Houston home prices have momentum. According to the Houston Association of Realtors' (HAR) most recent press release, this March set records for average and median home prices in Houston. In terms of number of homes, March sales outpaced March 2005 sales and the previous month's sales.
Inventories have ticked up, as HAR reports 5.3 months of inventory at the end of March vs. the 5.2 months of inventory at the end of February. As noted in the press release, inventory is up by 1,100 homes in February, but down by 1,200 homes since March 2005.
Houston real estate transactions numbered 8,015, a 22% increase over March 2005 transactions.
All Categories: March 2005 March 2006 Percent Change
Total property sales 6,548 8,015 +22.4%
Total dollar volume $1,114,378,189 $1,475,233,100 +32.4%
Average single-family $178,519 $193,640 +8.5%
sales price
Median single-family $136,000 $143,310 +5.4%
sales price
Active listings 43,152 41,948 -2.8%
Pending sales 5,118 5,506 +7.6%
Months inventory* 6.0 5.3 -12.3%
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
Friday, April 28, 2006
Tuesday, April 11, 2006
NAR Asks Home Owners: If You Sell It, Will Buyers Come?
WASHINGTON, D.C. – As spring approaches, home buyers’ and sellers’ thoughts turn to the real estate market. With the premiere of television advertising spots titled, “Don’t Try This at Home,” the National Association of Realtors® encourages home sellers to protect what could be their largest investment by enlisting the help of a professional.
“Selling a home is like climbing Mount Everest,” said Thomas M. Stevens, NAR president and senior vice president of NRT Inc., from Vienna, Va. “If you don’t prepare correctly, you’ll never achieve your goal. Getting a signed contract is like reaching the peak, but that’s only half the journey. Many things can happen on the way back down the mountain. Savvy sellers know to hire a Realtor® to protect their interests and guide them through.”
Home owners who try to sell their home without professional help must overcome a number of hurdles. As mentioned in the TV spots, the obstacles include making the appropriate disclosures, preparing the home for sale, pricing the home appropriately for a dynamic market and, most importantly, attracting qualified, motivated buyers. According to the 2005 NAR Profile of Home Buyers and Sellers, only 17 percent of do-it-yourself home sellers used the Internet to market their home; that’s at a time when Internet use in home searches has risen dramatically – in 2005, 77 percent of all home buyers used the Internet to look for a home.
Finding an interested buyer is only the first step toward a successful sale. The typical home sale today involves more than 20 steps after the initial contract is accepted to complete the transaction. Consumers can learn more about potential post-contract pitfalls by visiting http://www.realtor.org/realtororg.nsf/pages/post_contract_pitfalls.
Most home sellers in today’s market recognize the hazards inherent in do-it-yourself home selling, and rely on the expertise of a real estate professional to assist them when they sell their home. The percentage of owners who sell without representation has been trending down and is now at a record low – according to the 2005 profile, only 13 percent of recent home sellers sold their home without professional help, and only half of those would do it again.
“Selling a home is a full-time job,” said Stevens. “The average homeowner may sell three or four homes in his or her lifetime; Realtors® can sell hundreds over the course of a career. This experience is invaluable, and it’s part of the reason why home sellers who use a real estate professional can expect to sell their homes for 16 percent more, on average, than sellers who try to do it themselves.”
Radio versions of the “Don’t Try This at Home” TV spots began airing on February 6. Those advertisements will run in tandem on radio and television with another NAR spot that premiered on television March 6 titled, “Someone You Can Trust.” That spot highlights the Realtor® Code of Ethics and underscores the honesty and integrity that Realtors® bring to each and every transaction.
Now in its ninth year, the National Association of Realtors® Public Awareness Campaign has helped millions of consumers realize the value of using a Realtor® to help them buy or sell real estate. In 2006, the Public Awareness Campaign will run more than 4,000 spots in national TV and radio, 18,000 spots in local radio and 12,000 spots on XM satellite radio. Ads are airing on network television stations from March through September, and on radio stations from February through November.
--------------------------------------------------------------------------------
National Realty News, a BEXT Inc. publication
Thursday, March 30, 2006
“Selling a home is like climbing Mount Everest,” said Thomas M. Stevens, NAR president and senior vice president of NRT Inc., from Vienna, Va. “If you don’t prepare correctly, you’ll never achieve your goal. Getting a signed contract is like reaching the peak, but that’s only half the journey. Many things can happen on the way back down the mountain. Savvy sellers know to hire a Realtor® to protect their interests and guide them through.”
Home owners who try to sell their home without professional help must overcome a number of hurdles. As mentioned in the TV spots, the obstacles include making the appropriate disclosures, preparing the home for sale, pricing the home appropriately for a dynamic market and, most importantly, attracting qualified, motivated buyers. According to the 2005 NAR Profile of Home Buyers and Sellers, only 17 percent of do-it-yourself home sellers used the Internet to market their home; that’s at a time when Internet use in home searches has risen dramatically – in 2005, 77 percent of all home buyers used the Internet to look for a home.
Finding an interested buyer is only the first step toward a successful sale. The typical home sale today involves more than 20 steps after the initial contract is accepted to complete the transaction. Consumers can learn more about potential post-contract pitfalls by visiting http://www.realtor.org/realtororg.nsf/pages/post_contract_pitfalls.
Most home sellers in today’s market recognize the hazards inherent in do-it-yourself home selling, and rely on the expertise of a real estate professional to assist them when they sell their home. The percentage of owners who sell without representation has been trending down and is now at a record low – according to the 2005 profile, only 13 percent of recent home sellers sold their home without professional help, and only half of those would do it again.
“Selling a home is a full-time job,” said Stevens. “The average homeowner may sell three or four homes in his or her lifetime; Realtors® can sell hundreds over the course of a career. This experience is invaluable, and it’s part of the reason why home sellers who use a real estate professional can expect to sell their homes for 16 percent more, on average, than sellers who try to do it themselves.”
Radio versions of the “Don’t Try This at Home” TV spots began airing on February 6. Those advertisements will run in tandem on radio and television with another NAR spot that premiered on television March 6 titled, “Someone You Can Trust.” That spot highlights the Realtor® Code of Ethics and underscores the honesty and integrity that Realtors® bring to each and every transaction.
Now in its ninth year, the National Association of Realtors® Public Awareness Campaign has helped millions of consumers realize the value of using a Realtor® to help them buy or sell real estate. In 2006, the Public Awareness Campaign will run more than 4,000 spots in national TV and radio, 18,000 spots in local radio and 12,000 spots on XM satellite radio. Ads are airing on network television stations from March through September, and on radio stations from February through November.
--------------------------------------------------------------------------------
National Realty News, a BEXT Inc. publication
Thursday, March 30, 2006
Friday, March 31, 2006
Solar Energy
U.S. Department of Energy - Energy Efficiency and Renewable Energy
A Consumer's Guide to Energy Efficiency and Renewable Energy
Exploring Ways to Use Solar Energy
Step outside on a hot, sunny day, and you'll experience the power of the sun's heat and the light. That's solar energy.
You can use solar energy to do the following:
Heat your home through passive solar design or an active solar heating system
Generate your own electricity
Heat water in your home or swimming pool
Light your home both indoors and outdoors
To enable your use of solar energy for these purposes, your community may have established solar access planning guidelines and/or ordinances.
If you live in the southwestern United States, you may even have the opportunity now or in the future to buy clean electricity from a concentrating solar power plant.
See Solar Radiation Basics to learn more about how solar energy works.
Learn More
Department of Energy Resources
Solar Energy Technologies Program
A Consumer's Guide to Energy Efficiency and Renewable Energy
Exploring Ways to Use Solar Energy
Step outside on a hot, sunny day, and you'll experience the power of the sun's heat and the light. That's solar energy.
You can use solar energy to do the following:
Heat your home through passive solar design or an active solar heating system
Generate your own electricity
Heat water in your home or swimming pool
Light your home both indoors and outdoors
To enable your use of solar energy for these purposes, your community may have established solar access planning guidelines and/or ordinances.
If you live in the southwestern United States, you may even have the opportunity now or in the future to buy clean electricity from a concentrating solar power plant.
See Solar Radiation Basics to learn more about how solar energy works.
Learn More
Department of Energy Resources
Solar Energy Technologies Program
The Energy Policy Act of 2005
What the Energy Bill Means to You
The Energy Policy Act of 2005 (EPACT), signed by President Bush on August 8, 2005, offers consumers and businesses federal tax credits beginning in January 2006 for purchasing fuel-efficient hybrid-electric vehicles and energy-efficient appliances and products. Most of these tax credits remain in effect through 2007.
Buying and driving a fuel-efficient vehicle and purchasing and installing energy-efficient appliances and products provide many benefits such as better gas mileage – meaning lower gasoline costs, fewer emissions, lower energy bills, increased indoor comfort, and reduced air pollution.
Some consumers will also be eligible for utility or state rebates, as well as state tax incentives for energy-efficient homes, vehicles and equipment. Each state’s energy office web site may have more information on specific state tax information.
About Tax CreditsA tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Beginning in tax year 2006, consumers will be able to itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.
Automobile Tax Credits
Individuals and businesses who buy or lease a new hybrid gas-electric car or truck are eligible for, and can receive, an income tax credit of $250-$3,400 – depending on the fuel economy and the weight of the vehicle. Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard qualify for the credit. “Lean-burn” diesel vehicles could also qualify, but currently available diesel vehicles do not meet the emissions standard. There is a similar credit for alternative-fuel vehicles and for fuel-cell vehicles.
If individuals and businesses buy more than one vehicle, they are eligible to receive a tax credit for each. If a tax-exempt organization buys such a vehicle, the retailer is also eligible to receive another credit. Companies that buy heavy-duty hybrid trucks are also eligible for a larger tax credit. Currently, there is a $2,000 tax deduction for hybrid vehicles for the remainder of 2005.
This tax credit is for vehicles “placed in service” beginning January 1, 2006, but because there is a waiting list for many hybrids, consumers can receive the tax credit if they arrange to purchase the vehicle this year as long as they do not take possession of the vehicle until January 1, 2006. This tax credit will be phased out for each manufacturer once that company has sold 60,000 eligible vehicles. At that point, the tax credit for each company’s vehicles will be gradually reduced over the course of another year.
Home Energy Efficiency Improvement Tax CreditsConsumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in the home can receive a tax credit of up to $500 beginning in January 2006.
The EPACT also provides a credit equal to 30% of qualifying expenditures for purchase for qualified photovoltaic property and for solar water heating property used exclusively for purposes other than heating swimming pools and hot tubs. The credit shall not exceed $2000.
Improvements must be installed in or on the taxpayer’s principal residence in the United States. Home improvement tax credits apply for improvements made between January 1, 2006 and December 31, 2007.
Business Tax CreditsBusinesses are eligible for tax credits for buying hybrid vehicles, for building energy- efficient buildings, and for improving the energy efficiency of commercial buildings (as outlined in the Energy Policy Act of 2005).
Biodiesel/Alternative Fuels
Small producer biodiesel and ethanol credit. This credit will benefitsmall agri-biodiesel producers by giving them a 10 cent per gallon tax credit for up to 15 million gallons of agri-biodiesel produced. In addition, the limit on production capacity for small ethanol producers increased from 30 million to 60 million gallons. This is effective until the end of 2008.
Credit for installing alternative fuel refueling property. Fueling stations are eligible to claim a 30% credit for the cost of installing clean-fuel vehicle refueling equipment, (e.g. E85 ethanol pumping stations). Under the provision, a clean fuel is any fuel that consists of at least 85% ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. This is effective through December 31, 2010.
Buildings
Credit for business installation of qualified fuel cells, stationary microturbine power plants, and solar equipment. This provides a 30% tax credit for the purchase price for installing qualified fuel cell power plants for businesses, a 10% credit for qualifying stationary microturbine power plants and a 30% credit for qualifying solar energy equipment. This is effective January 1, 2006 through December 31, 2007.
Business credit of energy-efficient new homes. This provides tax credits to eligible contractors for the construction of a qualified new energy-efficient home. Credit applies to manufactured homes meeting Energy Star criteria and other homes, saving 50% of the energy compared to the EPACT standard. This is effective January 1, 2006 through December 31, 2007.
Energy-efficient Commercial building deduction. This provision allows a tax deduction for energy-efficient commercial buildings that reduce annual energy and power consumption by 50% compared to the American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) 2001 standard. The deduction would equal the cost of energy-efficient property installed during construction, with a maximum deduction of $1.80 per square foot of the building. Additionally, a partial deduction of 60 cents per square foot would be provided for building subsystems.
Energy-efficient appliances - This provides a tax credit for the manufacturer of energy-efficient dishwashers, clothes washers, and refrigerators. Credits vary depending on the efficiency of the unit. This is effective for appliances manufactured in 2006 and 2007.
