Wednesday, December 29, 2010

Foreclosure Debacle Won't Stop Housing Recovery



From Builder Online, a short article on why the foreclosure mess isn't something to worry about. In essence, the article talks about how the foreclosures are concentrated in particular areas like Florida, and how many of these foreclosures are going to go through since they were valid actions to begin with.

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Monday, December 27, 2010

Top Ten Design Trends for 2011



Builder Magazine just unveiled what it thinks to be the top ten housing design trends for 2011. Among them are directions towards honest, simple architecture for smaller homes that eschews glitz as homeowners simplify their lives, organic and green construction, continued moves towards more village type suburbs, multigenerational homes, and an increased mixing of styles in home and interior design.

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Friday, December 24, 2010

The Staten Island Greenbelt















After exploring the Staten Island Bluebelt in our posts the other day, I thought I would present a little green for the Holidays and take an interesting overview of another one of Staten Island's resoures: The Staten Island Greenbelt.

This article from the blog Landscape and Urbanism features a video about the Greenbelt from PBS's The City Concealed series.

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Wednesday, December 22, 2010

Housing Recovery Expected to Gain Strength in 2011 and 2012

An excerpt from Builder.com about an improving outlook on housing as the job market improves.

The job market should improve sufficiently in 2011 to begin thawing the big freeze in household formations of the past few years and to put consumers in a brighter mood, both of which are prerequisites for boosting housing demand.

Some parts of the country will recover sooner than others, the economists on the panel said, and foreclosures will linger as a problem in many of the largest housing markets. However, supply and demand may be in a healthier balance than suggested by today’s high vacancy rates and even conservative demographic projections suggest that housing production will have a lot of catching up to do in the decade ahead.

Job Growth the Key

“The key to recovery is job growth,” said Crowe, “and that has been relatively slow.” Average monthly employment growth following recessions in the 1980s and 1990s was in the range of at least 200,000 new jobs. By comparison, the first six months of this year averaged 139,000, including many temporary Census jobs, which barely made a dent in the 8.5 million jobs lost in the recession. “We need to add about 100,000 to 125,000 jobs just to keep up with growth of the labor force,” he said.

When asked why buyers were remaining on the sidelines, almost 85% of the builders surveyed by NAHB said it was because they could not sell their existing home and 78% said it was due to uncertainties over employment and the economy.

In the period ahead, Crowe said he was looking for better job creation to spur household formations, which over the course of the recession were 0.5 million to 1.5 million lower than they should have been as people doubled up with friends and relatives. “We’ve got a lot of people right on the edge who will soon form households,” he said. “They are ready to move out and begin to absorb the housing stock that’s out there.”

A Multifamily Surprise

With signs looking favorable that new-home sales will be gradually improving, Crowe forecasted a 37% increase in single-family starts in 2011 to 655,000 units and a further 48% climb to 970,000 units in 2012. Starts this year are expected to rise to 470,000 units, a “marginally better” 8% gain from 2009 but lower than had been originally anticipated.

Multifamily construction, on the other hand, “made a surprisingly decent rebound midyear,” he said. “It had been expected not to do as well in 2010 as in 2009, but that is now reversed. The latest NAHB forecast shows multifamily housing starts bottoming out at 112,000 units in 2009 and then rising 12% this year to 125,000 units, 19% in 2011 to 149,000 units and 41% in 2012 to 210,000 units.

Better Private Payroll Growth

Maury Harris, chief U.S. economist for UBS, said that 2.7% real growth in 2010 and 2011, while substandard, will generate “some decent results” for business and the stock market. “In terms of jobs, they will pick up next year,” he said. “The longer we can sustain even moderate growth, the more employers have confidence in going ahead in hiring.” They will remain cautious until they see demand staying at least at its current level.

Harris predicted that private payrolls will grow by about 150,000 jobs a month next year, compared to around 95,000 now, leaving the unemployment rate at 9% at the end of 2011.

Once the Federal Reserve begins seeing better job growth, he said, “it will be talking about tightening, not easing.”

Banks Easing Lending Standards

Harris was confident that better employment gains will be achieved next year because banks — confronted by weak demand for loans and the need to compete for a bigger market share — began easing their lending standards this summer. That historically has been associated with improved private employment growth, he said, especially among firms with less than 50 employees, who have been contending with severe credit constraints.

Republican control of the U.S. House of Representatives will also be heartening to the small business community, easing its concerns over taxation and regulatory policies emanating from Washington and producing a pick-up late in the year in business confidence indexes, he said.

Household debt burdens relative to income “are tumbling,” he added, a good omen for stronger consumer spending. “Debt is holding back the consumer less and less.”

A Severe Market Correction

“Most economists now are predicting job growth next year that would be sufficient to begin to eat into the unemployment rate,” said Eric Belsky, managing director of Harvard University’s Joint Center for Housing Studies. “Jobs are very critical to a recovery in housing, because it goes straight to consumer confidence and business confidence. The longer housing remains stressed, the lower the confidence of most decision makers in the economy.”

Taking a broader and longer view of the housing cycle, Belsky said that the market has now corrected for the housing boom with a severe downturn in which both home prices and home building have dropped dramatically, and this has some positive implications for future growth.

The declines in house prices and mortgage rates have reduced average monthly home payments to a historic low. “This is a plus because when a more meaningful recovery does begin, more people will be able to get into the market,” he said. “An environment that is remarkably affordable is likely to hold for the better part of next year and beyond.”

And as a result of steep cuts in production during the downturn, a total estimated 15.8 million completions of single-family and multifamily homes and placements of manufactured homes from 2001 to 2010 puts the supply of new housing for this period back into balance with demand.

“The market doesn’t look like it’s oversupplied in the long term,” Belsky said, and the current inventory should be absorbed as demand returns. A similar trend is occurring in remodeling.

Two-thirds of the demand will be coming from household formations, which will be fueled by an aging population, by the extra-large echo-boom generation of children of baby boom parents and by immigrants, he said.

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Tuesday, December 21, 2010

With Mortgage Rates Below 5%, Housing Highly Affordable For 7th Straight Quarter




Excerpt of a Builder.com article:

Housing affordability remained near its highest level nationwide for the seventh consecutive quarter as interest rates dipped below 5%, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released on Nov. 18.

