The Puget Sound region continues to show it's strength for long-term real estate appreciation. Over a five year period, FHFA statistics ranks the Seattle-Bellevue-Everett area #2 amongst the top 25 metropolitan areas in the country (based on population). Over an eighteen year period, only regions in New York and Denver surpass the Seattle areas #4 ranking for retaining property value.
These long term gains become more impressive given that the Seattle area real estate prices lost nearly 12% over the last year (ranks 20th) and close to 3% since the second quarter of 2009 (also ranks 20th). These statistics suggest that the Puget Sound area is settling close to it's long term real estate values and now could be the best time to jump in the market.
The current tax credits offered by the Federal Government can protect against slight dips in appreciation as this area finds it's equilibrium. Using a $250,000 home as an example, the $6,500 tax credit for repeat home buyers represents a 2.6% hedge against further depreciation. A first time home buyer credit calculates to 3.2%. Combining these tax credits with historically low interest rates creates a pretty good argument for those considering a home purchase to get in the game!
~ Courtesy of The Talon Group - Escrow & Title Services
Monday, November 30, 2009
National Real Estate News
The economic reports before Thanksgiving were packed with housing market data and, guess what, they were all extremely positive! Monday saw Existing Home Sales UP 10.1% to an annual rate of 6.10 million, the highest since February 2007. Sales are now UP 20% in the past two months and UP 36% from their January lows. Even better, the supply of existing homes was down to just 7 months, with inventories down to 3.57 million, the lowest level in almost three years. This puts existing homes very close to the 6-month supply level of a healthy housing market. The Case-Shiller 20-City Composite Home Price Index rose 0.3% in September. The index also showed its second consecutive quarterly increase, UP 3.1% for Q3, returning to August 2003 levels.
Wednesday, New single-family Home Sales were UP 6.2% in October to an annual rate of 430,000 units. New Home Sales are now UP 30.7% over their January low. The unsold supply of new homes dropped to 6.7 months as of October, with inventories at 239,000, 58.2% down from their mid-2006 peak and at their lowest level since mid-1971. The median price was down only 0.5% from a year ago and average price down just 4.7%.
Freddie Mac reported mortgage rates down for the fourth straight week, reaching historic lows well below 5%, with an average 0.7 point, for prime borrowers with 20% down payments. Freddie Mac's chief economist said, "Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year's peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage."
~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com
Wednesday, New single-family Home Sales were UP 6.2% in October to an annual rate of 430,000 units. New Home Sales are now UP 30.7% over their January low. The unsold supply of new homes dropped to 6.7 months as of October, with inventories at 239,000, 58.2% down from their mid-2006 peak and at their lowest level since mid-1971. The median price was down only 0.5% from a year ago and average price down just 4.7%.
Freddie Mac reported mortgage rates down for the fourth straight week, reaching historic lows well below 5%, with an average 0.7 point, for prime borrowers with 20% down payments. Freddie Mac's chief economist said, "Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year's peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage."
~ Courtesy of Chuck Chrobak, Golf Savings Bank, 425.330.9657, CChrobak@GolfSavingsBank.com
Sunday, November 22, 2009
Tax Credit Expands Home Buyer, Economic Opportunities; On Pace to Help 70% of Potential Home Buyers
The National Association of Home Builders (NAHB) is spreading the word to consumers about an important new law that extends and expands an attractive tax incentive for potential home buyers. The Worker, Homeownership, and Business Assistance Act of 2009, signed into law by President Obama on Nov. 6, extends the deadline for the first-time home buyer tax credit and gives a larger group of home buyers the chance to take advantage of this government program.
“The tax credit has already proven to be an effective means of boosting economic activity,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We hope that the government’s action to enhance it will have the intended additional stimulative effect that will help get housing and the economy back on solid ground.”
The new law extends the $8,000 first-time home buyer credit through April 30, 2010, giving buyers who have signed a sales contract by that deadline until June 30 to close their deal. A new credit of up to $6,500 was created for repeat home buyers who buy a principal residence if they have been residing in the home they currently own (or previously owned) for five consecutive years out of the eight years preceding the purchase of the new home.
“It’s not just a first-time buyer tax credit anymore,” Robson said. “Move-up buyers, move-down buyers, and others who have previously owned a home can now qualify as well. In fact, close to 70 percent of all potential home buyers should now qualify for some form of the credit.”