Below are samples of anticipated tax savings and energy savings for energy-efficient home improvements (as of November 2005):
Product Category
Product Type
Tax Credit Specification
Tax Credit
Windows
Exterior Windows
Meet 2000 IECC & Amendments
10% of cost not to exceed $200 total
Skylights
Meet 2000 IECC & Amendments
10% of cost not to exceed $200 total
Exterior Doors
Meet 2000 IECC & Amendments
10% of cost not to exceed $500 total
Roofing
Metal Roofs
Energy Star qualified
10% of cost not to exceed $500 total
Insulation
Insulation
Meet 2000 IECC & Amendments
10% of cost not to exceed $500 total
HVAC
Central AC
EER 12.5/SEER 15 split Systems EER 12/SEER 14 package systems
$300
Air source heat pumps
HSPF 9 EER 13 SEER 15
$300
Geothermal heat pump
EER 14.1 COP 3.3 closed loop
EER 16.2 COP 3.6 open loop
EER 15 COP 3.5 direct expansion
$300
Gas, oil, propane water heater
Energy Factor 0.80
$300
Electric heat pump water heater
Energy Factor 2.0
$300
Gas, oil, propane furnace or hot water boiler
AFUE 95
$150
Advanced main air circulating fan
No more than 2% of furnace total energy use
$50
* Source: ENERGYSTAR.gov
** The IRS will determine final tax credit amounts
The Energy Policy Act of 2005 (EPACT), signed by President Bush on August 8, 2005, offers consumers and businesses federal tax credits beginning in January 2006 for purchasing fuel-efficient hybrid-electric vehicles and energy-efficient appliances and products. Most of these tax credits remain in effect through 2007.
Buying and driving a fuel-efficient vehicle and purchasing and installing energy-efficient appliances and products provide many benefits such as better gas mileage – meaning lower gasoline costs, fewer emissions, lower energy bills, increased indoor comfort, and reduced air pollution.
Some consumers will also be eligible for utility or state rebates, as well as state tax incentives for energy-efficient homes, vehicles and equipment. Each state’s energy office web site may have more information on specific state tax information.
About Tax CreditsA tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Beginning in tax year 2006, consumers will be able to itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.
Automobile Tax Credits
Individuals and businesses who buy or lease a new hybrid gas-electric car or truck are eligible for, and can receive, an income tax credit of $250-$3,400 – depending on the fuel economy and the weight of the vehicle. Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard qualify for the credit. “Lean-burn” diesel vehicles could also qualify, but currently available diesel vehicles do not meet the emissions standard. There is a similar credit for alternative-fuel vehicles and for fuel-cell vehicles.
If individuals and businesses buy more than one vehicle, they are eligible to receive a tax credit for each. If a tax-exempt organization buys such a vehicle, the retailer is also eligible to receive another credit. Companies that buy heavy-duty hybrid trucks are also eligible for a larger tax credit. Currently, there is a $2,000 tax deduction for hybrid vehicles for the remainder of 2005.
This tax credit is for vehicles “placed in service” beginning January 1, 2006, but because there is a waiting list for many hybrids, consumers can receive the tax credit if they arrange to purchase the vehicle this year as long as they do not take possession of the vehicle until January 1, 2006. This tax credit will be phased out for each manufacturer once that company has sold 60,000 eligible vehicles. At that point, the tax credit for each company’s vehicles will be gradually reduced over the course of another year.
Home Energy Efficiency Improvement Tax CreditsConsumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in the home can receive a tax credit of up to $500 beginning in January 2006.
The EPACT also provides a credit equal to 30% of qualifying expenditures for purchase for qualified photovoltaic property and for solar water heating property used exclusively for purposes other than heating swimming pools and hot tubs. The credit shall not exceed $2000.
Improvements must be installed in or on the taxpayer’s principal residence in the United States. Home improvement tax credits apply for improvements made between January 1, 2006 and December 31, 2007.
Business Tax CreditsBusinesses are eligible for tax credits for buying hybrid vehicles, for building energy- efficient buildings, and for improving the energy efficiency of commercial buildings (as outlined in the Energy Policy Act of 2005).
Biodiesel/Alternative Fuels
Small producer biodiesel and ethanol credit. This credit will benefitsmall agri-biodiesel producers by giving them a 10 cent per gallon tax credit for up to 15 million gallons of agri-biodiesel produced. In addition, the limit on production capacity for small ethanol producers increased from 30 million to 60 million gallons. This is effective until the end of 2008.
Credit for installing alternative fuel refueling property. Fueling stations are eligible to claim a 30% credit for the cost of installing clean-fuel vehicle refueling equipment, (e.g. E85 ethanol pumping stations). Under the provision, a clean fuel is any fuel that consists of at least 85% ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. This is effective through December 31, 2010.
Buildings
Credit for business installation of qualified fuel cells, stationary microturbine power plants, and solar equipment. This provides a 30% tax credit for the purchase price for installing qualified fuel cell power plants for businesses, a 10% credit for qualifying stationary microturbine power plants and a 30% credit for qualifying solar energy equipment. This is effective January 1, 2006 through December 31, 2007.
Business credit of energy-efficient new homes. This provides tax credits to eligible contractors for the construction of a qualified new energy-efficient home. Credit applies to manufactured homes meeting Energy Star criteria and other homes, saving 50% of the energy compared to the EPACT standard. This is effective January 1, 2006 through December 31, 2007.
Energy-efficient Commercial building deduction. This provision allows a tax deduction for energy-efficient commercial buildings that reduce annual energy and power consumption by 50% compared to the American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) 2001 standard. The deduction would equal the cost of energy-efficient property installed during construction, with a maximum deduction of $1.80 per square foot of the building. Additionally, a partial deduction of 60 cents per square foot would be provided for building subsystems.
Energy-efficient appliances - This provides a tax credit for the manufacturer of energy-efficient dishwashers, clothes washers, and refrigerators. Credits vary depending on the efficiency of the unit. This is effective for appliances manufactured in 2006 and 2007.
Below are samples of anticipated tax savings and energy savings for energy-efficient home improvements (as of November 2005):
Product Category
Product Type
Tax Credit Specification
Tax Credit
Windows
Exterior Windows
Meet 2000 IECC & Amendments
10% of cost not to exceed $200 total
Skylights
Meet 2000 IECC & Amendments
10% of cost not to exceed $200 total
Exterior Doors
Meet 2000 IECC & Amendments
10% of cost not to exceed $500 total
Roofing
Metal Roofs
Energy Star qualified
10% of cost not to exceed $500 total
Insulation
Insulation
Meet 2000 IECC & Amendments
10% of cost not to exceed $500 total
HVAC
Central AC
EER 12.5/SEER 15 split Systems EER 12/SEER 14 package systems
$300
Air source heat pumps
HSPF 9 EER 13 SEER 15
$300
Geothermal heat pump
EER 14.1 COP 3.3 closed loop
EER 16.2 COP 3.6 open loop
EER 15 COP 3.5 direct expansion
$300
Gas, oil, propane water heater
Energy Factor 0.80
$300
Electric heat pump water heater
Energy Factor 2.0
$300
Gas, oil, propane furnace or hot water boiler
AFUE 95
$150
Advanced main air circulating fan
No more than 2% of furnace total energy use
$50
* Source: ENERGYSTAR.gov
** The IRS will determine final tax credit amounts
Thursday, March 02, 2006
20 signs of a bad loan
By Dana Dratch
If your credit is damaged but you need cash, you might be tempted to accept a loan without worrying too much about the terms. But some conditions and clauses should make you reconsider your options.
"There are some extremely abusive, one-sided contract terms consumers sign because they think that's what they have to do to get the money," says Jean Ann Fox, director of consumer protection for the Consumer Federation of America. But often you can find a better deal if you shop around.
Here are some loan conditions that should make you think twice:
1. Money upfront. "Money upfront is a really bad sign," says Fritz Elmendorf, vice president of communications for the Consumer Bankers Association, a financial services trade group. "Possibly even of fraud." One nominal application fee is fine, he says. But the point of a loan is that they are supposed to be giving you money, not the other way around.
2. Changing interest rate. An adjustable-rate mortgage can be a good thing for some borrowers. But it should be a trade-off. In return for accepting a little uncertainty, the borrower gets favorable terms, like a lower rate. Too many times in the subprime market, borrowers are saddled with adjustable-rate mortgages simply as the cost of getting a loan, says Michael Stegman, professor of public policy and director of the Center for Community Capitalism at The University of North Carolina at Chapel Hill.
If you have a rate that can change, you have to ask some questions. "You want to know what is the worst-case scenario, not best," says Norma Garcia, senior attorney with Consumers Union. "What's the worst this can get? Will that be OK?"
Realize that a changing rate makes the loan a much riskier proposition for you. In a recent study of subprime mortgage refinance loans, ARM features boosted the chances of foreclosure by 49 percent, Stegman says.
3. Balloon payment. "The ideal is: Don't have any balloon payments," says John Taylor, president and CEO of National Community Reinvestment Coalition, a trade association of community groups. The worst scenario: The balloon is due early in the loan. "It makes a huge amount of money due right away, and most people in the subprime market really can't afford to do that. So for a lot of people, they end up losing everything."
In subprime mortgage refinance loans, borrowers with a balloon payment have a 46 percent greater chance of foreclosure, says Stegman.
4. Too much money. More is not always better. So raise the red flag if a lender is trying to talk you into a larger loan. Two red flags if your home is the collateral. If you have to borrow, take the least amount for the shortest time period with the lowest APR.
5. Excessive fees. "Some fees are truly legitimate," says Garcia. "Some are backdoor fees that don't appear in the disclosure." What you want to watch out for is excessive or hidden fees. Add everything up yourself. The sum of the terms you shopped should equal what's in the loan documents. If it doesn't, you need to ask some questions.
"The title insurance policy should be something competitive," says Taylor. And if you're refinancing, you should get a refinance rate on the policy -- often half the cost, he says. "In terms of points, you shouldn't pay more than 1 to 2 points even in subprime situations. You can find competitive subprimers who will make you loans at those rates."
6. Additional services you don't want or need. Some loans are bundled with insurance policies to pick up payments or pay off the loan if you die or become disabled. Assuming you want the coverage (and can't get it cheaper from your insurance company), the problem is that many times you pay for the entire policy upfront and it's rolled into the loan with interest, Taylor says. So if you refinance that 30-year mortgage after five years, you'll have paid for 25 years of insurance that you won't use and can't recoup. If you want the feature, look for a pay-as-you-go version.
7. A credit card that taps your home equity. You don't want to squander home equity on a thousand little everyday purchases, says Garcia. "That's a real scary prospect."
8. High interest rate. The difference between prime and subprime rates will vary with the length and type of loan. With a mortgage, 5 percent to 6 percent above prime and "it's time for the customer to look around and see if they can do better," says Allen Fishbein, director of housing and credit policy for Consumer Federation of America.
Even if your credit is bad, shop around and be sure to include a credit union and a bank that makes both prime and subprime loans on your list.
9. No minimum loan term. Often with a payday loan, the entire loan (interest and principal) is due very quickly, says Fox. That means the borrower will be borrowing again just to keep pace with the debt, creating a never-ending cycle.
10. Requires a valuable asset as collateral. It may seem obvious that car-title lenders and pawn shops are a gamble because you risk losing the item if you can't come up with cash you already don't have. But consumers think nothing of putting their houses on the same block with a home equity loan or line of credit. "The worst are home equity second mortgage loans, all of the loans that are secured by the roof over your head," says Fox.
11. Binding mandatory arbitration clause. What is this? Before you sign for the loan, you forgo any rights to sue for any reason and instead agree to binding arbitration. The problem: Many consumer advocates believe that arbitrators' decisions tend to favor the lenders and deny borrowers the right to due process.
Some of the big lenders are moving away from arbitration clauses, says Fishbein. But they're still around in the subprime market.
"This should be freely entered into at the time of dispute, not as a condition for obtaining the loan," he says. "By agreeing to this provision if a dispute should arise, the table is tilted toward the lender."
12. Prepayment penalties. For the borrower, this fee "adds to the cost of credit," says Fishbein. Reason: If your financial situation or credit improves, you can't refinance your loan at a better rate. "It's one of the features we find particularly bothersome in subprime loans," says Fishbein.
Some credit experts advise avoiding prepayment penalties altogether. Others caution that one year is fine. Still others recommend keeping it to three years or less.
Prepayment penalties also increase the odds of foreclosure, says Stegman. In his study of subprime refinance loans, consumers with prepayment penalties of less than three years had a 15 percent higher rate of foreclosure. With three years or more, the numbers went to 20 percent.
And make sure the loan doesn't use the Rule of 78 to calculate interest. It's an antiquated method and "a hidden prepayment penalty," Fox says. What you want to see instead: the word "actuarial." That means "you pay for credit for the actual length of time you use it," she says.
13. Balance transfer fees. "Depending on how much you're transferring, it can be a lot of money," says Garcia. "It's something that's really easy to overlook and can cost you hundreds of dollars."
14. The lender solicited you for the loan. Face it, you get the best terms when you shop around and compare. If you're just accepting what was offered, you probably could do better.
15. Teaser rates. Who are they teasing? The person whose name is on the bill. Read the fine print, and go with a lender who's willing to give you a good rate and stick with it.
16. It comes with a free vacation. "If it's a product that's that good, you don't have to add something to make it attractive," says Garcia.
17. High pressure tactics. Are you being urged to sign immediately? "Don't do that," says Garcia. Instead, have a third party look through the paperwork. Some possible candidates: an accountant, lawyer or someone at your local bank (if they aren't making the loan). Or call a local credit counselor affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counselors.
"If it's good today, it will be good tomorrow," says Garcia.