Interest rates during the quarter were at their lowest level since the HOI was first compiled nearly 20 years ago.

The HOI indicated that 72.1% of all new and existing homes sold in the third quarter of 2010 were affordable to families earning the national median income of $64,400. The index for the third quarter almost equaled the record-high 72.5% set during the first quarter of 2009 and marked the seventh consecutive quarter that the index rose above 70%. Until 2009, the HOI rarely topped 65% and never reached 70%.

"With interest rates remaining at historically low levels, and house prices starting to stabilize, homeownership is within reach of more households than it has been for almost 20 years," said NAHB Chairman Bob Jones. "While these favorable conditions are beginning to draw home buyers back into the market, builders continue to have major problems in obtaining credit for new-home construction, and this obstacle must be overcome if builders are to respond to improving demand moving forward."

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Monday, December 20, 2010

The Staten Island Bluebelt

The Watersheds of South Richmond

I thought it would be interesting to share an article today that isn't specifically related to opportunities in and news about Staten Island real estate, but rather to take a look at one of the Island's other fascinating features: The Staten Island Blue Belt.

I came across this interesting article from Urban Omnibus, a project of the Architectural League of New York, where they sat down with Dana Gumb, NYC Department of Environmental Conservation's Bluebelt lead manager to talk about this engineering project that tries to work with the ecology of the Island while helping to manage the reality of suburban development and the large sudden surges of water runoff created by storms.

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Friday, December 17, 2010

How to Get a Home Buyer’s Discount




A NY Times article about how to get a discount on your new home, even though the tax credit has expired:

With the home buyer’s tax credit now expired, here’s one way to still get an equivalent discount of sorts: ask your real estate agent to take it out of his or her commission.

That’s what Colm Glass, founder of Glass Real Estate in San Francisco, is offering clients. At a recent open house, Mr. Glass handed out cards advertising the $5,000 commission rebate he is offering for homes sold for less than $1 million and higher discounts (often around $8,000 to $10,000) for homes priced higher. “Home buyer tax credit gone,” the card declares. “We’re giving you another chance.”

“I did see things drying up a lot after the tax credit went away, which is kind of curious since it wasn’t a great deal of money,” Mr. Glass said. But “it did seem to drive a lot of purchasing earlier this year.”

As a result, Mr. Glass decided to reframe a commission discount he had been offering clients since 2008 as a rebate more comparable with the expired credit. Here’s how it works.

When he’s the seller’s broker, the rebate comes out of his commission (which is 2.5 percent when there are two agents involve in the transaction). And when he’s the buyer’s broker, the seller pays him his commission and then he gives the buyer the rebate out of that amount. Mr. Glass said the rebate has helped him sign on clients and close more deals annually than when he wasn’t his own boss.

So if asking for such a commission discount seems to be a good plan, bear in mind that independent brokers may be more likely to offer it than those that work for a large firm. Mr. Glass, for instance, said that when he wasn’t his own boss, he was able to offer such discounts only in rare circumstances. But if you plan to work with an independent broker, you should be sure to check references to lessen some of the risk.

In addition, your agent may be more likely to say yes to a discount if you’re buying in a city with expensive home prices (like San Francisco, New York, Los Angeles and Chicago), where commissions tend to be higher as a result. “It really does work best in cities where the price tags are high,” Mr. Glass said.

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Wednesday, December 15, 2010

Home Buying for the Long Haul Pays Off



An article from Bloomberg Businessweek says that even though housing is in a slump, in the right markets, housing remains a good long term investment. Here is an excerpt:

The era of get-rich-quick real estate is dead. The era of increasing long-term wealth in your home is back.

Historical data from the National Association of Realtors (and adjusted for inflation by Businessweek.com) show that in 18 of the 25 largest metro areas in the U.S., the value of homes purchased in 1990 had increased by 2010, often by double digits. And this in a year when real estate prices around the country have softened since their peak in 2006. These houses would have been worth even more a few years ago

While that's cold comfort for the many Americans whose homes have lost more than $1.7 trillion in value in 2010, according to a new, it underscores the fact that homeowners who buy for the long term have historically seen the value of their investment increase over the years. In inflation-adjusted terms, the median U.S. home sale price in the third quarter remains approximately 9.5 percent higher than in 1990, despite falling 26 percent from peak levels, according to calculations based on NAR data.

Says Greg Hebner, chief operating officer at Sorrento Capital, an Irvine (Calif.) asset management firm: "You should at least be looking at housing now," especially as interest rates are low and homeowners can deduct mortgage interest from their income taxes. "It's still a good game" if a buyer understands the risks, has consistent income, and purchases a house he can afford, Hebner says.

Based on data since 1968, nominal U.S. home prices have risen 5.5 percent annually and outpaced inflation by about 1 percent to 2 percent, says Lawrence Yun, NAR's chief economist. The main reasons housing has grown faster than inflation, he says, are that more people wanted to buy in places with a finite supply of developable land, which drove up prices, and owners increased the value of their properties through home improvements.

A national housing survey by Fannie Mae shows that in the third quarter this year, 66 percent of consumers believed buying a home is a safe investment, compared with 16 percent who believe stocks are safe.


Fannie Mae's survey also showed that 59 percent of respondents still believe owning a home is a good way to build wealth, and 84 percent believe buying makes more sense than renting.

Assuming home prices continue to increase 1 percent to 2 percent better than inflation, a buyer needs to own the property for at least five years to break even and cover selling costs, says Sorrento Capital's Hebner.

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Tuesday, December 14, 2010

Rates, loan applications up for fear of missing the boat

An interesting article from the Calculated Risk blog, which notes an increase in mortgage applications in concert with the increase in mortgage rates, possibly showing some urgency in the housing market as people are afraid of missing "the perfect time to buy" for fear of future rate increases.


The seasonally adjusted Purchase Index increased 1.8 percent from one week earlier. This is the third weekly increase for the Purchase Index which reached its highest level since early May 2010, when the tax credit was expiring.