Income limits for eligible buyers have also been increased to allow more consumers to qualify, particularly those in markets with a higher cost of living. Now single taxpayers with incomes up to $125,000 and married couples earning up to $225,000 may be eligible. Partial credits are available to home buyers who earn up to $20,000 more than the limits.
A leading source of consumer information on the tax credit is NAHB’s website at www.federalhousingtaxcredit.com, which saw a huge increase in visits in the days after the new law was signed. It provides basic information about the first-time and repeat buyer credits, detailed question and answer sections, and links to additional home-buying resources for consumers.
“The federalhousingtaxcredit.com website had more than 70,000 visits on the Monday after the President enacted the law,” said Robson. “Since the site was established in mid-2008, there have been more than 6 million visits by people seeking information about the home buyer tax credits. That tells you how hungry consumers are for easy-to-understand information on this great opportunity that has been opened to them.”
NAHB estimates that the home buyer tax credit will create 211,000 jobs and generate 180,000 additional home sales in the coming year. It is also expected to generate $9.6 billion in wage income and $6.9 billion in federal, state and local taxes.
~ Courtesy of RISMedia
Rates Are Going To Go UP!
For one of the first times in history, we have the clarity to see that right now likely marks the bottom of mortgage interest rates. We typically never know we have hit the bottom until rates have gone back up. Why the clarity now?
Mortgage rates were hovering in the 6% - 6.5% range a year ago. When the Fed launched its program of purchasing mortgage-backed securities in the first quarter of 2009, we saw mortgage rates suddenly dip to around 5%.
The Fed is now in the process of backing out of buying additional mortgage-backed securities. They have begun to lessen the quantities purchased, and will be completely finished purchasing by the end of first quarter 2010. Most experts believe we will start to see a gradual increase in rates between now and March, with rates ultimately settling back in the 6% - 6.5% range they were in before the Fed stimulus program.
What does this mean in terms of buying power? For a client who can afford a payment of $2,150 per month based on a rate of 5%, this would provide them a loan amount of $400,000. At 6.5%, this same payment would get them a loan of $340,000…a $60K difference!
We may never see rates this low again in our lifetimes! Now is the time to act before rates go UP!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Mortgage rates were hovering in the 6% - 6.5% range a year ago. When the Fed launched its program of purchasing mortgage-backed securities in the first quarter of 2009, we saw mortgage rates suddenly dip to around 5%.
The Fed is now in the process of backing out of buying additional mortgage-backed securities. They have begun to lessen the quantities purchased, and will be completely finished purchasing by the end of first quarter 2010. Most experts believe we will start to see a gradual increase in rates between now and March, with rates ultimately settling back in the 6% - 6.5% range they were in before the Fed stimulus program.
What does this mean in terms of buying power? For a client who can afford a payment of $2,150 per month based on a rate of 5%, this would provide them a loan amount of $400,000. At 6.5%, this same payment would get them a loan of $340,000…a $60K difference!
We may never see rates this low again in our lifetimes! Now is the time to act before rates go UP!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Saturday, November 14, 2009
Yun: 2010 Sales to Rise 15 Percent
Home sales will increase 15 percent to about 5.7 million units, NAR Chief Economist Lawrence Yun told a packed room of REALTORS® today in a residential economic update at the 2009 NAR Conference & Expo.
Yun credited the home buyer tax credit with unleashing sales on the lower-end of the housing market this year, bringing up to 400,000 first-time buyers into the market who wouldn't have bought otherwise. That influx tightened inventories of starter homes, shored up prices, and helped reduce households' fear over continuing price drops.
This virtuous cycle will continue now that the federal government has extended the credit to mid-2010 and expanded it to make a smaller credit available to repeat buyers and to households with higher incomes. “The key is stabilizing prices and preserving household wealth,” he says.
Yun predicts the supply of homes to stabilize at the historic norm of six to seven months. Homes above $500,000 will remain elevated in the near-term, but that weakness will be offset by a hefty drop in starter-home inventories, which are running at about a five months supply.
The tightening inventory at all price points will help improve market performance by bringing supply into better balance with demand, but the added sales, particularly on the higher end, will also increase the number and quality of the market comparables used by appraisers to assign valuations. Once appraisals improve, foreclosures will ease, blunting their drag on the market and making it less likely that Fannie Mae, Freddie Mac, and even FHA will need help from the taxpayer.