18. The lender is focused on your assets, not your income. Whether you're pledging your car title or your home equity, if you're a bad risk and the lender doesn't care, that should set off the warning bells. "The biggest thing that would send me running: 'no job, bad credit, bankruptcy -- no problem because you have equity in your home,'" says Garcia. "If you don't have income, you're going to default, and you will be out of your home."
19. A slew of "little" red flags. You may be able to negotiate a couple of unfavorable terms. But if the contract is loaded with them, you might just want to walk. A multitude of bad loan terms in combination could create a financial disaster.
The most dangerous triumvirate: an adjustable rate, prepayment penalties and balloon payments. "You really don't want to have these combinations of terms," says Stegman. Not only are you setting up a financial risk, but you're also limiting your escape options.
20. Terms you don't understand. Loans have gotten a lot more complicated. And with the addition of concepts like interest-only loans, adjustable rates and negative amortization, you might feel like you need an economics degree just to shop around. The truth is you might be better off with a more standard loan.
"Borrowers have to be asking a lot more questions than they were before," says Fishbein. Especially tricky: What's the payment, how often will that change and what's the worst that it could get? And if increases are capped, does that mean the lender will add payments to the end of the loan?
"You need to do the math," he says, "and ask a lot of questions."
If your credit is damaged but you need cash, you might be tempted to accept a loan without worrying too much about the terms. But some conditions and clauses should make you reconsider your options.
"There are some extremely abusive, one-sided contract terms consumers sign because they think that's what they have to do to get the money," says Jean Ann Fox, director of consumer protection for the Consumer Federation of America. But often you can find a better deal if you shop around.
Here are some loan conditions that should make you think twice:
1. Money upfront. "Money upfront is a really bad sign," says Fritz Elmendorf, vice president of communications for the Consumer Bankers Association, a financial services trade group. "Possibly even of fraud." One nominal application fee is fine, he says. But the point of a loan is that they are supposed to be giving you money, not the other way around.
2. Changing interest rate. An adjustable-rate mortgage can be a good thing for some borrowers. But it should be a trade-off. In return for accepting a little uncertainty, the borrower gets favorable terms, like a lower rate. Too many times in the subprime market, borrowers are saddled with adjustable-rate mortgages simply as the cost of getting a loan, says Michael Stegman, professor of public policy and director of the Center for Community Capitalism at The University of North Carolina at Chapel Hill.
If you have a rate that can change, you have to ask some questions. "You want to know what is the worst-case scenario, not best," says Norma Garcia, senior attorney with Consumers Union. "What's the worst this can get? Will that be OK?"
Realize that a changing rate makes the loan a much riskier proposition for you. In a recent study of subprime mortgage refinance loans, ARM features boosted the chances of foreclosure by 49 percent, Stegman says.
3. Balloon payment. "The ideal is: Don't have any balloon payments," says John Taylor, president and CEO of National Community Reinvestment Coalition, a trade association of community groups. The worst scenario: The balloon is due early in the loan. "It makes a huge amount of money due right away, and most people in the subprime market really can't afford to do that. So for a lot of people, they end up losing everything."
In subprime mortgage refinance loans, borrowers with a balloon payment have a 46 percent greater chance of foreclosure, says Stegman.
4. Too much money. More is not always better. So raise the red flag if a lender is trying to talk you into a larger loan. Two red flags if your home is the collateral. If you have to borrow, take the least amount for the shortest time period with the lowest APR.
5. Excessive fees. "Some fees are truly legitimate," says Garcia. "Some are backdoor fees that don't appear in the disclosure." What you want to watch out for is excessive or hidden fees. Add everything up yourself. The sum of the terms you shopped should equal what's in the loan documents. If it doesn't, you need to ask some questions.
"The title insurance policy should be something competitive," says Taylor. And if you're refinancing, you should get a refinance rate on the policy -- often half the cost, he says. "In terms of points, you shouldn't pay more than 1 to 2 points even in subprime situations. You can find competitive subprimers who will make you loans at those rates."
6. Additional services you don't want or need. Some loans are bundled with insurance policies to pick up payments or pay off the loan if you die or become disabled. Assuming you want the coverage (and can't get it cheaper from your insurance company), the problem is that many times you pay for the entire policy upfront and it's rolled into the loan with interest, Taylor says. So if you refinance that 30-year mortgage after five years, you'll have paid for 25 years of insurance that you won't use and can't recoup. If you want the feature, look for a pay-as-you-go version.
7. A credit card that taps your home equity. You don't want to squander home equity on a thousand little everyday purchases, says Garcia. "That's a real scary prospect."
8. High interest rate. The difference between prime and subprime rates will vary with the length and type of loan. With a mortgage, 5 percent to 6 percent above prime and "it's time for the customer to look around and see if they can do better," says Allen Fishbein, director of housing and credit policy for Consumer Federation of America.
Even if your credit is bad, shop around and be sure to include a credit union and a bank that makes both prime and subprime loans on your list.
9. No minimum loan term. Often with a payday loan, the entire loan (interest and principal) is due very quickly, says Fox. That means the borrower will be borrowing again just to keep pace with the debt, creating a never-ending cycle.
10. Requires a valuable asset as collateral. It may seem obvious that car-title lenders and pawn shops are a gamble because you risk losing the item if you can't come up with cash you already don't have. But consumers think nothing of putting their houses on the same block with a home equity loan or line of credit. "The worst are home equity second mortgage loans, all of the loans that are secured by the roof over your head," says Fox.
11. Binding mandatory arbitration clause. What is this? Before you sign for the loan, you forgo any rights to sue for any reason and instead agree to binding arbitration. The problem: Many consumer advocates believe that arbitrators' decisions tend to favor the lenders and deny borrowers the right to due process.
Some of the big lenders are moving away from arbitration clauses, says Fishbein. But they're still around in the subprime market.
"This should be freely entered into at the time of dispute, not as a condition for obtaining the loan," he says. "By agreeing to this provision if a dispute should arise, the table is tilted toward the lender."
12. Prepayment penalties. For the borrower, this fee "adds to the cost of credit," says Fishbein. Reason: If your financial situation or credit improves, you can't refinance your loan at a better rate. "It's one of the features we find particularly bothersome in subprime loans," says Fishbein.
Some credit experts advise avoiding prepayment penalties altogether. Others caution that one year is fine. Still others recommend keeping it to three years or less.
Prepayment penalties also increase the odds of foreclosure, says Stegman. In his study of subprime refinance loans, consumers with prepayment penalties of less than three years had a 15 percent higher rate of foreclosure. With three years or more, the numbers went to 20 percent.
And make sure the loan doesn't use the Rule of 78 to calculate interest. It's an antiquated method and "a hidden prepayment penalty," Fox says. What you want to see instead: the word "actuarial." That means "you pay for credit for the actual length of time you use it," she says.
13. Balance transfer fees. "Depending on how much you're transferring, it can be a lot of money," says Garcia. "It's something that's really easy to overlook and can cost you hundreds of dollars."
14. The lender solicited you for the loan. Face it, you get the best terms when you shop around and compare. If you're just accepting what was offered, you probably could do better.
15. Teaser rates. Who are they teasing? The person whose name is on the bill. Read the fine print, and go with a lender who's willing to give you a good rate and stick with it.
16. It comes with a free vacation. "If it's a product that's that good, you don't have to add something to make it attractive," says Garcia.
17. High pressure tactics. Are you being urged to sign immediately? "Don't do that," says Garcia. Instead, have a third party look through the paperwork. Some possible candidates: an accountant, lawyer or someone at your local bank (if they aren't making the loan). Or call a local credit counselor affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counselors.
"If it's good today, it will be good tomorrow," says Garcia.
18. The lender is focused on your assets, not your income. Whether you're pledging your car title or your home equity, if you're a bad risk and the lender doesn't care, that should set off the warning bells. "The biggest thing that would send me running: 'no job, bad credit, bankruptcy -- no problem because you have equity in your home,'" says Garcia. "If you don't have income, you're going to default, and you will be out of your home."
19. A slew of "little" red flags. You may be able to negotiate a couple of unfavorable terms. But if the contract is loaded with them, you might just want to walk. A multitude of bad loan terms in combination could create a financial disaster.
The most dangerous triumvirate: an adjustable rate, prepayment penalties and balloon payments. "You really don't want to have these combinations of terms," says Stegman. Not only are you setting up a financial risk, but you're also limiting your escape options.
20. Terms you don't understand. Loans have gotten a lot more complicated. And with the addition of concepts like interest-only loans, adjustable rates and negative amortization, you might feel like you need an economics degree just to shop around. The truth is you might be better off with a more standard loan.
"Borrowers have to be asking a lot more questions than they were before," says Fishbein. Especially tricky: What's the payment, how often will that change and what's the worst that it could get? And if increases are capped, does that mean the lender will add payments to the end of the loan?
"You need to do the math," he says, "and ask a lot of questions."
Thursday, January 12, 2006
Top Mistakes of Home Buyers and Sellers in 2005
This is a good article I found in Broker Agent News
By Mark Nash
The 2005 residential real estate market was filled with anticipation of the over- hyped real estate bubble. Though we'll only see a correction, home buyers and sellers made some mistakes that those looking to buy or sell in 2006 can put to good use in their transactions.
Buyers
Bought properties to flip at top-of-market prices. Thinking the bubble headlines were wrong or didn't apply to them, newbie real estate investors wanted to become week-end millionaires. What they didn't know is they were buying the experienced investors portfolios as they exited markets at the top.
Utilized Interest-Only Mortgages. Many home-hungry buyers discovered the only way you can pay top-of-market prices is to get an interest-only mortgage. With declining prices and no monthly principal payments, these homebuyers could fuel a foreclosure market in 2006. Fixed-rate mortgages will become the majority in 2006 as mortgage underwriters and educated consumers are reunited.
Overlooked Resale Characteristics. New construction was the rage in 2005, everyone wanted to select finishes, floor coverings and kitchen cabinets. 2005 buyers should beware when this years homebuyers become sellers, buyers could bypass their resale that was new in 2005 for the chance to design their own new home. Look to future before signing on the line.
Skipped Performing a Home Inspection. Before some markets shifted away from sellers markets, many homebuyers waived their right to a property inspection. Never, skip or waive the right to a inspection, the benefits far out weigh the costs and could save you numerous headaches and expenses later. Hire a professional, not Uncle Bert.
Misinterpreted developers give-away's. Two years free condominium assessments, stainless appliances and plasma tv's were thrown in to induce buyers to write contracts to purchase. What many buyers thought were a freebie were actually a signal that markets were softening and that projects were slow to sell from increased competition and a lack of buyers. Incentives are a band-aid for a languishing development.
Were represented by the same agent representing the sellers. Thinking they might get a better deal or out of ignorance used the listing agent to represent them as well. Most states require written acceptance of this situation known as dual-agency by both parties under agent license laws. All buyers should be represented by an agent who has a fiduciary responsibility to them. Hire an Exclusive Buyers Agent.
Didn't Read Homeowners Association Documents. Getting rid of Fido because you didn't know you were moving into a no-dog building is an example why every buyer should request and read home owner association declarations, rules and regulations, association meeting minutes and budgets. Ask if there are any special assessments (typically for capital improvements; new roofs, windows, elevators) or planned ones. Special assessments can run into the thousands.
Neglected to request rates of state, county or local transfer taxes paid by buyers at closing. Some buyers learn too late that they might need large amounts of extra money to pay transfer taxes in the state, county and city where they are purchasing property. Transfer taxes which typically can't be financed can kill a transaction. Inquire when you start your search how much transfer taxes are and who pays them.
Sellers
Over-priced home. Thinking back to bragging sellers at the water cooler or at the neighborhood cocktail party as little as a year ago, home sellers in 2005 over-priced properties in record numbers. After chewing up market time, the realization set in that it wasn't the same market as '02.'03 or 2004. Realistic pricing based on sold comparable's in the last six months illustrates to buyers that you understand today's market.
No Internet property marketing. According to The National Association of Realtors® over 70% of all home buyers start their search on the Internet before contacting a real estate agent. Require any agent you list your home with to post a virtual (360 digital) tour and a minimum of eight indoor and outdoor photos on the Internet. CD's of your home are a great take-away for open houses.
Stop showings to early after contract. With a shift towards buyers for the first time in years, buyers remorse was on the upside in 2005. Many sellers lost valuable market time when taking their home off market too early after signing a purchase contract. Continue to show your home until you feel very comfortable that your buyers intend to go to the closing table with you.
Refused to pay buyers closing costs. For the first time in many years, buyers based on their strength in the market, asked for and received give-backs from sellers. Closing costs and points on mortgages were the most popular. Decide before offers come in, what your strategy is for dealing with give-back requests. In 2006 expect owner-financing to be the next buyer perk.
Exclusion confusion. As prices dropped, sellers began to strip fixtures and amenities in contract negotiations. Forget "if the price is right" and take down and replace Grandma's chandelier and remove the mid-century refrigerator for sodas before you place your home on the market . Some simple ratios of home list price versus chandelier cost will convince you to not get distracted by personal property or must-keep fixtures.
Knowing your market and competition. Buyers in 2005 were very savvy with market times and available inventory. Home sellers who were out-of-touch failed to spend the time to visit competing properties at public open houses, study the competitions marketing and "listening" to the market. No or few showings, no second showings or purchase offers and unfavorable feedback indicate market issues with your home. Don't be the obstacle to selling your home.