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Monday, November 15, 2010

The End is Nigh


The end of great deals on homes in New York City, that is. How can this be? Are we not still stuck in a shocked and awed economy?

Unlike many other major metropolitan centers in America, New York City, along with a handful of other cities, have actually seen house prices rise steadily in the last 4 months, as reported in this Forbes article. According to the article, New York City has seen four months of home price improvements, going up 1.2% in July and 0.2% in August.

New York City's housing was always in demand, since it was in short supply even before the crash. That demand insulated New York from the plunge in prices seen in the most overheated markets like Las Vegas and Phoenix.

Those that have been waiting to buy a home because they wanted to find the bottom of the market, you have already missed the boat. The good news however, is that the return of upward movement in house prices is a slow and steady one, that reflects more rational thought about the value of property. That means that there is still time to get in on what is possibly the best "system reset" of housing prices we will see in our lifetime. Combined with the incredibly favorable mortgage lending rates, this is still likely to be the best time to buy real estate in the next several decades.

The signals are clear: Slowly but surely, people will find fewer and fewer great deals on a home.

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Tuesday, November 9, 2010

The Tools You Really Need to Maintain Your Home


What tools do you really need to maintain your home?

A hammer, a multi-bit screwdriver, a cordless compact hammer drill, a jigsaw, and a pull saw, according to this NY Times article: http://www.nytimes.com/2010/10/14/garden/14pragmatist.html

The article goes into the reasons why and also explores a bit more into which ones to get and why.


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Monday, November 8, 2010

The American Dream is Alive and Well with Gen Y

The Urban Land Institute (ULI) just released a study that suggests that the echo boomer generation, or Gen Y, holds a high view of the American Dream – despite the housing market collapse -- with the majority of respondents expecting to own homes within five years.

While the largest percentage of Gen Yers currently rent, live with their families, or live in student housing, more than 70 percent expect to own a home by the time they reach their early thirties. Sixty-seven percent of all the respondents expect to own homes by 2015.

The sheer size of the Gen Y generation, nearly 25 percent of the population of the US, means it will have enormous influence on the real estate industry and the economy in general – an impact likely to be as striking and long-lasting as that of the baby boomers.

Eighty-two percent of the survey respondents who said they anticipate owning by 2015 expect to be living in a single-family home, far outstripping the percentage who expect to own a condominium, duplex or townhome. The price of housing – in terms of monthly mortgage payments or lease payments -- ranked as the most important feature, outweighing other features such as green building.

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Friday, November 5, 2010

National Grid's Enhanced Home Sealing Incentive Program (EHSIP)


With the winter chill coming, here is an interesting homeowner program from National Grid: The Enhanced Home Sealing Incentive Program (EHSIP). This program helps you keep out the cold by identifying and curing drafts in your home. The program provides for a Building Performance Institute (BPI) certified Energy Specialist to come and assess your home from top to bottom. The specialist will also identify and seal air leaks for up two hours. Lastly, National Grid provides $3,000 in attic insulation incentives. To qualify, your home must have been built before 1980. For more details, visit http://members.questline.com/Article.aspx?articleID=17299

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Wednesday, November 3, 2010

If only...

The great lament among people is that they would be rich or better off "If only I had bought when..." Yet the very same people who make this claim also fail to recognize opportunity when it faces them. What if some one said, at the height of the housing boom, that they could roll back time to let you get in on the ground floor? That you could invest in a home for your family for the future at prices that were still reasonable?

While many don't realize it, that is exactly what the latest correction in housing prices means. Depending on the market you are in, the market has corrected housing prices back to as far as 2001 according to this article from the Calculated Risk Blog, citing housing consultant John Burns.


Case-Shiller: House Prices have corrected to what year?

















In New York, where the housing boom was not in as big a bubble, housing prices have returned to 2005 levels. If ever opportunity were ever so clear, this would be the gilded envelope the invitation comes in. Buy in 2010 at 2005 prices and be one of the people who can proudly say "The best decision I ever made was having bought when..."

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Monday, November 1, 2010

The Disaster Lab



Nothing like a mini disaster movie to start of your work week, right? The video above shows two homes, one that has been fortified to withstand a tornado or hurricane. As you can see the results are rather dramatic. Amazingly, the fortified home only cost $5,000 more to build... a small price when you consider the alternative.

This test was conducted in the Institute for Business & Home Safety's $40 million, 2,300-square-foot disaster lab in South Carolina, which can simulate entire homes being put against tornado-strength winds or Category 3 hurricanes.

One wall of the lab contains 105 giant fans that can simulate extreme winds, and a 750,000-gallon water tank can introduce water to that mix, simulating tropical storm and hurricane conditions. A large hurricane simulation costs about $100,000 to conduct.

Learn more about the lab at: http://www.popsci.com/science/article/2010-10/video-insurance-industrys-new-disaster-lab-destroys-its-inaugural-home

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Friday, October 29, 2010

Professor: Now Is The Time To Buy A House


NPR

Highlights from NPR's interview with Professor Karl Case:

  • The
    Case-Shiller Index is one of the best measures of home values.
  • Eventually, when [house] prices get down
    low enough, people are going to buy this property, all right? And
    they're going to buy it up and they're going to live in it. And by all
    historical standards, they're getting a pretty good bargain right now.
  • It certainly is the best time [to buy a home] we've seen in the last four, five
    years, and maybe in my lifetime. And if you look at some of the property
    values that are out there, one of the things that people forget is that
    a house is a consumer durable good. It's not just an investment. If
    you're going to hold it for a long time you live in it and you derive
    from it housing services that have a real value.
  • So if you don't think of housing just as something to earn you
    capital gains in the long run, but something you're going to live in and
    you can afford to make the payments on it, it looks to be a pretty good
    deal. And by the way, the income - that form of income is completely
    tax free.
Listen to the whole story here: http://www.npr.org/templates/story/story.php?storyId=129800154

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Wednesday, October 27, 2010

September Existing-Home Sales Show Another Strong Gain



Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, jumped 10.0 percent to a seasonally adjusted annual rate of 4.53 million in September. In addition the inventory of homes continues to diminish. All good news for builders, and a continued call to buyers that great deals are happening right now...

