Housing Starts Jump 14.6% in January

Housing starts in January reached their highest rate in four months, increasing more than analysts expected, the Commerce Department reports. Housing starts jumped 14.6 percent to a seasonally adjusted annual rate of 596,000 units.

Housing starts in January were helped by a 77.7 percent jump in multi-family homes. Single-family home construction, on the other hand, fell 1 percent.

Meanwhile, new home completions dropped to a record low of 512,000 units in January, falling 9.5 percent from the previous month.

And after housing permits surged in December by 15.3 percent, housing permits for future housing projects sank in January. New building permits dropped 10.4 percent to a 562,000-unit pace in January--mostly pulled down by a drop in multi-family and single-family unit permits.

Tarrant County foreclosure postings down 7 percent

Residential foreclosure postings dropped 7 percent in Tarrant County for the March 1 auction, while the Dallas-Fort Worth area saw a 9 percent decline, the Foreclosure Listing Service said Thursday.

In Tarrant County, 1,697 foreclosures were posted, compared with 1,834 a year earlier. March postings were also down 10 percent from February.

For the region, which includes Tarrant, Dallas, Denton and Collin counties, 5,071 foreclosures were posted, down from 5,548 a year earlier. The Addison-based real estate research firm said postings in the four counties have topped 4,000 for 30 consecutive months.

"Residential posting activity has been on the high end of the scale for some time now," said George Roddy Sr., the firm's president. "Posting activity tends to fluctuate at least some each month.

"The fact that postings filed for the upcoming auctions in March were about 9 percent lower than both this time last year and compared to last month does not elicit much excitement."

In the year's first quarter, Tarrant County postings increased 4 percent, to 5,439 from 5,234 a year earlier. It was the second-highest quarter, trailing only the fourth quarter of 2009, when 5,535 postings were filed, Roddy said.

Quarterly postings for the region were flat. From January to March, 16,194 postings were filed, a slight increase from 16,137 postings a year earlier. Collin County saw a 4 percent decline in the quarter, and Dallas County a 1 percent drop.

The auctions are held on the steps of the Tarrant County Courthouse. Postings must be filed with the county at least 21 days before the auction.

Generally, 25 percent to 40 percent of postings result in an actual foreclosure. In many of the other cases, homeowners are able to make up the arrears.

Mortgage Rates Hold Mostly Steady This Week

Mortgage rates mostly remained steady for the week, according to Freddie Mac’s weekly report on average mortgage rates.

The average 30-year fixed mortgage rate increased just slightly this week to 4.81 percent from 4.80 percent the week prior. Mortgage rates have been steadily inching upward since reaching a 40-year low in November of 4.17 percent. Meanwhile, 15-year rates dropped to 4.08 percent this week from 4.09 percent last week.

Five-year adjustable-rate mortgages also fell slightly to 3.69 percent from 3.7 percent last week.

"Mortgage rates held relatively stable this week on news that the economy improved and inflation remained in check at the end of 2010,” says Frank Nothaft, chief economist at Freddie Mac.

Source: “Mortgage Rates Show Mixed Results This Week,” Freddie Mac (Feb. 3, 2011)

Mortgage Applications Bounce Back

U.S. mortgages were back on the rise last week after a holiday-related slowdown in mid-January, the Mortgage Bankers Association reported.

Mortgage applications gained 11.3 percent in the week ended Jan. 28, according to MBA’s seasonally adjusted index. In the week prior, applications had fallen nearly 13 percent.

Meanwhile, refinancing applications rose 11.7 percent. Loan requests for home purchases also increased 9.5 percent.

Source: “U.S. Mortgage Applications Rose Last Week,” Reuters News (Feb. 2, 2011)

December Existing-Home Sales Jump

Existing-home sales rose sharply in December, when sales increased for the fifth time in the past six months, according to the National Association of REALTORS®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 12.3 percent to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November, but remain 2.9 percent below the 5.44 million pace in December 2009.

Lawrence Yun, NAR chief economist, said sales are on an uptrend. “December was a good finish to 2010, when sales fluctuate more than normal. The pattern over the past six months is clearly showing a recovery,” he said. “The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”

The national median existing-home price for all housing types was $168,800 in December, which is 1.0 percent below December 2009. Distressed homes rose to a 36 percent market share in December from 33 percent in November, and 32 percent in December 2009.

“The modest rise in distressed sales, which typically are discounted 10 to 15 percent relative to traditional homes, dampened the median price in December, but the flat price trend continues,” Yun explained.