Paid document fees on top of full-service commissions. American business is in love with extra fees that they charge if you don't ask to have them waived. In 2005 documentation fees became standard in listing agreements. No matter what your told, they are just another revenue source for brokerages. It's excessive for brokerages to ask for another $300.00 on top of 5-7 percent commissions from home sellers. Either ask to have them waived or have the listing agent pay them.
By Mark Nash
The 2005 residential real estate market was filled with anticipation of the over- hyped real estate bubble. Though we'll only see a correction, home buyers and sellers made some mistakes that those looking to buy or sell in 2006 can put to good use in their transactions.
Buyers
Bought properties to flip at top-of-market prices. Thinking the bubble headlines were wrong or didn't apply to them, newbie real estate investors wanted to become week-end millionaires. What they didn't know is they were buying the experienced investors portfolios as they exited markets at the top.
Utilized Interest-Only Mortgages. Many home-hungry buyers discovered the only way you can pay top-of-market prices is to get an interest-only mortgage. With declining prices and no monthly principal payments, these homebuyers could fuel a foreclosure market in 2006. Fixed-rate mortgages will become the majority in 2006 as mortgage underwriters and educated consumers are reunited.
Overlooked Resale Characteristics. New construction was the rage in 2005, everyone wanted to select finishes, floor coverings and kitchen cabinets. 2005 buyers should beware when this years homebuyers become sellers, buyers could bypass their resale that was new in 2005 for the chance to design their own new home. Look to future before signing on the line.
Skipped Performing a Home Inspection. Before some markets shifted away from sellers markets, many homebuyers waived their right to a property inspection. Never, skip or waive the right to a inspection, the benefits far out weigh the costs and could save you numerous headaches and expenses later. Hire a professional, not Uncle Bert.
Misinterpreted developers give-away's. Two years free condominium assessments, stainless appliances and plasma tv's were thrown in to induce buyers to write contracts to purchase. What many buyers thought were a freebie were actually a signal that markets were softening and that projects were slow to sell from increased competition and a lack of buyers. Incentives are a band-aid for a languishing development.
Were represented by the same agent representing the sellers. Thinking they might get a better deal or out of ignorance used the listing agent to represent them as well. Most states require written acceptance of this situation known as dual-agency by both parties under agent license laws. All buyers should be represented by an agent who has a fiduciary responsibility to them. Hire an Exclusive Buyers Agent.
Didn't Read Homeowners Association Documents. Getting rid of Fido because you didn't know you were moving into a no-dog building is an example why every buyer should request and read home owner association declarations, rules and regulations, association meeting minutes and budgets. Ask if there are any special assessments (typically for capital improvements; new roofs, windows, elevators) or planned ones. Special assessments can run into the thousands.
Neglected to request rates of state, county or local transfer taxes paid by buyers at closing. Some buyers learn too late that they might need large amounts of extra money to pay transfer taxes in the state, county and city where they are purchasing property. Transfer taxes which typically can't be financed can kill a transaction. Inquire when you start your search how much transfer taxes are and who pays them.
Sellers
Over-priced home. Thinking back to bragging sellers at the water cooler or at the neighborhood cocktail party as little as a year ago, home sellers in 2005 over-priced properties in record numbers. After chewing up market time, the realization set in that it wasn't the same market as '02.'03 or 2004. Realistic pricing based on sold comparable's in the last six months illustrates to buyers that you understand today's market.
No Internet property marketing. According to The National Association of Realtors® over 70% of all home buyers start their search on the Internet before contacting a real estate agent. Require any agent you list your home with to post a virtual (360 digital) tour and a minimum of eight indoor and outdoor photos on the Internet. CD's of your home are a great take-away for open houses.
Stop showings to early after contract. With a shift towards buyers for the first time in years, buyers remorse was on the upside in 2005. Many sellers lost valuable market time when taking their home off market too early after signing a purchase contract. Continue to show your home until you feel very comfortable that your buyers intend to go to the closing table with you.
Refused to pay buyers closing costs. For the first time in many years, buyers based on their strength in the market, asked for and received give-backs from sellers. Closing costs and points on mortgages were the most popular. Decide before offers come in, what your strategy is for dealing with give-back requests. In 2006 expect owner-financing to be the next buyer perk.
Exclusion confusion. As prices dropped, sellers began to strip fixtures and amenities in contract negotiations. Forget "if the price is right" and take down and replace Grandma's chandelier and remove the mid-century refrigerator for sodas before you place your home on the market . Some simple ratios of home list price versus chandelier cost will convince you to not get distracted by personal property or must-keep fixtures.
Knowing your market and competition. Buyers in 2005 were very savvy with market times and available inventory. Home sellers who were out-of-touch failed to spend the time to visit competing properties at public open houses, study the competitions marketing and "listening" to the market. No or few showings, no second showings or purchase offers and unfavorable feedback indicate market issues with your home. Don't be the obstacle to selling your home.
Paid document fees on top of full-service commissions. American business is in love with extra fees that they charge if you don't ask to have them waived. In 2005 documentation fees became standard in listing agreements. No matter what your told, they are just another revenue source for brokerages. It's excessive for brokerages to ask for another $300.00 on top of 5-7 percent commissions from home sellers. Either ask to have them waived or have the listing agent pay them.
Most Overvalued Housing Markets
Hare is some interesting data from CNNMoney.com….
Link to original article
Most Overvalued Housing Markets
Latest analysis of 299 markets: See how your hometown ranks.
By Les Christie, CNNMoney.com staff writer
January 3, 2006: 2:33 AM EST
NEW YORK (CNNMoney.com) - Sixty-five of the nation’s 299 biggest real estate markets are severely overpriced and subject to possible price corrections.
That’s according to the latest (third quarter) Housing Market Analysis conducted by National City Corp, a financial holding company, in conjunction with Global Insight, a financial information provider.
The report named Naples, Florida as the most overvalued of all housing markets in the United States. A single-family, median-priced home there sells for $329,970, 84 percent more than what it should cost — $180,956 — according to the analysis.
National City arrives at its estimates of what the typical house in these markets should cost by examining the town’s population densities, local interest rates, and income levels. It also factors in historical premiums and discounts for each area.
Other markets deemed wildly overpriced included Merced, California (by 77 percent), Salinas, California (75 percent), and Port St. Lucie, Florida (72 percent).
Undervalued markets were College Station (-23 percent), El Paso (-18 percent), and Killeen (-16 percent), all in Texas. That state dominated the discounted markets list with nine of the 10 most undervalued housing markets. Montgomery, Alabama was No. 8 among the undervalued markets.
The data did produce some evidence of prices moderating, according to National City’s chief economist, Richard DeKaser.
In Massachusetts, for example, one of the hottest of housing markets over the past few years, each of the seven housing markets analyzed was still overvalued. Prices, however, had fallen in all seven. That would indicate the state is trending back toward normal valuations.
The same could not be said of Florida. The Sunshine State had 15 different markets on the list of extremely overpriced metro areas and all 15 had grown more overpriced during the quarter.
Amidst all these hot and cold markets there were a few judged, like Goldilock’s porridge, “just right.” They included Albuquerque New Mexico, Dayton Ohio, and Omaha Nebraska. In all those towns actually selling prices closely tracked the expected values.
Areas over-valued
Naples, FL +84%
Merced, CA +77%
Salinas, CA +75%
Port St. Lucie, FL +72%
Stockton, CA +72%
Madera, CA +70%
Santa Barbara, CA +70%
Modesto, CA +67%
Napa, CA +65%
Riverside, CA +65%
Medford, OR +64%
Sacramento, CA +61%
Atlantic City, NJ +59%
Chico, CA +59%
Fresno, CA +58%
West Palm Beach, FL +57%
Redding, CA +56%
Santa Rosa, CA +56%
Bend, OR +56%
Sarasota, FL +56%
Miami, FL +55%
Oxnard, CA +55%
Vero Beach, FL +54%
Los Angeles, CA +54%
Fort Lauderdale, FL +53%
Vallejo, CA +53%
San Luis Obispo, CA +53%
Cape Coral, FL +52%
Bakersfield, CA +51%
Palm Bay, FL +49%
Barnstable Town, MA +48%
Oakland, CA +47%
Ocean City, NJ +47%
Prescott, AZ +46%
Panama City, FL +46%
San Diego, CA +46%
Visalia, CA +45%
San Jose, CA +44%
Deltona, FL +44%
Santa Cruz, CA +44%
Santa Ana, CA +44%
Bellingham, WA +43%
Fort Walton Beach, FL +43%
Nassau-Suffolk, NY +43%
Poughkeepsie, NY +39%
Reno, NV +38%
Las Vegas, NV +38%
Kingston, NY +38%
Washington, DC-VA-MD-WV +37%
Bethesda, MD +36%
Providence, RI-MA +35%
San Francisco, CA +35%
St. George, UT +35%
Ocala, FL +35%
Phoenix, AZ +35%
Portland, OR-WA +35%
Eugene, OR +34%
Tampa, FL +34%
Pensacola, FL +33%
Orlando, FL +33%
Grand Junction, CO +31%
Honolulu, HI +31%
Edison, NJ +31%
Duluth, MN-WI +31%
Jacksonville, FL +31%
Virginia Beach, VA-NC +29%
Worcester, MA +29%
Portland, ME +29%
Flagstaff, AZ +29%
Essex County, MA +28%
Baltimore, MD +28%
Charlottesville, VA +28%
Charleston, WV +28%
Tucson, AZ +27%
Newark, NJ-PA +27%
New York, NY-NJ +27%
Monroe, MI +26%
Bay City, MI +26%
Flint, MI +26%
Olympia, WA +26%
Wilmington, NC +25%
Tacoma, WA +25%
Salem, OR +25%
Minneapolis, MN-WI +24%
Asheville, NC +24%
Seattle, WA +24%
Mount Vernon, WA +24%
Jackson, MI +24%
Longview, WA +24%
Lakeland, FL +23%
Brunswick, GA +23%
Gainesville, FL +23%
Manchester, NH +23%
Bremerton, WA +22%
Tallahassee, FL +22%
Holland, MI +22%
Niles, MI +21%
Savannah, GA +21%
Santa Fe, NM +21%
Chicago, IL +21%
Eau Claire, WI +20%
Vineland, NJ +20%
Trenton, NJ +20%
Rockingham, NH +20%
Anchorage, AK +20%
Casper, WY +20%
Racine, WI +20%
Battle Creek, MI +20%
Springfield, MA +19%
Detroit, MI +19%
Greeley, CO +19%
Burlington, VT +18%
Wilmington, DE-MD-NJ +18%
Camden, NJ +18%
Boston, MA +18%
Lansing, MI +18%
Boulder, CO +18%
Michigan City, IN +17%
Ann Arbor, MI +17%
York, PA +17%
Milwaukee, WI +16%
Madison, WI +16%
Philadelphia, PA +15%
Spokane, WA +15%
Warren, MI +15%
Norwich, CT +15%
Richmond, VA +15%
Corvallis, OR +14%
Grand Rapids, MI +14%
Muskegon, MI +14%
Lake-Kenosha, IL-WI +14%
Albany, NY +13%
Allentown, PA-NJ +13%
Saginaw, MI +13%
Harrisonburg, VA +13%
La Crosse, WI-MN +13%
Boise City, ID +13%
Pittsfield, MA +13%
Wenatchee, WA +13%
Rockford, IL +13%
Farmington, NM +13%
Cambridge, MA +12%
New Orleans, LA +12%
Janesville, WI +11%
New Haven, CT +11%
Gainesville, GA +11%
Kalamazoo, MI +11%
Roanoke, VA +11%
Fayetteville, AR-MO +11%
Canton, OH +11%
Lancaster, PA +10%
Colorado Springs, CO +10%
Denver, CO +10%
Peoria, IL +10%
Reading, PA +10%
Fort Collins, CO +10%
Waterloo, IA +9%
Gary, IN +9%
St. Louis, MO-IL +9%
Champaign, IL +9%
Yakima, WA +9%
Dalton, GA +9%
Sheboygan, WI +9%
Toledo, OH +9%
Green Bay, WI +8%
Springfield, OH +8%
Youngstown, OH-PA +8%
Lynchburg, VA +8%
Davenport, IA-IL +7%
St. Joseph, MO-KS +7%
Mansfield, OH +7%
Hickory, NC +6%
Fond du Lac, WI +6%
Cleveland, OH +6%
Bridgeport, CT +6%
Billings, MT +5%
Chattanooga, TN-GA +5%
Idaho Falls, ID +5%
Cheyenne, WY +5%
Pueblo, CO +5%
Dubuque, IA +4%
Topeka, KS +4%
Hartford, CT +4%
Kansas City, MO-KS +4%
Akron, OH +4%
Wausau, WI +4%
Salt Lake City, UT +4%
Scranton, PA +4%
Lexington, KY +4%
Bismarck, ND +4%
Athens, GA +3%
Fargo, ND-MN +3%
Sandusky, OH +3%
Knoxville, TN +3%
Bloomington, IN +3%
Anderson, IN +3%
Lafayette, LA +3%
Louisville, KY-IN +3%
Durham, NC +2%
Atlanta, GA +2%
Areas under-valued Erie, PA +2%
Columbia, MO +2%
Columbus, OH +2%
Harrisburg, PA +2%
Kennewick, WA +2%
Provo, UT +2%
Lima, OH +1%
Utica, NY +1%
Bowling Green, KY +1%
Hattiesburg, MS +1%
Decatur, IL +1%
Columbia, SC +1%
Cincinnati, OH-KY-IN +1%
Rochester, MN 0%
Greenville, SC 0%
Oshkosh, WI 0%
Lawrence, KS 0%
Las Cruces, NM 0%
Omaha, NE-IA 0%
Appleton, WI 0%
Albuquerque, NM 0%
Burlington, NC 0%
Ogden, UT 0%
Baton Rouge, LA 0%
Dayton, OH 0%
Amarillo, TX 0%
Alexandria, LA 0%
Kokomo, IN -1%
Nashville, TN -1%
Winston-Salem, NC -1%
Spartanburg, SC -1%
Florence, SC -1%
Birmingham, AL -1%
Sherman, TX -1%
Jackson, MS -1%
Houma, LA -1%
Pittsburgh, PA -1%
Binghamton, NY -1%
Monroe, LA -2%
Columbus, GA-AL -2%
Sioux Falls, SD -2%
Des Moines, IA -2%
Columbus, IN -2%
Lincoln, NE -2%
Mobile, AL -2%
Greensboro, NC -2%
Albany, GA -2%
Augusta, GA-SC -2%
Raleigh, NC -3%
Owensboro, KY -3%
Evansville, IN-KY -3%
Bloomington, IL -3%
Shreveport, LA -3%
Cedar Rapids, IA -3%
Greenville, NC -4%
Syracuse, NY -4%
South Bend, IN-MI -4%
Indianapolis, IN -5%
Springfield, IL -5%
Rocky Mount, NC -5%
Oklahoma City, OK -5%
Jefferson City, MO -5%
Buffalo, NY -5%
Fort Wayne, IN -5%
Charlotte, NC-SC -6%
Warner Robins, GA -6%
Iowa City, IA -6%
Decatur, AL -6%
Wichita, KS -6%
Little Rock, AR -6%
Macon, GA -6%
Springfield, MO -6%
Elkhart, IN -6%
Waco, TX -7%
Charleston, SC -7%
Midland, TX -7%
Austin, TX -7%
Lubbock, TX -7%
Tyler, TX -7%
Corpus Christi, TX -8%
Fort Smith, AR-OK -8%
Tulsa, OK -9%
Memphis, TN-MS-AR -9%
Rochester, NY -9%
San Angelo, TX -10%
Lafayette, IN -10%
Abilene, TX -11%
San Antonio, TX -11%
Huntsville, AL -11%
Longview, TX -11%
Odessa, TX -12%
Montgomery, AL -12%
Houston, TX -14%
Fort Worth, TX -15%
Beaumont, TX -15%
Dallas, TX -16%
Killeen, TX -16%
El Paso, TX -18%
College Station, TX -23%
Link to original article
Most Overvalued Housing Markets
Latest analysis of 299 markets: See how your hometown ranks.