See the full article here: http://www.calculatedriskblog.com/2010/10/september-existing-home-sales-453.html

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Wednesday, October 20, 2010

Top Ten Consumer Tips for Buying a New Home




Noted homebuilder, R. Randy Lee, CEO of Leewood Real Estate Group, was recently asked to give his top ten tips for buying a new home. This is what he had to say:

1. Before you buy, research programs that may help you to buy a home, even if you think wouldn’t qualify. Mortgage programs and programs that reduce down payments to as little as a 3% all make buying a home easier financially. Often, these programs go unused because so many people assume that they won’t qualify, when in fact many of them target a very broad income range.

2. Think long term. Your house should be a minimum five to seven year investment, so if you don’t think you will be in the same place for at least that amount of time, rethink whether buying a home is right for you. Thinking long term also means buying a home that you can really afford and that won’t overextend you even if your financial situation changes.

3. Be a knowledgeable buyer by doing your homework before you search. Be able to answer questions like: Which neighborhoods appeal to you, what are your family’s housing needs now and in the next ten years, what types of homes are right for your family. Also have a basic knowledge of your municipality’s zoning laws and their future plans. The idea is that you don’t want to buy a new home next to a corn field only to find out later that it is zoned for manufacturing.

4. Hire a real estate agent with experience matching home buyers with the right new home and who is trustworthy based on positive experiences from friends and family. An agent will need to know quite a bit about what you are looking for and how you want to live to be able to effectively match a home with your needs. It is important to rely on recommendations from people who have had personal experience – everyone looks good on paper!

5. Get preapproved for a mortgage before you start looking for a home. Learn what the mortgage process entails, find out what your credit scores are with a copy of your credit report, find out what the current interest rates are, and then shop for around for the best loan. Being preapproved lets you know what you can afford, shortens the buying process, avoids disappointments and gives you more power as a buyer. Same as with choosing a real estate broker, you need to rely on a personal recommendation when choosing a bank or mortgage broker.

6. Give your real estate agent a detailed list of things you are looking for in a home, including your price range. Being specific about items are absolutely necessary and which items would be nice to have but aren’t crucial will help your agent find the right home for you and your family faster.

7. Buy in a good school district even if you don’t have children now or plan to have children in the near future. When it comes to reselling, your property will be worth more than a comparable property in a lower rated school district, and will broaden the market of buyers.

8. After you have seen some homes and are deciding which one is right for you, list all the pros and cons of each. Better yet, have a good friend or family member make their own list and compare to see what things you may have missed. Remember to think of the pros and cons of the neighborhood as well, and for new homes to research the builder and check out their reputation.

9. Retain an attorney who has a strong track record of representing home buyers. Remember that you don’t need to a contract until you’ve worked out every detail of the sale to your comfort and satisfaction. Also ask the attorney what typical closing costs are for homes in your price range.

10. Be financially prepared. Save money aggressively for the down payment and closing costs. Avoid making major purchases of any kind or opening new lines of credit when you’re about to buy a new home, including credit cards. The foregoing may affect your ability to obtain a mortgage in the amount and at the terms that would be most advantageous to you.

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Tuesday, October 19, 2010

Should You Rent or Buy Your Next Home?

house-shopping

Reposted from: Ryan Guina's article on GoBankingRates.com



Whether you are moving for a new job or simply want a change in scenery, deciding whether you should rent or buy your next house is one of the biggest financial decisions you will ever make. There are many factors to consider before deciding which option is right for you, your family and your finances. Here we look at some advantages and drawbacks of both buying and renting a home.

Pros of Buying Property



Traditionally considered one of the largest and potentially best investments a person can make, home ownership offers the following benefits:

  • Housing payments remain the same. If you avoid adjustable mortgages and opt for a fixed-rate mortgage, you will know immediately what your monthly payment will be from the first day forward. The cost of rent typically increases over time.
  • Build equity. You build home equity as you make your mortgage payments and when you complete your payments, you own a home. You don't own anything when you rent. Though the housing market has hit troubled times in recent years, housing typically appreciates in value, making home ownership a decent financial option in the long run.
  • Tax advantages. There are certain tax advantages associated with home ownership that are excluded from renters. Mortgage interest is usually considered a tax deduction when you file your tax return.

Cons of Buying Property


On the flip side, home ownership is not always what it is cracked up to be. Consider the following drawbacks before committing yourself to a mortgage:


  • Home ownership is expensive. Home ownership is almost always more expensive than renting. Consider the cost of property taxes, homeowner's insurance, maintenance and utilities before buying a home.
  • Potential loss of your home. If you are unable to meet the terms of your mortgage, you risk not only losing your home but all of the money you have invested into it up to the point of foreclosure.
  • Additional expenses. Renters do not have to worry about paying for a new roof or fixing a broken furnace, but homeowners do not have that luxury. One of the biggest deterrents from home ownership beyond the cost is the time and energy required to maintain a home.

It would stand to reason that what is considered a disadvantage to home owners is a benefit to renters and vice versa. There are additional pros and cons to consider if you are considering renting.


Pros of Renting


  • Smaller initial investment. Where a home owner may be required to invest a healthy down payment, renters are required to put up much less money in a security deposit. This makes it more affordable (initially) to rent.
  • Flexibility. Beyond a lease arrangement, which is generally one year, there are not other commitments made by a renter. If your job changes or your finances improve over time you are free to look for another property.
  • Few maintenance costs. Beyond utilities and rent increases, you should not see any other expenses while you live in a rental home. Property taxes, most maintenance costs and many other costs are incurred by the property owner.

Cons of Renting


  • Less stability. As long as your landlord acts within the laws, you are always at risk of losing a place to stay.
  • The property is not your own. Since you are only renting a space, you do not have the freedom to paint, remodel or decorate as you would in your own home.
  • No equity or tax advantage. Renters are not able to recoup the money spent on rent through tax advantages or growing equity in the property.

The Verdict: Should You Rent or Buy?


There is a lot to think about when you are deciding to rent or buy your next house. Take these pros and cons into consideration, as well as your future personal and financial goals.