Mortgage Rates Drop Slightly

Mortgage rates didn’t fluctuate too much this week, dropping only slightly in some cases while the conforming 30-year fixed mortgage rate held unchanged at 4.94 percent for the week, Bankrate.com reports.

Bankrate.com reports the following average rates:
• 15-year fixed mortgages fell to 4.29 percent.
• Large jumbo 30-year fixed rates dropped slightly to 5.57 percent.
• 5-year adjustable rate mortgages fell to 3.88 percent.

“The average 30-year fixed mortgage rate has been particularly docile, with the average rate fluctuating less than one-tenth of a percentage point over the past month,” according to Bankrate.com. “A heavy dose of economic data and ongoing debt issuance by the U.S. Treasury have the potential to introduce some volatility to mortgage rates over the next week.”

Mortgage rates have remained at historic lows for several years. The last time mortgage rates were above 6 percent was November 2008.

Source: “Bankrate: Mortgage Rates Mostly Lower,” Bankrate.com (Jan. 13, 2011)

Resolving to buy a home in 2011? Resolve now to do it right

Many people start the new year with resolutions about losing weight, starting a new physical fitness routine, or getting their financial house in order. How many of you are making resolutions about buying a home?

All resolutions are only achievable if you start with realistic expectations. The resolution's goal may be very short-term (think … I will finish mailing my Christmas cards by January 15) or longer-term (think … I will fit into my old high school dress in time for the reunion). The experts agree there are two keys to success in achieving your goals. First, commit the goal to paper. Second, tell a friend who will hold you accountable for progress toward the goal. The same keys are critical to achieving success when resolving to purchase a new home.

Buying a new home doesn't just happen. Most homebuyers spend considerable time, effort, and thought when searching for their next house to call "home." Buying your next house is not as simple as going to the store and buying a loaf of bread. You can't see through the wrapper, you don't know how the house is going to fit your lifestyle or budget and, until you talk to a lender, you don't even know what kind, style, or size of home you can afford. Like all resolutions, buying a house requires commitment and effort.

For 2011, it's more important than ever to have a homebuying plan. In the last month or so, interest rates on home loans have gone up about one-half point. That means that the $150,000, 4% fixed-rate, 30-year home loan you might have secured in November will cost about $50 more per month in January just to pay the extra one-half percent interest on the loan. You'll have to pay an extra $600 a year to live in the exact same house. And, you will need about $1,500 additional income each year just to qualify for the home loan. Most financial gurus are predicting mortgage interest rates will rise in the foreseeable future. Even if the price of your dream home does not go up, the monthly payment could rise dramatically if the gurus are right and interest rates continue to rise.

Without a strong commitment to your house-buying resolution, you could miss out on the home of your dreams or the "buy of the year." It's about as easy to begin a diet tomorrow, as it is to begin your home search tomorrow. There's always an excuse to put off starting something important; that piece of pie looks tasty and the diet will just have to wait. The same is true with a house purchase. You buy the new shoes, get the new car, or spend extra money on a nice dinner out. The next thing you know, the month is gone, the year is gone, the money is gone, and you are no closer to homeownership.

So, how do you make a commitment to buying a home? First, follow the expert advice and commit your plans to paper. Don't just make a mental note about buying a house, actually write down your goal: "I will buy a house in 2011." Once you write your goal, take the time to write down exactly what items are important to you about your next home. Do you want three bedrooms or four? It's important to have a yard (big or small), or perhaps you want "country property" on one or more acres? What is more important, a gourmet kitchen or a large family room for entertaining? How far are you willing to commute to work? If you have children, is it important that the home be located in a specific school district? As you begin thinking about your next home, many more "wants" for your next house will come to mind.

The next step in the resolution process is to tell a friend. I recommend when committing to purchasing a house that you don't tell just any friend but rather, tell a knowledgeable friend. Tell someone who knows the "ins & outs" of the homebuying process. Tell someone who has first-hand experience with the entire process – what houses are for sale, how home financing works, what to expect from a home inspector, the meaning of title insurance, what did other houses in the neighborhood sell for? I strongly recommend the friend you select to help you keep your resolution and achieve your goal of homebuying be a Texas REALTOR®.

A Texas REALTOR®, under state law and the National Association of REALTORS® Code of Ethics, is obligated to look out for your best interests. The term REALTOR® has come to connote competency, fairness, and high integrity, resulting from adherence to a lofty ideal of moral conduct in business relations. When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.

