King County Statistics - June, 2009
Current Residential & Condo listings - 13,351 (down 15.67% from last year)
New listings taken this month - 4,373
Pending sales this month - 3,042 (up 19.34% from last year)
Percent of listings that sold this month - 22.79%
Median closed sales price - June ‘08, $400,000
Median closed sales price - June ‘09, $363,116
Rate of appreciation = -9.22%
~ Courtesy of NWMLS
New listings taken this month - 4,373
Pending sales this month - 3,042 (up 19.34% from last year)
Percent of listings that sold this month - 22.79%
Median closed sales price - June ‘08, $400,000
Median closed sales price - June ‘09, $363,116
Rate of appreciation = -9.22%
~ Courtesy of NWMLS
Eastside Statistics - June, 2009
Current Residential & Condo listings - 5,144 (down 7.83% from last year)
New listings taken this month - 1,466
Pending sales this month - 942 (up 13.63% from last year)
Percent of listings that sold this month - 18.31%
Median closed sales price - June ‘08, $539,000
Median closed sales price - June ‘09, $476,000
Rate of appreciation = -11.69%
~ Courtesy of NWMLS
New listings taken this month - 1,466
Pending sales this month - 942 (up 13.63% from last year)
Percent of listings that sold this month - 18.31%
Median closed sales price - June ‘08, $539,000
Median closed sales price - June ‘09, $476,000
Rate of appreciation = -11.69%
~ Courtesy of NWMLS
National real estate highlights from last week
The Pending Home Sales index came in last Wednesday a blip UP for May over April. This was the first time we had four consecutive monthly gains in the National Association of Realtors index since October 2004. And May's number was up 6.7% over a year ago.
Also on Wednesday, the government announced that homeowners who are underwater up to 125% can refinance under the Obama administration's Home Affordable Refinance Program (HARP). They have to be current with payments and the loan must be owned or guaranteed by Fannie Mae or Freddie Mac. They're boosting the program's loan-to-value (LTV) ceiling from 105% to 125% so more homeowners can take advantage of lower mortgage rates. The idea is to have HARP prevent more foreclosures to help stabilize the market. Details are available at www.makinghomeaffordable.gov.
Another sign of hope came last week from the S&P Case-Shiller home price index. We feel this index is negatively biased in tough times, yet April's reading showed the third straight month of DECREASING home price declines. There were even HOME PRICE INCREASES in some of the 20 US cities included in the index. Moody's Economy.com chief economist Mark Zandi chimed in: "The long and painful crash in the housing market is coming to an end."
~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com
Also on Wednesday, the government announced that homeowners who are underwater up to 125% can refinance under the Obama administration's Home Affordable Refinance Program (HARP). They have to be current with payments and the loan must be owned or guaranteed by Fannie Mae or Freddie Mac. They're boosting the program's loan-to-value (LTV) ceiling from 105% to 125% so more homeowners can take advantage of lower mortgage rates. The idea is to have HARP prevent more foreclosures to help stabilize the market. Details are available at www.makinghomeaffordable.gov.
Another sign of hope came last week from the S&P Case-Shiller home price index. We feel this index is negatively biased in tough times, yet April's reading showed the third straight month of DECREASING home price declines. There were even HOME PRICE INCREASES in some of the 20 US cities included in the index. Moody's Economy.com chief economist Mark Zandi chimed in: "The long and painful crash in the housing market is coming to an end."
~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com
Wednesday, July 1, 2009
National Real Estate News...
We continued to have encouraging housing news, starting with Existing Home Sales up 2.4% for May to a 4.77 million annual rate. This was the third month in a row of increased sales, which are now 6.2% above their January low. And the percent increase for the last two months is the largest since April 2004. The existing homes supply decreased to 9.6 months from April's 10.1 months. The median price of an existing home INCREASED to $173,000.
Next we saw new home sales at a 342,000 annual rate for May, with the supply dropping to 10.2 months from April's 10.4 months. New home inventories are now at 292,000, down 49% from their mid-2006 peak and at their lowest level since 2001. Sales were down slightly for the month, but still above their January low. The 111,000 new homes for sale still under construction are at their lowest level since 1970. The 135,000 completed new homes for sale are the lowest level since 2006. The Mortgage Bankers Association reported purchase loan applications UP 7.3%!
Last week we reported the housing market needs to get back to 1.6 million starts a year just to meet knock-downs and population growth. A new Harvard University report heartily agrees. It says there will be millions more echo boomers than there were boomers who first grew the housing market. The report projects household growth between 12.5 and 14.8 million in the next 10 years! The report also notes that price declines and low interest rates have brought affordability to many housing markets.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.893.5723, CChrobak@GolfSavingsBank.com
Next we saw new home sales at a 342,000 annual rate for May, with the supply dropping to 10.2 months from April's 10.4 months. New home inventories are now at 292,000, down 49% from their mid-2006 peak and at their lowest level since 2001. Sales were down slightly for the month, but still above their January low. The 111,000 new homes for sale still under construction are at their lowest level since 1970. The 135,000 completed new homes for sale are the lowest level since 2006. The Mortgage Bankers Association reported purchase loan applications UP 7.3%!
Last week we reported the housing market needs to get back to 1.6 million starts a year just to meet knock-downs and population growth. A new Harvard University report heartily agrees. It says there will be millions more echo boomers than there were boomers who first grew the housing market. The report projects household growth between 12.5 and 14.8 million in the next 10 years! The report also notes that price declines and low interest rates have brought affordability to many housing markets.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.893.5723, CChrobak@GolfSavingsBank.com
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