How long will you live in the area? Do you plan on expanding your family? Do you have money for a substantial down payment? Can you afford ongoing maintenance costs? The answer to these questions and the pros and cons listed here can help you make the decision that is best for you and your family.

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Thursday, October 14, 2010

The Fight Against Detractors of Homeownership

http://www.jumperrealty.com/wp-content/uploads/2009/11/House.jpg

Excerpts from the National Association of Homebuilders' article:

Joining a sizable backlash against recent articles in Time magazine and elsewhere disparaging homeownership and attacking long-standing government policies to help families become home owners, major national news media have been publishing articles arguing in housing’s favor and disputing its critics.

“Since the bursting of the housing bubble, there has been a steady drumbeat from the factories of futurist punditry that the notion of owning a home will, and, more importantly, should become out of reach for most Americans,” Joel Kotkin writes in the Sept. 14 issue of Forbes magazine.


However, he points out in his article, “Why Housing Will Come Back,” home owners and those aspiring to become home owners “now represent the core of our economy without which a strong recovery is likely impossible. Houses remain as a financial bulwark for a large percentage of families, the anchor of communities, and, increasingly, home-based businesses.”

Despite the voices that have been raised against it, Kotkin concludes that homeownership, both in the single-family and multifamily markets, “is not likely to fade dramatically for the foreseeable future. The most compelling reason has to do with continued public preference for single-family homes, suburbs and the notion of owning a ‘piece’ of the American dream. This is why four out of every five homes built in America over the past few decades, notes urban historian Witold Rybczynski, have less to do with government policy than ‘with buyers’ preferences, that is, What People Want.’”

As part of the return to normalcy in the nation’s housing markets, Kotkin says that the historic balance between incomes and prices needs to be restored to where it takes two to three years of median household income to purchase a median-priced home, down from a ratio of 4.6 at the peak of the boom. That process is nearing completion in a large part of the country.

Among factors he cites working to housing’s long-term advantage: the U.S. population is projected to expand by 100 million by 2050; 60 million strong, the children of the baby boom are in their 20s and poised to start buying houses; in their pursuit of the American dream, immigrants are heading to the suburbs as fast as they can get there; multigenerational households are on the rise back to 1950s levels; and single-family houses are increasingly able to provide space for part- and full-time offices.

Painting the Room Purple

Responding specifically to the Time article by Barbara Kiviat, in the Sept. 21 Realty Times Bob Hunt, from the National Association of Realtors®, takes the author to task for blaming homeownership for “foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago.”


“But she is mistaken,” writes Hunt. “All those regrettable events were not caused by homeownership; they were caused by reckless lending programs.”

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Wednesday, October 13, 2010

New York’s consumers see a bright future for the real estate market


The New York Homeownership Survey was published by The New York State Association of Realtors, in partnership with the Siena Research Institute (SRI). The survey found some very interesting statistics, including that almost all respondents are satisfied with owning their home, and that 81% of homeowners considered their home to be a comfort rather than a burden. 81% of New Yorkers believe that homeownership is a better investment that the stock market.

The study also investigated consumer sentiment about the market. The study revealed that New Yorkers expect that the overall real estate market and the value of property to increase over the next year. Consumers see this as a very good time to buy a home.

According to SRI Director Dr. Don Levy, "New Yorkers see value today and recognize that this may be one of the best times in a while to buy. And it is heartening to see that the housing market bedrock remains strong with future sentiment overall, and attitudes toward both buying and selling are positive looking forward."

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Tuesday, October 12, 2010

No Money Down Returns

http://www.creativemortgagelenders.com/graphics/clipart/mortgage/ZeroDown.jpg

Exotic mortgages from shifty mortgage lenders hailing "no money down" was one of the culprits of the housing bubble, allowing people who did not have good financial statements creep into the market and fuel what would become the foreclosure nightmare.

Yet no money down mortgages do have their place. In instances, there are renters who make enough to own a house, but simply lack the wherewithal to be able to accumulate a large enough down payment to get into a home. With home prices much higher in urban areas than in the past, it is often now the case that down payments come from family members, or friends. But those without are stuck.

Fannie Mae is now introducing a new program that cautiously allows people to get into homes with no or very little money down mortgages. This makes home ownership within reach for many that wouldn't otherwise be able to own.

While the program is not yet available in New York, it is worth keeping an eye out for.


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Monday, October 11, 2010

The Wick and The Stick



Today, quick detour from our usual housing news to highlight an interesting exhibition taking place here on Staten Island, at the Snug Harbor Cultural Center and Botanical Garden.

George Way, whom we have featured here before, has mounted another exhibition, this time focused on early lighting pieces from the Renaissance to the Victorian era. The pieces, drawn from his extensive collection of antique furniture and from the Jonathan Z. Friedman, Esq. Collection, are displayed with paintings, etchings and other decorative arts pieces that explore the crucial role candlelight played in daily life and how it was used for metaphorical ends by artists.




Mr. Way, an affable gentleman who is often on hand at the exhibition to answer questions, has quietly amassed a collection that is one of the largest privately held antique furniture collections in America, all on a deli counter worker income. His pieces are often comparable or better than those at The Metropolitan Museum of Art and even the Victoria and Albert Museum in London. Mr. Way has lent many to museums around the country, but is working on giving his collection a permanent home here on Staten Island.

For more information on the exhibition, which is running now till May of 2011, visit the Snug Harbor Cultural Center and Botanical Garden website.

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Thursday, October 7, 2010

Existing-Home Prices Continue to Stabilize

Prices of existing single-family homes rose by 3.2% in July, compared to the same month a year ago, according to the S&P/Case Shiller Home Price Index, which tracks prices in 20 major U.S. cities monthly. S&P released these data on Tuesday morning, Sept. 28.

Read more the article here.

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Tuesday, October 5, 2010

The Real Estate Market is not Dead



The media has given the public at large that the housing market is dead, that people are waiting to see what happens with the economy and to keep renting homes or live in situations not suited to their needs until the economy provides more positive signs that everything will be o.k.

What's the mass media not telling you?