As a Texas REALTOR®, I would be glad to help you keep your resolution to purchase a house in 2011.

Sellers … let go (while taking control)

As a seller, you have no control over some things that homebuyers factor into their purchase decisions. Location comes to mind. You can't do much about the quality of schools in your area or the nearby shopping options. My first house had no attic.

On the other hand, there are many things you can do to make your property more attractive to buyers. You could take care of long-needed repairs. You could tackle a remodeling project or spruce up your landscaping. You could "stage" your home to increase its appeal. And then there's the biggie … you have control over the
asking price.

These decisions and others will affect how long your home is on the market and how much you sell for. The key is to figure out which changes will be most successful in helping you meet your goals.

As a Texas REALTOR®, I can help you understand what actions will make the biggest difference to buyers. Once you know more about these factors, you can make good decisions about how to proceed with the sale of your house.

Marty Kramer | Consumer columnist

10 Real Estate Predictions for the New Year

The start of a new year is often a time of reflection, as well as a time of anticipation for the future. It’s no different for real estate professionals, many of whom have weathered the recession and are now optimistic about 2011. From the return of new construction to the creation of healthier homes, the following are 10 residential real estate trends they see for the coming year:

1.) Building is back: After three years of little to no new development, John Wozniak of Wheaton, Illinois-based J. Lawrence Homes said the builder is excited about 2011. “After a couple of very challenging years, the market for new-construction housing is showing signs of life. Slowly but surely, homes are selling and new properties are breaking ground, such as the two communities we opened this year in Lynwood and North Aurora,” he said. “We’ve had encouraging sales and I believe they point to an uptick for 2011.”

2.) Apartments continue to thrive: If there has been one bright spot over the past few years in the real estate industry, it has been the rental market.

“People have realized the many benefits of renting, from having more flexibility with your housing commitments to a higher level of finishes and amenities. And, this demand will continue to outpace supply,” said Steve Fifield, president of Fifield Cos. “Appraisal Research reports that Chicago’s Class A downtown apartments are at a nearly 95 percent occupancy rate, and those numbers will continue to stay very strong for 2011.”

3.) Opting for established: The mega-communities in the exurbs are a thing of the past, said Brian Brunhofer of Meritus Homes. Instead, 2011 will see builders move toward smaller neighborhoods or pockets of homes in established communities. “Close-knit communities with respected homeowner associations, mature landscaping and neighbors waiting to greet you – that attractive quality of life is going to appeal to buyers much more in 2011.”

Seconding the movement toward established communities is Jeff Benach of Lexington Homes. “Buyers are looking for a safer investment for their home purchase,” he said. “We won’t see them roll the dice like in the past on a fast-growing town in a far-out suburb. They want a proven area with access to retail development and employment corridors. They don’t want to wait for the surrounding area to be built. They want everything already in place,” he said.

4.) Make it modern: Chalk it up to “Mad Men” or simply a pendulum swing in taste, but either way transitional and warm-modern design will be prevalent in 2011, said Brian Goldberg, a partner in LG Development Group. “Our clients are looking for a cleaner approach to the style of their homes – more mid-century and less traditional with a warm and tailored aesthetic,” he said.

Ray Hartshorne, principal of Hartshorne Plunkard Architecture, agrees. “From the single-family side, our clients are gravitating toward modern design instead of strictly traditional, that is simple, clean line exteriors and open floor plans that are comfortable for the family and versatile for entertaining,” he said. “In the multi-family sector, now more than ever, we are seeing an interest in contemporary-themed and luxurious interior design for lobbies and common areas.”

5.) Buying for the long term: The Census shows the average person moves about 11 times, but Jim Chittaro, president of Smykal Homes, predicts that number will slowly decrease. “Thankfully, the idea of a home as a short-term moneymaker is essentially gone, so when people do buy, they’ll do it with the intention of staying put for closer to 10 years rather than two to three,” he said

This means people will be studying floor plans more closely, to ensure the home will grow with them, Chittaro continued. “Buyers want to be sure the home will suit their needs not only now, but down the road, whether they plan to expand their family or prepare for kids to leave the nest,” he said. “Floor plans that can adapt to lifestyle changes with flexible features like second family rooms should do well in 2011.”

Brunhofer agrees that more buyers will be looking for a home for the long haul. “It’s not just floor plans that buyers are going over with a fine-tooth comb,” Brunhofer said. “Our buyers are very careful about school districts. They want to know they can send all of their children to a school with a proven track record and not have to relocate a few years down the road to ensure a good education.”