“Then we’ll be set for a durable economic expansion,” he said.
New-home sales, which comprise about 10 percent of the market, will continue at suppressed levels--about 550,000 units, down from more than a million during the boom--mainly because builders have scaled projects way back, in part because financing isn't available.
"Weakness in new-home sales shouldn’t be viewed as tepid demand," he said.
Even under the most positive economic scenario, unemployment will remain elevated through 2010. Yun is predicting unemployment to stay near double-digits going into 2011, qualifying this recession, as some economists have, as the "Great Recession.”
For the longer term, the huge deficit run up by the federal government to shore up the economy remains the big question mark. Although the deficit is expected to improve each of the next three years, it will remain at historic highs. Unless the federal government releases a credible plan for shrinking it, investors will start to balk and interest rates will need to rise to bring them back. Should inflation be the result, the housing recovery will be set back.
Source: Robert Freedman, REALTOR® magazine
Yun credited the home buyer tax credit with unleashing sales on the lower-end of the housing market this year, bringing up to 400,000 first-time buyers into the market who wouldn't have bought otherwise. That influx tightened inventories of starter homes, shored up prices, and helped reduce households' fear over continuing price drops.
This virtuous cycle will continue now that the federal government has extended the credit to mid-2010 and expanded it to make a smaller credit available to repeat buyers and to households with higher incomes. “The key is stabilizing prices and preserving household wealth,” he says.
Yun predicts the supply of homes to stabilize at the historic norm of six to seven months. Homes above $500,000 will remain elevated in the near-term, but that weakness will be offset by a hefty drop in starter-home inventories, which are running at about a five months supply.
The tightening inventory at all price points will help improve market performance by bringing supply into better balance with demand, but the added sales, particularly on the higher end, will also increase the number and quality of the market comparables used by appraisers to assign valuations. Once appraisals improve, foreclosures will ease, blunting their drag on the market and making it less likely that Fannie Mae, Freddie Mac, and even FHA will need help from the taxpayer.
“Then we’ll be set for a durable economic expansion,” he said.
New-home sales, which comprise about 10 percent of the market, will continue at suppressed levels--about 550,000 units, down from more than a million during the boom--mainly because builders have scaled projects way back, in part because financing isn't available.
"Weakness in new-home sales shouldn’t be viewed as tepid demand," he said.
Even under the most positive economic scenario, unemployment will remain elevated through 2010. Yun is predicting unemployment to stay near double-digits going into 2011, qualifying this recession, as some economists have, as the "Great Recession.”
For the longer term, the huge deficit run up by the federal government to shore up the economy remains the big question mark. Although the deficit is expected to improve each of the next three years, it will remain at historic highs. Unless the federal government releases a credible plan for shrinking it, investors will start to balk and interest rates will need to rise to bring them back. Should inflation be the result, the housing recovery will be set back.
Source: Robert Freedman, REALTOR® magazine
Homebuyer Tax Credit Extension and Expansion
On November 6, 2009 President Obama signed a bill extending the First Time Homebuyer Tax Credit into the first half of 2010. Additionally, the bill has provisions to offer credits to current homeowners purchasing new homes.
The “First Time Homebuyer Tax Credit” remains $8,000, with income restrictions being raised to $125,000 for single buyers and $225,000 for married couples. First Time Homebuyers are defined as those who have not owned a home within the last 3 years.
The new “Current Homeowners Credit” grants a tax credit of up to $6,500 to current homeowners purchasing a new primary residence. Current Homeowners are defined as those who have owned a home for five of the previous eight years. The income restrictions are the same for this program as the “First Time Homebuyer Tax Credit”.
To be eligible for the credits borrowers must have a signed purchase agreement by April 30, 2010 and must close by June 30, 2010.
For those in our armed forces stationed outside the United States for 90 days from January 1st, 2009 and April 30th, 2010, their eligibility will be extended until June 30th, 2011.
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
The “First Time Homebuyer Tax Credit” remains $8,000, with income restrictions being raised to $125,000 for single buyers and $225,000 for married couples. First Time Homebuyers are defined as those who have not owned a home within the last 3 years.
The new “Current Homeowners Credit” grants a tax credit of up to $6,500 to current homeowners purchasing a new primary residence. Current Homeowners are defined as those who have owned a home for five of the previous eight years. The income restrictions are the same for this program as the “First Time Homebuyer Tax Credit”.