Well, first of all the fact that an overwhelming majority of Americans think that now is a fantastic time to buy a home. According to a recent survey by Fannie Mae, 70% of people believe that now is a good time to buy a new home. That same survey also said that "Of those surveyed, 47 percent believe home prices have bottomed, and 31 percent said prices would increase over the next year. The combined 78 percent of those not expecting further declines is up from 73 percent at the beginning of the year. "

That certainly does not sound like what the major news sources tell people at all. People are interested in buying new homes and that now is a great time to do it.

The second thing that the media is telling us is that the market is dead. The picture for this post shows an advertisement for a builder who has shown the exact opposite. McBride Homes has been selling an average 150 homes per month this year, and is on track to close 24% more homes than in 2009. They have accomplished this through aggressive marketing and discounting the homes. Buyers are looking for the best deal around in a market that is truly a buyer's market.

Combine those two facts and what you have is that there is a great opportunity for buyers to get into a new home right now at great prices, and that there is a lot to choose from. Smart buyers have a veritable smorgasbord of new homes to choose from.

The real estate market isn't dead... the deals are there, the buyers are there, but smart buyer are just finding and getting in on the best deals.

Read more about the McBride phenomenon here.

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Wednesday, September 29, 2010

Hyperbole is for Magazines, not Homeowners

[roiA0915]

The cover of a recent Time magazine has the byline that "Why owning a home may not make economic sense." That kind of statement, one that goes so against conventional wisdom that it makes your raise your eyebrows, helps sells magazines because it is dramatic.

Unfortunately, it is also the kind of drama that level headed people looking to invest in their family's futures need to avoid. Even the Wall Street Journal found that cover too much to take and wrote an article on why the Time Magazine article is just plain wrong.

The article goes into 10 reasons why it's good to buy a home now, summarized below.
1. You can get a good deal.
2. Mortgages are cheap.
3. You'll save on taxes.
4. It'll be yours.
5. You'll get a better home.
6. It offers some inflation protection.
7. It's risk capital.
8. It's forced savings.
9. There is a lot to choose from.
10. Sooner or later, the market will clear. Demand and supply will meet.

Read the article for the explanations, but suffice it to say that level headed thinking in times of troubled economies is where great opportunities are to be had, and investing in the future of your family in a house that does not overextend your means is still a great idea right now.

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Wednesday, September 1, 2010

Why buy now?

http://empowerhomeloans.com/blog/wp-content/uploads/2009/09/HouseHands.jpg

This is an interesting piece from a blog called "Get Out of the City!" which talks about a why it is a good time to buy a home now. The article is interesting in that it doesn't shy away from the fact that we are in a bad place in terms of the economy, and examines why it is still an excellent time to buy. Here are a few highlights:

  • Buying is still smart in this economy if you believe that you will be in your home long term. Purchasing with the idea that you will turn the house in under 5 years is not a good idea unless you really do need to move.
  • If you know that you will need to buy a home within the next 2 years, it will be better for you to make the move now if you can. Why? Because mortgage restrictions are getting tighter and tighter. Prices are going down, but increased restrictions on mortgages may prevent otherwise qualified buyers from purchasing in the future.
  • [M]inor fixes to your home will increase its marketability and value. Simple things like cleaning the carpets, removing the clutter, painting and simply keeping the yard looking nice can raise the value by up to $10,000. Make the effort. It will pay off.


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Monday, August 30, 2010

Reasons to Own Your Home

http://www.howtobuyahomeinmaine.com/testimonials/images/happy-homeowners.jpg

The last few months, since the expiration of the Federal Housing Tax credit in April, has been little but bad news for the real estate market from the recent statistics showing a 27% fall in sales compared to last year, and the possibility of prices dipping even more. The media has been trumpeting the death of home ownership, and the public has become increasingly scared of owning a home.

Adding to that mix, are experts that believe that home ownership will never yield the rewards seen in the the past decade. These opinions should be taken with a very large grain of salt, and smart buyers should be aware that home ownership is still one of the best investments you can make for your family's future.

Why? Because housing is notoriously cyclical and the experts who make these doomsday claims are sensationalized by the media hunting for the next disaster story. No doubt housing looks bleak right now, but shelter is a fundamental need, and as bleak as things may seem now, the housing economy will return. Those who invest now will have gotten the best value for their dollar.

To see this in more concrete terms, examine articles from the mid to late 1980s, when America was in its last housing crisis. An article from the New York Times in 1983 with the headline "A house, once again, is just shelter," sounds eerily familiar: "For a long time, equity in a house was like money in the bank, a reliable asset that would grow steadily and be available for a rainy day...But now, for the first time in a generation, housing has gone sour. House prices are stalled or even falling...The era of guaranteed profits from residential properties has ended...''People took it as a canon of religion that this was the way to wealth -that the house would be worth 10 times more 10 years from now."

Today's experts echo that exact same sentiment, yet the most recent housing boom proved the "experts" from the 80s wrong. Those who bought homes then, saw their homes increase in value even after adjusting for the most recent correction.

Despite what the experts say, housing is a sound investment in your family's future. Mortgage rates are incredibly low, and there is plenty of stock to choose from. The key is to buy smartly and within your means; Overextending to buy a home is bad financial planning regardless of the economy, but particularly so now.

So what makes home ownership right for you? In an interesting opposite view to their recent articles condemning housing, the NY Times put out an article that describes why housing is still a great idea for some. The article is worth reading but in short, it provides a forced means of building equity, never having to deal with a difficult landlord again, and the ability to live in a nicer part of town where rentals are not the norm.

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Friday, June 4, 2010

Pending Home Sales Index Jumps 6% in April - Housing Data, Existing Home Sales - Builder Magazine

From Builder Online, economists think that the uptick in April in home sales can be attributed to more than just the Tax Credit:

The housing tax credit is the gift that keeps on giving this April.

According to data released Wednesday, the National Association of Realtors’ (NAR) pending home sales index rose 6% in April compared to the previous month to a reading of 110.9. It represents the highest level of sales activity since last October, when buyers were similarly rushing to purchase homes before last year’s housing tax credit expired in November.