By Les Christie, CNNMoney.com staff writer
January 3, 2006: 2:33 AM EST
NEW YORK (CNNMoney.com) - Sixty-five of the nation’s 299 biggest real estate markets are severely overpriced and subject to possible price corrections.
That’s according to the latest (third quarter) Housing Market Analysis conducted by National City Corp, a financial holding company, in conjunction with Global Insight, a financial information provider.
The report named Naples, Florida as the most overvalued of all housing markets in the United States. A single-family, median-priced home there sells for $329,970, 84 percent more than what it should cost — $180,956 — according to the analysis.
National City arrives at its estimates of what the typical house in these markets should cost by examining the town’s population densities, local interest rates, and income levels. It also factors in historical premiums and discounts for each area.
Other markets deemed wildly overpriced included Merced, California (by 77 percent), Salinas, California (75 percent), and Port St. Lucie, Florida (72 percent).
Undervalued markets were College Station (-23 percent), El Paso (-18 percent), and Killeen (-16 percent), all in Texas. That state dominated the discounted markets list with nine of the 10 most undervalued housing markets. Montgomery, Alabama was No. 8 among the undervalued markets.
The data did produce some evidence of prices moderating, according to National City’s chief economist, Richard DeKaser.
In Massachusetts, for example, one of the hottest of housing markets over the past few years, each of the seven housing markets analyzed was still overvalued. Prices, however, had fallen in all seven. That would indicate the state is trending back toward normal valuations.
The same could not be said of Florida. The Sunshine State had 15 different markets on the list of extremely overpriced metro areas and all 15 had grown more overpriced during the quarter.
Amidst all these hot and cold markets there were a few judged, like Goldilock’s porridge, “just right.” They included Albuquerque New Mexico, Dayton Ohio, and Omaha Nebraska. In all those towns actually selling prices closely tracked the expected values.
Areas over-valued
Naples, FL +84%
Merced, CA +77%
Salinas, CA +75%
Port St. Lucie, FL +72%
Stockton, CA +72%
Madera, CA +70%
Santa Barbara, CA +70%
Modesto, CA +67%
Napa, CA +65%
Riverside, CA +65%
Medford, OR +64%
Sacramento, CA +61%
Atlantic City, NJ +59%
Chico, CA +59%
Fresno, CA +58%
West Palm Beach, FL +57%
Redding, CA +56%
Santa Rosa, CA +56%
Bend, OR +56%
Sarasota, FL +56%
Miami, FL +55%
Oxnard, CA +55%
Vero Beach, FL +54%
Los Angeles, CA +54%
Fort Lauderdale, FL +53%
Vallejo, CA +53%
San Luis Obispo, CA +53%
Cape Coral, FL +52%
Bakersfield, CA +51%
Palm Bay, FL +49%
Barnstable Town, MA +48%
Oakland, CA +47%
Ocean City, NJ +47%
Prescott, AZ +46%
Panama City, FL +46%
San Diego, CA +46%
Visalia, CA +45%
San Jose, CA +44%
Deltona, FL +44%
Santa Cruz, CA +44%
Santa Ana, CA +44%
Bellingham, WA +43%
Fort Walton Beach, FL +43%
Nassau-Suffolk, NY +43%
Poughkeepsie, NY +39%
Reno, NV +38%
Las Vegas, NV +38%
Kingston, NY +38%
Washington, DC-VA-MD-WV +37%
Bethesda, MD +36%
Providence, RI-MA +35%
San Francisco, CA +35%
St. George, UT +35%
Ocala, FL +35%
Phoenix, AZ +35%
Portland, OR-WA +35%
Eugene, OR +34%
Tampa, FL +34%
Pensacola, FL +33%
Orlando, FL +33%
Grand Junction, CO +31%
Honolulu, HI +31%
Edison, NJ +31%
Duluth, MN-WI +31%
Jacksonville, FL +31%
Virginia Beach, VA-NC +29%
Worcester, MA +29%
Portland, ME +29%
Flagstaff, AZ +29%
Essex County, MA +28%
Baltimore, MD +28%
Charlottesville, VA +28%
Charleston, WV +28%
Tucson, AZ +27%
Newark, NJ-PA +27%
New York, NY-NJ +27%
Monroe, MI +26%
Bay City, MI +26%
Flint, MI +26%
Olympia, WA +26%
Wilmington, NC +25%
Tacoma, WA +25%
Salem, OR +25%
Minneapolis, MN-WI +24%
Asheville, NC +24%
Seattle, WA +24%
Mount Vernon, WA +24%
Jackson, MI +24%
Longview, WA +24%
Lakeland, FL +23%
Brunswick, GA +23%
Gainesville, FL +23%
Manchester, NH +23%
Bremerton, WA +22%
Tallahassee, FL +22%
Holland, MI +22%
Niles, MI +21%
Savannah, GA +21%
Santa Fe, NM +21%
Chicago, IL +21%
Eau Claire, WI +20%
Vineland, NJ +20%
Trenton, NJ +20%
Rockingham, NH +20%
Anchorage, AK +20%
Casper, WY +20%
Racine, WI +20%
Battle Creek, MI +20%
Springfield, MA +19%
Detroit, MI +19%
Greeley, CO +19%
Burlington, VT +18%
Wilmington, DE-MD-NJ +18%
Camden, NJ +18%
Boston, MA +18%
Lansing, MI +18%
Boulder, CO +18%
Michigan City, IN +17%
Ann Arbor, MI +17%
York, PA +17%
Milwaukee, WI +16%
Madison, WI +16%
Philadelphia, PA +15%
Spokane, WA +15%
Warren, MI +15%
Norwich, CT +15%
Richmond, VA +15%
Corvallis, OR +14%
Grand Rapids, MI +14%
Muskegon, MI +14%
Lake-Kenosha, IL-WI +14%
Albany, NY +13%
Allentown, PA-NJ +13%
Saginaw, MI +13%
Harrisonburg, VA +13%
La Crosse, WI-MN +13%
Boise City, ID +13%
Pittsfield, MA +13%
Wenatchee, WA +13%
Rockford, IL +13%
Farmington, NM +13%
Cambridge, MA +12%
New Orleans, LA +12%
Janesville, WI +11%
New Haven, CT +11%
Gainesville, GA +11%
Kalamazoo, MI +11%
Roanoke, VA +11%
Fayetteville, AR-MO +11%
Canton, OH +11%
Lancaster, PA +10%
Colorado Springs, CO +10%
Denver, CO +10%
Peoria, IL +10%
Reading, PA +10%
Fort Collins, CO +10%
Waterloo, IA +9%
Gary, IN +9%
St. Louis, MO-IL +9%
Champaign, IL +9%
Yakima, WA +9%
Dalton, GA +9%
Sheboygan, WI +9%
Toledo, OH +9%
Green Bay, WI +8%
Springfield, OH +8%
Youngstown, OH-PA +8%
Lynchburg, VA +8%
Davenport, IA-IL +7%
St. Joseph, MO-KS +7%
Mansfield, OH +7%
Hickory, NC +6%
Fond du Lac, WI +6%
Cleveland, OH +6%
Bridgeport, CT +6%
Billings, MT +5%
Chattanooga, TN-GA +5%
Idaho Falls, ID +5%
Cheyenne, WY +5%
Pueblo, CO +5%
Dubuque, IA +4%
Topeka, KS +4%
Hartford, CT +4%
Kansas City, MO-KS +4%
Akron, OH +4%
Wausau, WI +4%
Salt Lake City, UT +4%
Scranton, PA +4%
Lexington, KY +4%
Bismarck, ND +4%
Athens, GA +3%
Fargo, ND-MN +3%
Sandusky, OH +3%
Knoxville, TN +3%
Bloomington, IN +3%
Anderson, IN +3%
Lafayette, LA +3%
Louisville, KY-IN +3%
Durham, NC +2%
Atlanta, GA +2%
Areas under-valued Erie, PA +2%
Columbia, MO +2%
Columbus, OH +2%
Harrisburg, PA +2%
Kennewick, WA +2%
Provo, UT +2%
Lima, OH +1%
Utica, NY +1%
Bowling Green, KY +1%
Hattiesburg, MS +1%
Decatur, IL +1%
Columbia, SC +1%
Cincinnati, OH-KY-IN +1%
Rochester, MN 0%
Greenville, SC 0%
Oshkosh, WI 0%
Lawrence, KS 0%
Las Cruces, NM 0%
Omaha, NE-IA 0%
Appleton, WI 0%
Albuquerque, NM 0%
Burlington, NC 0%
Ogden, UT 0%
Baton Rouge, LA 0%
Dayton, OH 0%
Amarillo, TX 0%
Alexandria, LA 0%
Kokomo, IN -1%
Nashville, TN -1%
Winston-Salem, NC -1%
Spartanburg, SC -1%
Florence, SC -1%
Birmingham, AL -1%
Sherman, TX -1%
Jackson, MS -1%
Houma, LA -1%
Pittsburgh, PA -1%
Binghamton, NY -1%
Monroe, LA -2%
Columbus, GA-AL -2%
Sioux Falls, SD -2%
Des Moines, IA -2%
Columbus, IN -2%
Lincoln, NE -2%
Mobile, AL -2%
Greensboro, NC -2%
Albany, GA -2%
Augusta, GA-SC -2%
Raleigh, NC -3%
Owensboro, KY -3%
Evansville, IN-KY -3%
Bloomington, IL -3%
Shreveport, LA -3%
Cedar Rapids, IA -3%
Greenville, NC -4%
Syracuse, NY -4%
South Bend, IN-MI -4%
Indianapolis, IN -5%
Springfield, IL -5%
Rocky Mount, NC -5%
Oklahoma City, OK -5%
Jefferson City, MO -5%
Buffalo, NY -5%
Fort Wayne, IN -5%
Charlotte, NC-SC -6%
Warner Robins, GA -6%
Iowa City, IA -6%
Decatur, AL -6%
Wichita, KS -6%
Little Rock, AR -6%
Macon, GA -6%
Springfield, MO -6%
Elkhart, IN -6%
Waco, TX -7%
Charleston, SC -7%
Midland, TX -7%
Austin, TX -7%
Lubbock, TX -7%
Tyler, TX -7%
Corpus Christi, TX -8%
Fort Smith, AR-OK -8%
Tulsa, OK -9%
Memphis, TN-MS-AR -9%
Rochester, NY -9%
San Angelo, TX -10%
Lafayette, IN -10%
Abilene, TX -11%
San Antonio, TX -11%
Huntsville, AL -11%
Longview, TX -11%
Odessa, TX -12%
Montgomery, AL -12%
Houston, TX -14%
Fort Worth, TX -15%
Beaumont, TX -15%
Dallas, TX -16%
Killeen, TX -16%
El Paso, TX -18%
College Station, TX -23%
Saturday, December 03, 2005
Existing-Home Sales Fell By 2.7% in Latest Month
From The Wall Street Journal Online
Sales of previously owned homes fell by 2.7% in October as the housing market continues to signal that the boom of the past five years is ringing more hollow these days.