To be eligible for the credits borrowers must have a signed purchase agreement by April 30, 2010 and must close by June 30, 2010.
For those in our armed forces stationed outside the United States for 90 days from January 1st, 2009 and April 30th, 2010, their eligibility will be extended until June 30th, 2011.
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Tuesday, November 10, 2009
Tax credit spurs big surge in Western Washington home sales
Credit the tax credit and its impending expiration deadline for a surge in home sales last month. Members of Northwest Multiple Listing Service reported a 63 percent jump in pending sales during October compared to the same month a year ago, a gain many brokers attribute to a tax credit that is set to expire at midnight on Nov. 30.
The new figures from Northwest MLS show continued signs of some stability in the market and improving consumer confidence. Inventory is at its lowest level since December 2008, and the year-over-year price decline, at 7.2 percent area-wide, is the smallest drop since June 2008.
For the four-county Puget Sound area (King, Snohomish, Pierce and Kitsap), inventory has shrunk 20 percent since twelve months ago. The selection of single family homes (excluding condominiums) in the four-county area is down 22 percent.
Northwest MLS directors who commented on October activity support extension of the tax credit that allows first-time home buyers who purchase a principal residence between Jan. 1, 2009 and Dec. 1, 2009 a credit of up to $8,000.
"I believe the $8,000 homebuyer credit set off a great chain reaction. The first-time homebuyer creates a move-up buyer," explained MLS director Meribeth Hutchings, the broker/owner of Windermere Real Estate/Lake Stevens. "The tax credit was the engine that started driving the market again," she remarked, adding, "It was a great October; hopefully the tax credit extension will be approved and the market will stay strong through the winter."
NWMLS director Kathy Estey, managing broker at John L. Scott's Bellevue office, cites a combination of factors for boosting activity, including the tax credit, stabilizing prices for entry level homes and diminished inventory. "Sales are not just fueled by the first-time buyer stimulus," she said, noting it prompted procrastinators to jump into the market and others to bail out of short sales that had not yet been accepted by lenders, opting instead to purchase homes that are not in the "distressed" categories.
"The fourth quarter is one of the best times for buyers, so we expect the positive activity to continue," Estey remarked, noting sales in her office were up again in October, "a month when we expect to see a slight decline."
Estey credits soft prices for contributing to the uptick in sales for homes priced at a million dollars or more. Her office participated in 10 sales priced at over a million dollars last month, calling that volume a "great improvement" from earlier in the year. In King County, 86 homes and condos fetched prices of $1 million or more, up from the year-ago total of 62 such transactions, according to NWMLS data.
"The compression of prices has created great values in that price range, the stock market has replaced much of what was previously lost, and there is reasonable financing for jumbo loans (20 percent or more down and good credit required)," Estey observed, while voicing hope for an extension of the tax credit.
The new figures from Northwest MLS show continued signs of some stability in the market and improving consumer confidence. Inventory is at its lowest level since December 2008, and the year-over-year price decline, at 7.2 percent area-wide, is the smallest drop since June 2008.
For the four-county Puget Sound area (King, Snohomish, Pierce and Kitsap), inventory has shrunk 20 percent since twelve months ago. The selection of single family homes (excluding condominiums) in the four-county area is down 22 percent.
Northwest MLS directors who commented on October activity support extension of the tax credit that allows first-time home buyers who purchase a principal residence between Jan. 1, 2009 and Dec. 1, 2009 a credit of up to $8,000.
"I believe the $8,000 homebuyer credit set off a great chain reaction. The first-time homebuyer creates a move-up buyer," explained MLS director Meribeth Hutchings, the broker/owner of Windermere Real Estate/Lake Stevens. "The tax credit was the engine that started driving the market again," she remarked, adding, "It was a great October; hopefully the tax credit extension will be approved and the market will stay strong through the winter."
NWMLS director Kathy Estey, managing broker at John L. Scott's Bellevue office, cites a combination of factors for boosting activity, including the tax credit, stabilizing prices for entry level homes and diminished inventory. "Sales are not just fueled by the first-time buyer stimulus," she said, noting it prompted procrastinators to jump into the market and others to bail out of short sales that had not yet been accepted by lenders, opting instead to purchase homes that are not in the "distressed" categories.
"The fourth quarter is one of the best times for buyers, so we expect the positive activity to continue," Estey remarked, noting sales in her office were up again in October, "a month when we expect to see a slight decline."