But the level of buying activity in April appears to be motivated by more than just this most recent tax credit, which required a signed contract by April 30 and settlement by June 30. “There were concerns that only a small pool of buyers were left to take advantage of the tax credit extension,” said Lawrence Yun, NAR’s chief economist. “But evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales.”

For comparison, this April’s pending home sales index is 22.4% higher than the same month last year.

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Wednesday, May 26, 2010

New home sales soar 15% in April

NEW YORK (CNNMoney.com) -- New home sales soared in April as homebuyers rushed to claim the tax credit that expired at the end of the month.

New home sales climbed 14.8% to a seasonally adjusted rate of 504,000 last month, up from an upwardly revised 439,000 in March, the Census Bureau reported on Wednesday. Sales year-over-year were up 47.8%.

A consensus of economists surveyed by Briefing.com had expected April sales to rise to an annual rate of 425,000.

April was the second straight month of increases. In March new home sales snapped a four-month losing streak and surged at the fastest single-month rate in 47 years as homebuyers snatched up properties ahead of the looming deadline for the tax credit.

The homebuyer tax credit, which expired April 30, boosted sales since buyers had to sign contracts by the end of last month. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.

The credit also pushed existing home sales higher during the month, according to a real estate industry report released earlier this week.

"We got two solid increases in March and April," said Mark Vitner, senior economist at Wells Fargo. "We may see sales fall to a record low in the aftermath of the tax credit program, but any fallback should be short-lived."

That's because even with the jump, the current annual rate of new home sales is still historically low. Vitner said about 700,000 homes are sold annually in a stable economy.

"A true recovery in the housing market won't get underway until we see solid gains in employment and income," Vitner said.

Although last month employers added the most jobs since March 2006, Vitner said the labor market has a long way to go as it recovers the 8.4 million jobs that were lost in 2008 and 2009 and long-term unemployment sits at severe highs.

"The job market is getting a little bit better, but it's still abysmal, he said.

Price and inventory: The government report showed that the median price of new homes sold in April was $198,400, down almost 10% from March from April 2009.

Vitner said the drop in price is because first-time home buyers, who typically spend less than repeat buyers, represented a larger portion of overall buyers last month.

An estimated 211,000 new homes were for sale at the end of April. At the current sales pace, the government expects it will take five months to sell through that inventory. That's down from March, when there were 6.7 months of inventory on the market.

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Thursday, April 8, 2010

Most Americans Say Now Is The Time To Buy A House


A Fannie Mae survey says 66% of Americans think it is the right time to buy, according to this article from Housing Zone (and another little reminder that the Federal Housing Tax Credit is expiring in T-Minus 22 Days!!!):

Nearly two-thirds of Americans think the time is right to buy a house, with a majority believing prices will be the same or higher over the next year, according to a Fannie Mae survey just released.

The 64 percent that said it is a good time to buy is just shy of the 66 percent that said the same thing in 2003 as the U.S. housing market was racing higher, said the survey. However, most of the 3,451 polled said that it would be tougher for them to get a loan than it was for their parents.

The survey comes amid signs that the U.S. housing market is recovering after suffering the worst downturn since the 1930s. But, while home prices in some regions are rising, soaring delinquency rates across the nation mean foreclosures will keep persistent pressure on the market, according to analysts.

Fannie Mae, the largest U.S. mortgage finance company, said that the public still "strongly believes" in upholding their financial commitments, though that weakens once people know someone who is defaulting.

Those who know someone in default are more than twice as likely to have seriously considered stopping payments on their own mortgage, Fannie Mae said.

Nearly nine in ten Americans, including seven in ten who are delinquent on their own mortgages, do not believe it is acceptable for people to stop making payments on an underwater mortgage, while eight percent believe it is acceptable.

Concerning the home as an investment, seven out of ten respondents (70 percent) said they believe buying a home continues to be one of the safest investments available. This compares to 74 percent who think putting money into a bank account (money market or savings account) is safe. In contrast, only 17 percent believe buying stocks is a safe investment.


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Wednesday, April 7, 2010

Signaling Jobs Recovery, Payrolls Surged in March

Perhaps even more encouraging than the numbers showing a surge in homebuying in February that I shared a few days ago is the fact that jobs are bouncing back, according to this NY Times article. That means a stronger underlying foundation for the return of the housing industry. It also means that the best deals on homes are going to start going the way of the Dodo for those who wait! Procrastinators beware...


Excerpts:

After losing eight million jobs since the recession began in December 2007, payrolls finally surged in March, the Labor Department reported on Friday. Employers added 162,000 nonfarm jobs last month. Nationwide, the unemployment rate held steady at 9.7 percent.

“We are beginning to turn the corner,” said President Obama, speaking in Charlotte, N.C., calling it “the best news we’ve seen on the job front in more than two years.”

[E]conomists saw signs in the latest report that the economy was poised to make steady, if slow, progress.

“Every major industry, except financial services and information, showed gains in employment,” John Ryding, chief economist at RDQ Economics, said. “From manufacturing, to construction, to retail, it really didn’t matter. They’re all hiring now.”

The economy has shown signs of renewal in recent months with the help of significant government spending. Analysts generally say they believe the recovery will endure even in the absence of stimulus programs.

“Strength effectively feeds itself,” said James F. O’Sullivan, chief economist for MF Global. “What happens to the labor market is key to perceptions about the sustainability of the recovery.”

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Monday, April 5, 2010

Only 25 Days left

Just a friendly reminder that there are only 25 days left if you want to take advantage of the Federal Housing Tax Credit. For those of you looking to buy a home for the first time, that's $8,000 credit if you qualify, and for those who have previously owned a home, it is up to $6,500! You have to be in contract by April 30th, and close on your house by June.


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Pending Home Sales Jumped More Than 8% in February - 4/5/2010 9:47:00 AM - HousingZone.com

Some good news from Housing Zone:

Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of Realtors (NAR).

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said the improvement is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he said. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”

Details of the rise in the index are as follows:

  • In the Northeast it rose 9 percent to 77.7 in February and is 18.9 percent higher than February 2009.
  • In the Midwest the index jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago.
  • The South increased 9.2 percent to an index of 107.0, and is 17.5 percent higher than February 2009.
  • The West fell 4.8 percent to 98.0 but is 14.6 percent above a year ago.