The National Association of Realtors reported Monday that sales of existing homes and condominiums declined by 2.7% last month to a seasonally adjusted annual rate of 7.09 million units. The decline would have been an even larger 3.2% without a spurt in sales in areas where people displaced by the Gulf Coast hurricanes have moved.
Even with the decline in sales, the median price of an existing home sold last month rose by 16.6% to $218,000 compared to the median -- or midpoint -- price in October 2004.
"This signals that the housing sector has likely passed its peak. The boom is winding down to an expansion," said David Lereah, chief economist for the Realtors.
The 2.7% drop in sales of existing homes would have been a larger 3.2% decline without a boost in activity from people relocating after Hurricanes Katrina and Rita devastated the Gulf Coast. The boost in sales outside of the hurricane areas offset sales declines in cities hardest hit by the storms.
Sales surged by 83% in Baton Rouge, La.; 32% in Mobile, Ala., and 14% in Houston. By contrast, sales were down 42% in New Orleans and 44% in Beaumont, Texas.
Mr. Lereah predicted that housing activity would cool further in coming months if, as expected, the Federal Reserve keeps pushing interest rates higher to combat rising inflation pressures that have been triggered by a surge in energy prices.
Those price increases have contributed to a rise in mortgage rates although rates retreated a bit last week to 6.28% from 6.37% the previous week, which had been the highest level in two years.
"We feel confident that housing is landing softly as rates continue to rise," Mr. Lereah said.
Some economists had expressed fears that rising mortgage rates could burst the housing bubble much as a speculative bubble in Internet stock prices burst in early 2000, sending shockwaves throughout the economy.
The 16.6% increase in the median sales price was the biggest year-over-year price increase since a 17.2% jump in July 1979.
By region of the country, the biggest sales decline in October occurred in the Northeast, a drop of 7.4%. Sales were down 1.9% in the Midwest and 1.2% in the West. Sales were down 1.8% in the South despite the big gains in areas where displaced homeowners relocated.
Sales of previously owned homes fell by 2.7% in October as the housing market continues to signal that the boom of the past five years is ringing more hollow these days.
The National Association of Realtors reported Monday that sales of existing homes and condominiums declined by 2.7% last month to a seasonally adjusted annual rate of 7.09 million units. The decline would have been an even larger 3.2% without a spurt in sales in areas where people displaced by the Gulf Coast hurricanes have moved.
Even with the decline in sales, the median price of an existing home sold last month rose by 16.6% to $218,000 compared to the median -- or midpoint -- price in October 2004.
"This signals that the housing sector has likely passed its peak. The boom is winding down to an expansion," said David Lereah, chief economist for the Realtors.
The 2.7% drop in sales of existing homes would have been a larger 3.2% decline without a boost in activity from people relocating after Hurricanes Katrina and Rita devastated the Gulf Coast. The boost in sales outside of the hurricane areas offset sales declines in cities hardest hit by the storms.
Sales surged by 83% in Baton Rouge, La.; 32% in Mobile, Ala., and 14% in Houston. By contrast, sales were down 42% in New Orleans and 44% in Beaumont, Texas.
Mr. Lereah predicted that housing activity would cool further in coming months if, as expected, the Federal Reserve keeps pushing interest rates higher to combat rising inflation pressures that have been triggered by a surge in energy prices.
Those price increases have contributed to a rise in mortgage rates although rates retreated a bit last week to 6.28% from 6.37% the previous week, which had been the highest level in two years.
"We feel confident that housing is landing softly as rates continue to rise," Mr. Lereah said.
Some economists had expressed fears that rising mortgage rates could burst the housing bubble much as a speculative bubble in Internet stock prices burst in early 2000, sending shockwaves throughout the economy.
The 16.6% increase in the median sales price was the biggest year-over-year price increase since a 17.2% jump in July 1979.
By region of the country, the biggest sales decline in October occurred in the Northeast, a drop of 7.4%. Sales were down 1.9% in the Midwest and 1.2% in the West. Sales were down 1.8% in the South despite the big gains in areas where displaced homeowners relocated.
New Requirements for AC Units
New AC units must meet higher energy standard
Minimum efficiency standards for air conditioners are on the rise. Starting Jan. 23, 2006, air conditioning manufacturers must produce units with a seasonal energy efficiency ratio (SEER) rating of at least 13. The higher the SEER rating, the more energy efficient the air conditioner. The current minimum is SEER 10. The new standard does not prevent a consumer from repairing an existing unit with a SEER lower than 13, nor are homeowners required to replace or upgrade existing air conditioners that have a SEER rating lower than 13. However, replacement parts for lower-efficiency units may become scarce, and a larger, more-efficient new air conditioner may necessitate structural modifications such as a larger pad or additional support.
Residential service contracts may not cover some of the additional costs necessary for a property owner to replace an older air conditioner with a new 13 SEER unit. The specific terms of the residential service contract will specify the extent of any coverage, as well as any costs to the property owner.
Minimum efficiency standards for air conditioners are on the rise. Starting Jan. 23, 2006, air conditioning manufacturers must produce units with a seasonal energy efficiency ratio (SEER) rating of at least 13. The higher the SEER rating, the more energy efficient the air conditioner. The current minimum is SEER 10. The new standard does not prevent a consumer from repairing an existing unit with a SEER lower than 13, nor are homeowners required to replace or upgrade existing air conditioners that have a SEER rating lower than 13. However, replacement parts for lower-efficiency units may become scarce, and a larger, more-efficient new air conditioner may necessitate structural modifications such as a larger pad or additional support.
Residential service contracts may not cover some of the additional costs necessary for a property owner to replace an older air conditioner with a new 13 SEER unit. The specific terms of the residential service contract will specify the extent of any coverage, as well as any costs to the property owner.
Fannie Mae, Freddie Mac, and FHA increase loan limits for 2006
Fannie Mae and Freddie Mac will raise their single-family conforming loan limit to $417,000 starting on Jan. 1, 2006. (The current limit is $359,650.) Loan limits for two-, three-, and four-family properties will also increase. Freddie Mac estimates that about half a million more homebuyers will benefit from the new limit, saving as much as $24,700 over the life of the loan with lower-cost conforming financing. These increases will automatically boost the FHA's floor limit to $200,160 and the high limit to as high as $362,790, depending on the county.
Fannie Mae and Freddie Mac will raise their single-family conforming loan limit to $417,000 starting on Jan. 1, 2006. (The current limit is $359,650.) Loan limits for two-, three-, and four-family properties will also increase. Freddie Mac estimates that about half a million more homebuyers will benefit from the new limit, saving as much as $24,700 over the life of the loan with lower-cost conforming financing. These increases will automatically boost the FHA's floor limit to $200,160 and the high limit to as high as $362,790, depending on the county.
Tuesday, November 15, 2005
Reversed Mortgage
I just found very interesting article, which I want to share with you all.
Handy reverse mortgage book reveals consumer choices
Author answers most basic questions effectively
Tuesday, November 15, 2005
by Robert J. Bruss
from Inman News
If you or your parents are a senior citizen homeowner over 62, "Pocket Idiot's Guide to Reverse Mortgages" by Jennifer A. Pokorney should be required reading. I've read lots of books about reverse mortgages, and I've written articles on this important topic, but I have never before found such a concise source that compares reverse mortgage choices in an easy-to-understand format.
Pokorney, a branch manager for a major mortgage lender who specializes in reverse mortgages, speaks with authority and writes with practical advice for senior citizen homeowners. Just in case you are not familiar with reverse mortgages, these financial devices pay money to senior citizen homeowners who are at least age 62. No repayment is required until the homeowner sells, moves out, or dies.
This new book has the best comparisons I've seen of the FHA, Fannie Mae and Financial Freedom Plan reverse mortgages. Pokorney doesn't hesitate to say which type of reverse mortgage is best, depending on the many typical situations she explains.
The basic rule is that reverse mortgage amounts available depend on the borrower's age, the home's appraised market value, and the type of mortgage chosen. Although FHA reverse mortgages are the most popular, the author explains when the Fannie Mae and Financial Freedom offerings are the best choice.
This handy guidebook, in a small format of only 7 inches by 4 inches, has just a few key points on each page. Pokorney uses lots of examples to relate the information she explains to practical senior citizen homeowner situations. Her comparison charts are especially simple and easy to understand.
Although I already know quite a bit about reverse mortgages, I learned new information, such as these mortgages are available on New York City co-ops but not elsewhere. Also I discovered why reverse mortgages are "declined" on some properties, mostly due to repair issues or where the residence is unusual or substandard. I especially enjoyed the author's explanation of how to best handle lender-required repairs.
The author's explanations of the differences between FHA monthly interest rate adjustments and FHA annual adjustments are the best and easiest to understand that I've seen. She has a knack for simplifying what can be confusing.
With a little study, this book will answer most basic reverse mortgage questions senior citizen homeowners and their concerned friends and relatives may have. It explains all the choices, such as lifetime income, credit lines (except in Texas), lump sums, and combinations that the homeowner can select.
A valuable feature is "The least you need to know" summary at the end of each chapter. This quick review highlights the most important topics explained in that chapter.
A key topic that Pokorney doesn't hesitate to tackle is the issue of up-front costs. She explains reverse mortgage costs are paid at the time of obtaining the mortgage and they might seem high depending on the mortgage amount. But she emphasizes loan representatives expect to be paid (from the loan proceeds, not from the borrower's pocket) and that's only fair.
However, the one topic that the author only mentions briefly is Fannie Mae's Home Keeper Reverse Mortgage for home purchase. This very special type of reverse mortgage is rarely used (perhaps because most senior citizen home buyers don't know about it). But it can enable seniors to buy a retirement home and never have to worry about mortgage payments.
Chapter topics include "What is a Reverse Mortgage?" "Is a Reverse Mortgage Right for You?" "Single-Purpose Mortgages"; "Home Equity Conversion Mortgage"; "Home Keeper"; "Cash Account"; "Applying for a Reverse Mortgage"; "The Approval Process"; "The Property Appraisal"; and "Living with a Reverse Mortgage."
This new book can't be recommended too highly if you are interested in senior citizen reverse mortgages that pay money to the homeowner and require no monthly repayments. The author obviously knows her topic very well. She explains it in a direct, simple format, which is easy to comprehend. On my scale of one to 10, this well-written book rates an off-the-chart 12.
"Pocket Idiot's Guide to Reverse Mortgages," by Jennifer A. Pokorny (Alpha-Penguin Group, New York), 2005, $9.95, 152 pages; Available in stock or by special order at local bookstores, public libraries, and www.amazon.com.
Handy reverse mortgage book reveals consumer choices
Author answers most basic questions effectively
Tuesday, November 15, 2005
by Robert J. Bruss
from Inman News
If you or your parents are a senior citizen homeowner over 62, "Pocket Idiot's Guide to Reverse Mortgages" by Jennifer A. Pokorney should be required reading. I've read lots of books about reverse mortgages, and I've written articles on this important topic, but I have never before found such a concise source that compares reverse mortgage choices in an easy-to-understand format.
Pokorney, a branch manager for a major mortgage lender who specializes in reverse mortgages, speaks with authority and writes with practical advice for senior citizen homeowners. Just in case you are not familiar with reverse mortgages, these financial devices pay money to senior citizen homeowners who are at least age 62. No repayment is required until the homeowner sells, moves out, or dies.
This new book has the best comparisons I've seen of the FHA, Fannie Mae and Financial Freedom Plan reverse mortgages. Pokorney doesn't hesitate to say which type of reverse mortgage is best, depending on the many typical situations she explains.
The basic rule is that reverse mortgage amounts available depend on the borrower's age, the home's appraised market value, and the type of mortgage chosen. Although FHA reverse mortgages are the most popular, the author explains when the Fannie Mae and Financial Freedom offerings are the best choice.
This handy guidebook, in a small format of only 7 inches by 4 inches, has just a few key points on each page. Pokorney uses lots of examples to relate the information she explains to practical senior citizen homeowner situations. Her comparison charts are especially simple and easy to understand.
Although I already know quite a bit about reverse mortgages, I learned new information, such as these mortgages are available on New York City co-ops but not elsewhere. Also I discovered why reverse mortgages are "declined" on some properties, mostly due to repair issues or where the residence is unusual or substandard. I especially enjoyed the author's explanation of how to best handle lender-required repairs.
The author's explanations of the differences between FHA monthly interest rate adjustments and FHA annual adjustments are the best and easiest to understand that I've seen. She has a knack for simplifying what can be confusing.
With a little study, this book will answer most basic reverse mortgage questions senior citizen homeowners and their concerned friends and relatives may have. It explains all the choices, such as lifetime income, credit lines (except in Texas), lump sums, and combinations that the homeowner can select.