Estey credits soft prices for contributing to the uptick in sales for homes priced at a million dollars or more. Her office participated in 10 sales priced at over a million dollars last month, calling that volume a "great improvement" from earlier in the year. In King County, 86 homes and condos fetched prices of $1 million or more, up from the year-ago total of 62 such transactions, according to NWMLS data.
"The compression of prices has created great values in that price range, the stock market has replaced much of what was previously lost, and there is reasonable financing for jumbo loans (20 percent or more down and good credit required)," Estey observed, while voicing hope for an extension of the tax credit.
Eastside Statistics - October, 2009
Current Residential & Condo listings - 4,441 (down 16.19% from last year)
New listings taken this month - 1,141
Pending sales this month - 926 (up 95.77% from last year)
Percent of listings that sold this month - 20.85%
Median closed sales price - Oct. ‘08, $465,000
Median closed sales price - Oct. ‘09, $433,750
Rate of appreciation = -6.72%
~ Courtesy of NWMLS
New listings taken this month - 1,141
Pending sales this month - 926 (up 95.77% from last year)
Percent of listings that sold this month - 20.85%
Median closed sales price - Oct. ‘08, $465,000
Median closed sales price - Oct. ‘09, $433,750
Rate of appreciation = -6.72%
~ Courtesy of NWMLS
King County Statistics - October, 2009
Current Residential & Condo listings - 12,321 (down 15.93% from last year)
New listings taken this month - 3,764
Pending sales this month - 2,951 (up 70.87% from last year)
Percent of listings that sold this month - 23.95%
Median closed sales price - Oct. ‘08, $358,500
Median closed sales price - Oct. ‘09, $349,950
Rate of appreciation = -2.38%
~ Courtesy of NWMLS
New listings taken this month - 3,764
Pending sales this month - 2,951 (up 70.87% from last year)
Percent of listings that sold this month - 23.95%
Median closed sales price - Oct. ‘08, $358,500
Median closed sales price - Oct. ‘09, $349,950
Rate of appreciation = -2.38%
~ Courtesy of NWMLS
Snohomish County Statistics - October, 2009
Current Residential & Condo listings - 5,171 (down 23.51% from last year)
New listings taken this month - 1,474
Pending sales this month - 1,197 (up 91.21% from last year)
Percent of listings that sold this month - 23.15%
Median closed sales price - Oct. ‘08, $317,000
Median closed sales price - Oct. ‘09, $280,000
Rate of appreciation = -11.67%
~ Courtesy of NWMLS
New listings taken this month - 1,474
Pending sales this month - 1,197 (up 91.21% from last year)
Percent of listings that sold this month - 23.15%
Median closed sales price - Oct. ‘08, $317,000
Median closed sales price - Oct. ‘09, $280,000
Rate of appreciation = -11.67%
~ Courtesy of NWMLS
Monday, November 9, 2009
National Real Estate News - Homebuyer Tax Credit Extended!
Big news for the housing market came Friday when the President signed a bill extending and broadening tax credits for homebuyers. Major points were first reported in an Inside Lending Bulletin last Thursday. The tax credits apply to contracts signed by April 30, 2010, that close by June 30. Income limits for eligibility have been increased to $125,000 per year for individuals and up to $225,000 per year for couples. Credits up to $8,000 continue for first-time buyers but there is now a $6,500 tax credit for buyers who've owned their current home at least five of the last eight years. However, homes selling for more than $800,000 are not eligible.
The week began with September Pending Home Sales coming in UP for the eighth month in a row. The National Association of Realtors index was UP 6.1% for the month, and UP 21.2% over September a year ago! The index hit 110.1, with 100 equaling the average level of sales contracts in 2001, the first year measured by the index.
And, yes, the Mortgage Bankers Association once again reported the average contract interest rate for 30-year fixed-rate mortgages dropped. This time it hit 4.97% with points sinking to 1.01 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.
The week began with September Pending Home Sales coming in UP for the eighth month in a row. The National Association of Realtors index was UP 6.1% for the month, and UP 21.2% over September a year ago! The index hit 110.1, with 100 equaling the average level of sales contracts in 2001, the first year measured by the index.
And, yes, the Mortgage Bankers Association once again reported the average contract interest rate for 30-year fixed-rate mortgages dropped. This time it hit 4.97% with points sinking to 1.01 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.
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