“Anecdotally, we’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit,” Yun said.

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Thursday, March 11, 2010

Foreclosures Drop for 2nd Consecutive Month

U.S. mortgage foreclosure filings dropped for a second straight month in February, and notched the smallest annual increase in four years as housing-rescue efforts contained activity. According to real estate data firm RealtyTrac, foreclosure filings – including mortgage default notices, house auctions and home repossessions by banks – were reported on 308,524 properties in February, down 2% from January, but still up 6% from the year-ago month.

* One in every 418 U.S. housing units received a foreclosure filing in February.
* More than 300,000 properties received foreclosure filings for a 12th straight month.
* Real estate-owned properties nationwide were down 10% from the previous month, but up 6% from February 2009.
* Default notices were up 3% from January, but down 3% from February 2009.
* Scheduled foreclosure auctions were down 1% from January, but still up 16% from February 2009.

Nevada remained highest for the 38th straight month. One in every 102 Nevada housing units received a foreclosure filing during the month of February – more than four times the national average. Arizona and Florida documented nearly identical foreclosure rates, with one in every 163 housing units receiving a foreclosure filing in February. Florida increased nearly 15% in February from January. The foreclosure rate in California ranked fourth with one in every 195 housing units receiving a foreclosure filing. Michigan's foreclosure rate ranked fifth highest with one in every 226 housing units receiving a foreclosure filing in February. Other states with February foreclosure rates among the nation's top 10 were Utah, Idaho, Illinois, Georgia and Maryland, the report showed.

Critics charge that foreclosure-prevention programs have failed to adequately address the trend's current drivers, and are merely capping monthly foreclosure activity. Other criticisms include the shortfall of the government's Home Affordable Modification Program to adequately address negative equity mortgages, leaving many unqualified for refinancing and preventing some from selling their homes.

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Monday, March 1, 2010

Housing’s Crystal Ball

HOME buyers heading into real estate’s busy spring season face a tricky question: should they buy soon, before mortgage rates increase, or wait a few months, when housing prices are finally expected to hit rock bottom?

Of course, the assumptions at the core of that question could easily fall through. But rarely in recent years have economists from the mortgage and housing industries been so closely aligned in their short-term nationwide forecasts as they seem to be now.

Economists are generally predicting that mortgage rates will begin to edge up in late March, settling at about 5.5 percent, possibly as high as 6 percent, for a 30-year fixed-rate loan. The rate today is around 5 percent. They also expect that the inventory of foreclosed homes will grow through the summer, saturating the market with cheap properties and keeping overall prices low.

“I wouldn’t rush,” said Mark Zandi, the chief economist at Moody’s Economy.com, “but if I found a house I was excited about, I wouldn’t wait. You might not be buying at the very bottom, but you’ll still get a great rate, and if you stay for more than a few years, you’ll be rewarded.”

By that time, he added, home values will have appreciated.

Two factors could push rates higher, economists say. First, the Federal Reserve is set to stop subsidizing the mortgage market sometime next month, when it exhausts the roughly $1.25 trillion earmarked for mortgage-backed securities sold by Fannie Mae and Freddie Mac. The government stepped in as a buyer during the mortgage market crisis, when most investors had rejected these securities. Economists expect investors to re-enter the market, but only if rates on the securities become more attractive.

Mortgage rates also typically move in lockstep with the long-term economic outlook. Economists generally believe that the nation is in the early stages of a slow recovery, and that as the recovery proceeds, interest rates will go up.

Mr. Zandi and Jay Brinkmann, the chief economist for the Mortgage Bankers Association in Washington, are both predicting that rates will not exceed 5.5 percent this year. If they rose beyond that level, Mr. Brinkann said, the federal government would very likely resume its subsidies rather than risk damaging the real estate market.

But Cameron Findlay, the chief economist for LendingTree.com, predicted that rates could go as high as 6 percent without any government intervention.

Mr. Findlay also studied the mortgage burden of households across the nation, as a guide to how quickly particular states could recover from the recession.

In New York state, for instance, the average mortgage payment is $1,326, or about 34 percent of the average household’s income ($47,349), Mr. Findlay said. The state’s unemployment rate is 9 percent, which is slightly lower than the national average of 9.7 percent. Mr. Findlay’s data did not separate New York City from the rest of the state.

Connecticut’s ratio of mortgage debt to income is lower, at 24 percent, and the unemployment rate is also lower, at 8.9 percent, which he says means people are generally better positioned to buy homes than in New York.

New Jersey’s mortgage debt-to-income ratio is also lower than New York’s, Mr. Findlay said, at 26 percent. But the state’s unemployment rate is 10.1 percent, he added, and that means its housing recovery will probably trail New York’s.

Mr. Zandi of Economy.com said he expected the nation’s housing prices to fall another 8 percent during 2010 and bottom out by the end of the year, 34 percent lower than they were at the market’s peak in the spring of 2006.

Housing prices will increase once foreclosures start to fall. “It will be a number of years before prices really start to rise in a normal way,” Mr. Zandi said.



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Thursday, February 25, 2010

Early Signs of the Real Estate Recovery

From Mint.com:

MNT-HOME-SALES-R6

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Friday, February 19, 2010

Builder Confidence Improves in February

Builder confidence in the market for newly built, single-family homes rose two points to 17 in February as favorable home buying conditions and signs of healing in the job market helped boost the National Association of Home Builders/Wells Fargo Housing Market Index.

Factors that have helped boost confidence include:

- Continued low interest rates
- Attractive home prices that appear to have stabilized in many markets
- The availability of the home buyer tax credit
- the improving employment market

Several limiting factors are still weighing down builder expectations, including the large number of foreclosed homes on the market, the lack of available credit for new and existing projects, and inappropriately low appraisals tied to the use of distressed properties as comps.

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months, as well as asking builders to rate traffic of prospective buyers. Regionally, February’s HMI results were mixed. While the Midwest and South each registered two-point gains, to 13 and 19, respectively, the Northeast and West each registered one-point declines, to 19 and 14, respectively.



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