A valuable feature is "The least you need to know" summary at the end of each chapter. This quick review highlights the most important topics explained in that chapter.
A key topic that Pokorney doesn't hesitate to tackle is the issue of up-front costs. She explains reverse mortgage costs are paid at the time of obtaining the mortgage and they might seem high depending on the mortgage amount. But she emphasizes loan representatives expect to be paid (from the loan proceeds, not from the borrower's pocket) and that's only fair.
However, the one topic that the author only mentions briefly is Fannie Mae's Home Keeper Reverse Mortgage for home purchase. This very special type of reverse mortgage is rarely used (perhaps because most senior citizen home buyers don't know about it). But it can enable seniors to buy a retirement home and never have to worry about mortgage payments.
Chapter topics include "What is a Reverse Mortgage?" "Is a Reverse Mortgage Right for You?" "Single-Purpose Mortgages"; "Home Equity Conversion Mortgage"; "Home Keeper"; "Cash Account"; "Applying for a Reverse Mortgage"; "The Approval Process"; "The Property Appraisal"; and "Living with a Reverse Mortgage."
This new book can't be recommended too highly if you are interested in senior citizen reverse mortgages that pay money to the homeowner and require no monthly repayments. The author obviously knows her topic very well. She explains it in a direct, simple format, which is easy to comprehend. On my scale of one to 10, this well-written book rates an off-the-chart 12.
"Pocket Idiot's Guide to Reverse Mortgages," by Jennifer A. Pokorny (Alpha-Penguin Group, New York), 2005, $9.95, 152 pages; Available in stock or by special order at local bookstores, public libraries, and www.amazon.com.
Saturday, November 12, 2005
Right to Choose Electric Service Provider
In Texas you have a right to choose the electric provider, just like you
choose your long distance phone company. You can buy your electricity from companies that compete for your business. Some electric providers offer lower rates, wind or solar power, or the promise of better customer service.
Shop and compare. Make sure you choose the electric provider that's right for you. If you do choose to switch, you are one mouse click away from a new electric provider. Want more information? Go to http://www.powertochose.org.
choose your long distance phone company. You can buy your electricity from companies that compete for your business. Some electric providers offer lower rates, wind or solar power, or the promise of better customer service.
Shop and compare. Make sure you choose the electric provider that's right for you. If you do choose to switch, you are one mouse click away from a new electric provider. Want more information? Go to http://www.powertochose.org.
Friday, November 11, 2005
Why Loss Of Homeowner Tax Benefits Will Cause Real Estate Bust
by Blanche Evans
In a moving letter to Treasury Secretary John Snow, Tom Stevens, president-elect of the National Association of Realtors pleads for extreme caution in deliberations to include the elimination of the mortgage interest deduction in budgetary and legislative proposals. Doug Duncan, chief economist for the Mortgage Bankers Association explains in plain terms why losing this important homeowner tax benefit will throw the housing market into a bust.
Stevens writes, "Now that the President's Advisory Panel on Federal Tax Reform has completed its work, the U.S. Department of the Treasury will be working to convert the Panel's recommendations into budgetary and legislative proposals. The National Association of Realtors (NAR) urges extreme caution in your deliberations, and we ask you to preserve the mortgage interest deduction in any proposals to reform the tax code."
He adds, "America's Realtors are deeply concerned about the Tax Reform Panel's recommendations."
"Housing and the overall real estate market have been the engine of our nation's economy and the heart of America's families. Eliminating the mortgage interest deduction would de-value homes across America, hurting all of America's families. Moreover, such tax reform would place the largest burden on "middle America" -- those who have achieved homeownership through mortgage financing."
"NAR estimates that the value of the nation's residential property could decline 15 percent or more, if the tax reform panel's proposal to convert the mortgage interest deduction to a tax credit takes effect. Entirely eliminating the tax deduction for second homes would have a negative impact on at least 5 percent of the gross domestic product, since second homes accounted for 35 percent of all home sales in 2004."
"NAR is undertaking further research to ascertain the full impact of the tax Panel's proposals on all types of real estate and state and local property taxes. However, our conclusion will not change. Realtors believe the mortgage interest deduction is the single most important tax provision for our nation and our families. Diminishing or eliminating the mortgage interest deduction would hurt all families, the housing market and our national economy."
"On behalf of our 1.2 million members who are involved in all aspects of real estate, I would like to meet with you, at your earliest possible convenience, to discuss potential tax reforms proposals. With your help, we can preserve the mortgage interest deduction for the next generation of homeowners and keep our nation strong and growing."
Explains Doug Duncan, chief economist for the Mortgage Bankers Association (MBA,) MBAA.org, "Quite simply what will happen is that the interest expense for borrowing money will rise and that will reduce demand, so the demand side will fall. Second, the value of the tax deduction is capitalized into the price of the house, so if you remove it, the house price will fall by the capitalized value of that deduction."
By how much? It's hard to estimate, but economists suggest between 10 to 20 percent. From a theoretical perspective, it's possible only to guess.
As far as the effects of the real estate tax deduction, Duncan says it is a tax increase "whether you have a mortgage or not, so that will boost the amount by which properties fall, particularly in high property tax states like California and New Jersey. If you own an existing home, it will be fairly dramatic. That won't be the capitalized value -- it would be the carrying costs of the house, so if you eliminate the deductibility of real estate taxes, your total tax load rises and you'll be paying a higher real tax rate on owning that house and that will reduce demand and house prices will fall."
The effects of the loss of the property tax deduction are also difficult to calculate, he says. "They will be more localized because property taxes are determined at local levels."
Lawrence Yun, senior economist with the NAR says, "Residential housing is about 15 percent of the gross domestic product, including new homes, workers to build the homes, income generated from Realtor services, title services, etc., but what is important to realize the housing market has supported consumer spending. Home prices have risen, and homeowners have felt wealthy. Consumer spending is two-thirds of the gross domestic product, and it's been the rising home prices that have supported that. A plunge of 15 percent in home prices would be devastating and put the economy into a recession. It could have severe effects and could put a lot of lenders under water because the collateral value is below the loan amount. You would put financial institutions under stress, and the effects could last for quite some time."
Depression?
"It would be one of the sharpest recessions for quite some time," Yun hedges.
About the panel's recommendations, Yun acknowledges that there has been no model of the potential disaster that could come from reducing such homeowner tax benefits.
"They realize they are taking away some of the benefit going to the housing sector, and many are saying the housing industry has been subsidized, so let's take that away, but for the short term -- up to five years -- it could be devastating to the economy," he explains. "Flatter taxes or consumption-based taxes should be efficient for the economy, but what is being overlooked is the short-term effects. It's unfair to change the rules in the middle of the game and this 15 percent hit for homeowners is a tax increase. That's very unfair because homeowners didn't anticipate when they bought that there was a possibility this would take place."
Another thing that is suggested is that the people who don't have mortgages or who pay low property taxes won't be hurt. This simply isn't true, according to Yun.
"That is wrong way to look at it," he says. "One can think of the current tax benefit that is accruing, and if you take that away, people will agree home prices will decline. But if you have two identical homes for sale on the same street, one being sold by a person who itemizes and the other being sold by a person who doesn't itemize, it is inconceivable that the home prices will be different because the owner itemizes or doesn't itemize. The owners who don't itemize will lose appreciation, too."
"The only comforting thing its I really don't think it would fly," says Yun. "Seventy percent of the nation are homeowners, and in a democracy it is impossible for any politician to go after 70 percent of the population. People need to be educated and informed of the consequences."
The panel said it was aware that its recommendations are "bold," and Treasury Secretary Snow has said he did not know what ideas the administration would embrace after the Treasury makes it recommendations.
"Now it's up to us," Snow said. The Treasury Department will "take the report, review it carefully, understand the implications and use the report as a starting point for recommendations that we will make to the President."
"The effort to reform the tax code is noble in its purpose, but it requires political willpower," the group said Tuesday in a letter to Snow. "Many stand waiting to defend their breaks, deductions and loopholes, and to defeat our efforts."
An AP report suggested that "members of the panel urged taxpayers and lawmakers to look at the whole plan, not just individual components," so they would know that "withdrawn tax breaks" would be replaced by "simpler benefits."
As the tax-writing House Ways and Means and Senate Finance committees will review the recommendations, so will the NAR. The Board of Directors has pledged to authorize a report on the financial impact of the loss of the mortgage interest rate deduction.
In a moving letter to Treasury Secretary John Snow, Tom Stevens, president-elect of the National Association of Realtors pleads for extreme caution in deliberations to include the elimination of the mortgage interest deduction in budgetary and legislative proposals. Doug Duncan, chief economist for the Mortgage Bankers Association explains in plain terms why losing this important homeowner tax benefit will throw the housing market into a bust.
Stevens writes, "Now that the President's Advisory Panel on Federal Tax Reform has completed its work, the U.S. Department of the Treasury will be working to convert the Panel's recommendations into budgetary and legislative proposals. The National Association of Realtors (NAR) urges extreme caution in your deliberations, and we ask you to preserve the mortgage interest deduction in any proposals to reform the tax code."
He adds, "America's Realtors are deeply concerned about the Tax Reform Panel's recommendations."
"Housing and the overall real estate market have been the engine of our nation's economy and the heart of America's families. Eliminating the mortgage interest deduction would de-value homes across America, hurting all of America's families. Moreover, such tax reform would place the largest burden on "middle America" -- those who have achieved homeownership through mortgage financing."
"NAR estimates that the value of the nation's residential property could decline 15 percent or more, if the tax reform panel's proposal to convert the mortgage interest deduction to a tax credit takes effect. Entirely eliminating the tax deduction for second homes would have a negative impact on at least 5 percent of the gross domestic product, since second homes accounted for 35 percent of all home sales in 2004."
"NAR is undertaking further research to ascertain the full impact of the tax Panel's proposals on all types of real estate and state and local property taxes. However, our conclusion will not change. Realtors believe the mortgage interest deduction is the single most important tax provision for our nation and our families. Diminishing or eliminating the mortgage interest deduction would hurt all families, the housing market and our national economy."
"On behalf of our 1.2 million members who are involved in all aspects of real estate, I would like to meet with you, at your earliest possible convenience, to discuss potential tax reforms proposals. With your help, we can preserve the mortgage interest deduction for the next generation of homeowners and keep our nation strong and growing."
Explains Doug Duncan, chief economist for the Mortgage Bankers Association (MBA,) MBAA.org, "Quite simply what will happen is that the interest expense for borrowing money will rise and that will reduce demand, so the demand side will fall. Second, the value of the tax deduction is capitalized into the price of the house, so if you remove it, the house price will fall by the capitalized value of that deduction."
By how much? It's hard to estimate, but economists suggest between 10 to 20 percent. From a theoretical perspective, it's possible only to guess.
As far as the effects of the real estate tax deduction, Duncan says it is a tax increase "whether you have a mortgage or not, so that will boost the amount by which properties fall, particularly in high property tax states like California and New Jersey. If you own an existing home, it will be fairly dramatic. That won't be the capitalized value -- it would be the carrying costs of the house, so if you eliminate the deductibility of real estate taxes, your total tax load rises and you'll be paying a higher real tax rate on owning that house and that will reduce demand and house prices will fall."
The effects of the loss of the property tax deduction are also difficult to calculate, he says. "They will be more localized because property taxes are determined at local levels."
Lawrence Yun, senior economist with the NAR says, "Residential housing is about 15 percent of the gross domestic product, including new homes, workers to build the homes, income generated from Realtor services, title services, etc., but what is important to realize the housing market has supported consumer spending. Home prices have risen, and homeowners have felt wealthy. Consumer spending is two-thirds of the gross domestic product, and it's been the rising home prices that have supported that. A plunge of 15 percent in home prices would be devastating and put the economy into a recession. It could have severe effects and could put a lot of lenders under water because the collateral value is below the loan amount. You would put financial institutions under stress, and the effects could last for quite some time."
Depression?
"It would be one of the sharpest recessions for quite some time," Yun hedges.
About the panel's recommendations, Yun acknowledges that there has been no model of the potential disaster that could come from reducing such homeowner tax benefits.
"They realize they are taking away some of the benefit going to the housing sector, and many are saying the housing industry has been subsidized, so let's take that away, but for the short term -- up to five years -- it could be devastating to the economy," he explains. "Flatter taxes or consumption-based taxes should be efficient for the economy, but what is being overlooked is the short-term effects. It's unfair to change the rules in the middle of the game and this 15 percent hit for homeowners is a tax increase. That's very unfair because homeowners didn't anticipate when they bought that there was a possibility this would take place."
Another thing that is suggested is that the people who don't have mortgages or who pay low property taxes won't be hurt. This simply isn't true, according to Yun.
"That is wrong way to look at it," he says. "One can think of the current tax benefit that is accruing, and if you take that away, people will agree home prices will decline. But if you have two identical homes for sale on the same street, one being sold by a person who itemizes and the other being sold by a person who doesn't itemize, it is inconceivable that the home prices will be different because the owner itemizes or doesn't itemize. The owners who don't itemize will lose appreciation, too."
"The only comforting thing its I really don't think it would fly," says Yun. "Seventy percent of the nation are homeowners, and in a democracy it is impossible for any politician to go after 70 percent of the population. People need to be educated and informed of the consequences."
The panel said it was aware that its recommendations are "bold," and Treasury Secretary Snow has said he did not know what ideas the administration would embrace after the Treasury makes it recommendations.
"Now it's up to us," Snow said. The Treasury Department will "take the report, review it carefully, understand the implications and use the report as a starting point for recommendations that we will make to the President."
"The effort to reform the tax code is noble in its purpose, but it requires political willpower," the group said Tuesday in a letter to Snow. "Many stand waiting to defend their breaks, deductions and loopholes, and to defeat our efforts."
An AP report suggested that "members of the panel urged taxpayers and lawmakers to look at the whole plan, not just individual components," so they would know that "withdrawn tax breaks" would be replaced by "simpler benefits."
As the tax-writing House Ways and Means and Senate Finance committees will review the recommendations, so will the NAR. The Board of Directors has pledged to authorize a report on the financial impact of the loss of the mortgage interest rate deduction.
Saturday, October 29, 2005
Be aware of sex offenders!
Be aware of sex offenders and go to the website: http://www40.familywatchdog.us
This Web site is a " must" to you, if you are concerned about safety of your children, children of your relatives, children of your friends, children of the people you know. Just forward information about this Web site to anyone you know, because through this Web site you can locate registered sex offenders throughout the USA. You will find how many sex offenders lives next to you, next to the school your children are attending, next to your children's friends house. Are you sending your children during the Summer to your relatives in other part of the USA? You can check registered sex offenders living next to their house also. You will know how those individuals look like, because you will be able to see their photos.
Here is just some information from this Web site:
"This service exists for one reason, and one reason only. The founders are tired of reading stories about missing 9 and 10 year old children killed by registered sex offenders, and decided to do something about it.
We invite you to use our free service to locate registered sex offenders in your area. You just enter an address, and we'll show a map. You can click on the squares that appear, and see photos (where available), addresses, and convictions.
Our notification service is very simple. You specify up to three addresses (not zip codes) that you want to watch and the distance around those addresses. We do the rest. We update our data daily from multiple public data sources. As soon as a convicted sex offender registers an address in your area, we will alert you. It's that easy.
We pray for the day that our service is no longer necessary, and look forward to shutting it down. Until then, let Family Watchdog be your family's best friend."
This Web site is a " must" to you, if you are concerned about safety of your children, children of your relatives, children of your friends, children of the people you know. Just forward information about this Web site to anyone you know, because through this Web site you can locate registered sex offenders throughout the USA. You will find how many sex offenders lives next to you, next to the school your children are attending, next to your children's friends house. Are you sending your children during the Summer to your relatives in other part of the USA? You can check registered sex offenders living next to their house also. You will know how those individuals look like, because you will be able to see their photos.
Here is just some information from this Web site:
"This service exists for one reason, and one reason only. The founders are tired of reading stories about missing 9 and 10 year old children killed by registered sex offenders, and decided to do something about it.
We invite you to use our free service to locate registered sex offenders in your area. You just enter an address, and we'll show a map. You can click on the squares that appear, and see photos (where available), addresses, and convictions.
Our notification service is very simple. You specify up to three addresses (not zip codes) that you want to watch and the distance around those addresses. We do the rest. We update our data daily from multiple public data sources. As soon as a convicted sex offender registers an address in your area, we will alert you. It's that easy.
We pray for the day that our service is no longer necessary, and look forward to shutting it down. Until then, let Family Watchdog be your family's best friend."
Wednesday, October 26, 2005
Houston MLS Monthly Press Release
September 2005 Sales
Houston Area Single-Family Home Sales Drop For First Time In 19 Months
Evacuation Due to Hurricane Rita Resulted in Slight Decrease, as Activity Pushed to October
HOUSTON – (October 25, 2005) – The first impact from Hurricanes Katrina and Rita were reflected in September’s real estate sales market, according to statistics released by the Houston Association of REALTORS® Multiple Listing Service. Total sales for single-family homes in Houston decreased by 0.8 percent to 4,910 in September, down from last year’s 4,950. This is the first year-over-year monthly decrease in single- family homes sales in 19 months; however, total property sales still gained compared to last year. Total property sales for the month totaled 5,977, which was a 0.7 percent increase over September 2004. Properties sold during the month reached a total of almost $1.1 billion, a 6.7 percent increase compared to last year’s more than $1.0 billion in September sales. Additionally, year-to-date total property sales reached 59, 525, which is an increase of 8.5 percent over the same period of 2004. “Obviously, the evacuation of Houston and surrounding areas due to Hurricane Rita negatively impacted September real estate sales figures, pushing quite a few closings into October, but we continue to be on course to break last year’s housing sales record,” said Toni C. Nelson, HAR Chair and Division Vice President for Coldwell Banker United, REALTORS®. “It will be interesting to see October’s home sales since one to two weeks of activity was lost in September, but it should be noted that this is an anomaly purely due to the hurricane and not necessarily a sign of a weakening real estate market.”September Monthly Market ComparisonAll listing categories combined, Houston’s overall housing market in September experienced increases across the board including total property sales, average sales prices, median sales price, available inventory, pending sales – those listings expected to close within the next 30 days – and overall total dollar volume on a year-over-year basis.The number of available homes (active listings), at the end of September was 43,767 properties, which was an increase of 1.5 percent versus last September but down somewhat from last month, likely due to hurricane-related impact. Month-end pending sales of properties reached 3,626, which was down 8.1 percent from last year. The months inventory of single-family homes for September was also down to 5.8 months, which remains low, signaling more of a seller’s market and also shows that demand is keeping up with the available supply of homes.
September (all categories)
All Classes
September 2004
September 2005
Percent Change
Total property sales
5,933
5,977
+0.7%
Total dollar volume
$1,026,422,502
$1,094,905,548
+6.7%
Average single-family sales price
$179,217
$191,827
+7.0%
Median single-family sales price
$134,900
$145,000
+7.5%
Active listings
43,122
43,767
+1.5%
Pending sales
3,945
3,626
-8.1%
Months inventory*
6.3
5.8
-8.4%
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
Single-family Homes UpdateThe overall median price of single-family homes reached $145,000 in September, which was an increase of 7.5 percent compared to the prior year, and the average price for single-family homes reached $191,827, which was up 7.0 percent versus the same period last year. The median is a typical market price where half of the homes sold for more and half sold for less than that figure. Both the median and average sales prices were monthly records for September.Houston’s current median price of $145,000 is 31.7 percent less than the national median price, which reached $212,200 in September, according to statistics released by the National Association of REALTORS®. These data continue to show the tremendous value and lower cost of living afforded to Houstonians.Additionally, total sales for single-family homes in Houston decreased by 0.8 percent to 4,910 in September, down from last year’s 4,950. In the first nine months of 2005, 49,271 single-family homes sold, which was an 8.6 percent increase over the 45,351 homes sold during the same period in 2004..HAR is now also reporting existing home statistics for the single-family home segment of the real estate market. For the month of September 2005, existing single-family home sales totaled 4,316, which was a 2.0 percent increase from September 2004, countering the decrease in new home sales through the MLS that drove the overall sales figure lower. The median sales price for existing homes in the Houston area was $140,000, an increase of 9.4 percent compared to the same period last year. The average sales price for the month of $181,820 was an increase of 8.2 percent from last year’s level. Townhouse/Condo UpdateThe overall median price in the townhouse/condo segment in Houston rose slightly by 1.0 percent, from $107,450 in September 2004 to $108,500 last month. The average sales price for which a townhouse or condo sold in the greater Houston area was $140,662 in September 2005, which was a 2.3 percent decrease from the same month last year. Additionally, the number of townhouses and condos that sold in September reversed last month’s trend and increased this month compared to last year’s sales, with 541units being sold last month, versus 536 properties in September 2004. So far, year-to date, 5,245 townhouse/condos have sold, which was a 1.3 percent increase compared to the 5,179 units sold during the same period of 2004.Houston Real Estate Milestones in September
Reached the highest number of properties sold in September.
Reached the highest monthly average sales price for single-family homes in September.
Marked the highest monthly median sales price for single-family homes in September.
The computerized Multiple Listing Service of the Houston Association of REALTORS® includes residential properties and new homes listed by 19,000 REALTORS throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 40,000 properties can be found on the Internet at http://www.har.com.The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.)Founded in 1918, the Houston Association of REALTORS® (HAR) is a 20,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual membership trade association in Houston, as well as the second largest local association/board of REALTORS® in the United States.
Houston Area Single-Family Home Sales Drop For First Time In 19 Months
Evacuation Due to Hurricane Rita Resulted in Slight Decrease, as Activity Pushed to October
HOUSTON – (October 25, 2005) – The first impact from Hurricanes Katrina and Rita were reflected in September’s real estate sales market, according to statistics released by the Houston Association of REALTORS® Multiple Listing Service. Total sales for single-family homes in Houston decreased by 0.8 percent to 4,910 in September, down from last year’s 4,950. This is the first year-over-year monthly decrease in single- family homes sales in 19 months; however, total property sales still gained compared to last year. Total property sales for the month totaled 5,977, which was a 0.7 percent increase over September 2004. Properties sold during the month reached a total of almost $1.1 billion, a 6.7 percent increase compared to last year’s more than $1.0 billion in September sales. Additionally, year-to-date total property sales reached 59, 525, which is an increase of 8.5 percent over the same period of 2004. “Obviously, the evacuation of Houston and surrounding areas due to Hurricane Rita negatively impacted September real estate sales figures, pushing quite a few closings into October, but we continue to be on course to break last year’s housing sales record,” said Toni C. Nelson, HAR Chair and Division Vice President for Coldwell Banker United, REALTORS®. “It will be interesting to see October’s home sales since one to two weeks of activity was lost in September, but it should be noted that this is an anomaly purely due to the hurricane and not necessarily a sign of a weakening real estate market.”September Monthly Market ComparisonAll listing categories combined, Houston’s overall housing market in September experienced increases across the board including total property sales, average sales prices, median sales price, available inventory, pending sales – those listings expected to close within the next 30 days – and overall total dollar volume on a year-over-year basis.The number of available homes (active listings), at the end of September was 43,767 properties, which was an increase of 1.5 percent versus last September but down somewhat from last month, likely due to hurricane-related impact. Month-end pending sales of properties reached 3,626, which was down 8.1 percent from last year. The months inventory of single-family homes for September was also down to 5.8 months, which remains low, signaling more of a seller’s market and also shows that demand is keeping up with the available supply of homes.
September (all categories)
All Classes
September 2004
September 2005
Percent Change
Total property sales
5,933
5,977
+0.7%
Total dollar volume
$1,026,422,502
$1,094,905,548
+6.7%
Average single-family sales price
$179,217
$191,827
+7.0%
Median single-family sales price
$134,900
$145,000
+7.5%
Active listings
43,122
43,767
+1.5%
Pending sales
3,945
3,626
-8.1%
Months inventory*
6.3
5.8
-8.4%
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
Single-family Homes UpdateThe overall median price of single-family homes reached $145,000 in September, which was an increase of 7.5 percent compared to the prior year, and the average price for single-family homes reached $191,827, which was up 7.0 percent versus the same period last year. The median is a typical market price where half of the homes sold for more and half sold for less than that figure. Both the median and average sales prices were monthly records for September.Houston’s current median price of $145,000 is 31.7 percent less than the national median price, which reached $212,200 in September, according to statistics released by the National Association of REALTORS®. These data continue to show the tremendous value and lower cost of living afforded to Houstonians.Additionally, total sales for single-family homes in Houston decreased by 0.8 percent to 4,910 in September, down from last year’s 4,950. In the first nine months of 2005, 49,271 single-family homes sold, which was an 8.6 percent increase over the 45,351 homes sold during the same period in 2004..HAR is now also reporting existing home statistics for the single-family home segment of the real estate market. For the month of September 2005, existing single-family home sales totaled 4,316, which was a 2.0 percent increase from September 2004, countering the decrease in new home sales through the MLS that drove the overall sales figure lower. The median sales price for existing homes in the Houston area was $140,000, an increase of 9.4 percent compared to the same period last year. The average sales price for the month of $181,820 was an increase of 8.2 percent from last year’s level. Townhouse/Condo UpdateThe overall median price in the townhouse/condo segment in Houston rose slightly by 1.0 percent, from $107,450 in September 2004 to $108,500 last month. The average sales price for which a townhouse or condo sold in the greater Houston area was $140,662 in September 2005, which was a 2.3 percent decrease from the same month last year. Additionally, the number of townhouses and condos that sold in September reversed last month’s trend and increased this month compared to last year’s sales, with 541units being sold last month, versus 536 properties in September 2004. So far, year-to date, 5,245 townhouse/condos have sold, which was a 1.3 percent increase compared to the 5,179 units sold during the same period of 2004.Houston Real Estate Milestones in September
Reached the highest number of properties sold in September.
Reached the highest monthly average sales price for single-family homes in September.
Marked the highest monthly median sales price for single-family homes in September.
The computerized Multiple Listing Service of the Houston Association of REALTORS® includes residential properties and new homes listed by 19,000 REALTORS throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 40,000 properties can be found on the Internet at http://www.har.com.The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.)Founded in 1918, the Houston Association of REALTORS® (HAR) is a 20,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual membership trade association in Houston, as well as the second largest local association/board of REALTORS® in the United States.
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