The shift to long-term buyers will also put long-term builders in the spotlight. “People are hesitant to buy a home from a builder or secure a mortgage from a lender they don't perceive to be well-established,” said Benach. “Buyers want to know their builder is committed to them and the community, and that it’s not about making a quick buck or boosting a shareholder’s financial interest. That personal connection is really important.”

6.) Upping the ante on amenities: In 2011, developers will continue to create new and exciting amenities to differentiate their properties and keep them relevant in the marketplace, said Tony Rossi, president of RMK Management Corp. “Renters are looking for something special, like an outdoor grilling area or special events like dance lessons,” he said.

But it’s not just enhanced outdoor spaces in apartments that will matter in 2011. Benach thinks condo and townhome buyers will also place a higher importance on outdoor space in the coming year, especially those who live in an urban setting.

“People may realize they don’t need to live with as much square footage inside their home, so to compensate they’ll want a place to call their own outside their home,” said Benach.

7.) High-tech takes over: Running your home entertainment system, appliances and lighting from a centralized control panel is old news. Going forward, we’ll see more homeowners want a smart phone app that can control their residence remotely, noted Goldberg.

“Each year, the demand increases for home technology that makes homeowners’ lives easier,” he said. “We’ll get to a point, and some of our clients are almost there, where homeowners can leave work and by activating an app on their phone have all of their home electronics queued up when they walk in the door – the oven is preheated, lights come on and a TV show turns on when motion sensors recognize they’ve walked into the room. It may sound like a movie, but some of this technology we can build into homes now.”

8.) Smaller homes stay the course: The average size of a new home decreased for the first time in decades from 2008 to 2009, and that trend will continue into 2011, said Benach.

“This trend is fueled by first-time buyers with smaller budgets, requiring smaller homes,” he said. “New buyers will have to be more conservative with their mortgages and will need to pay a higher percentage for a down payment, which means they’ll need a home with a smaller price,” he said. “People won’t be buying more than they need. So to meet their needs, we’ll see builders continue to trim the size of their homes and look for new ways to make square footage work harder.”

9.) Green and gorgeous: As the green movement continues to grow, high-end builders and developers have found ways to make homes both green and gorgeous. “The old mind set was that a green home couldn’t also be stylish and sophisticated. It was as if the two concepts were mutually exclusive,” said Hartshorne. “But new products and forward-thinking design have proved that today’s homeowners can have both. Also, building a green home doesn’t have to break the bank. We are constantly being introduced to attractive, sustainable building materials that are more cost effective than in the past.”

10.) Healthy homes: When you consider a study by the National Institutes of Health that found the number of people with allergies is as much as five times higher than 30 years ago, the trend toward building homes with a healthier environment will also gain ground in 2011, said Goldberg.

“Indoor air quality, low VOC paints and adhesives, and all-around healthier materials are becoming more and more of a concern for people building homes – especially for those with children,” he said.

Rick Croce, from Wheaton-based Smykal Renovations, said this trend applies to existing homes, too. “Due to the economy, many people have decided to stay put in their existing home, which means they’ll be investing in changes to make it look better and live healthier,” he said. “We expect to be pricing out more jobs that include installing HVAC systems with better filtration, using low-VOC materials and even replacing old doors and windows to safeguard against exterior pollutants.”

Housing Starts Predicted to Hit 3-Year High

Housing starts will probably reach a three-year high of 739,000 in 2001, creating about 500,000 jobs and helping trim the unemployment rate to 9.1 percent, said David Crowe, chief economist for the National Association of Home Builders, in an interview with Bloomberg.

“This is an ugly economic cycle,” he said. “We need job creation to get people comfortable with buying a home. If they do that, we’ll create jobs that will reinforce that home buying and fuel additional job growth.”

Job growth in other sectors, as well as population growth, will also likely have an effect. The number of U.S. households will rise 0.7 percent to 118.7 million in 2011, the largest annual gain since the beginning of the housing crisis in 2007. Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, N.J., expects jobs to rise by an average of 200,000 per month in 2011.

The CEO of luxury home builder Toll Brothers is optimistic. “The recovery is here to stay,” said Douglas Yearley. “I think 2011 will be an improving year, but I think 2012 will be a big year for us.”

Source: Bloomberg, Joshua Zumbrun and Kathleen M. Howley (12/28/2010)

2011: The Year a House Again Becomes a Home

by THE KCM CREW on DECEMBER 29, 2010

For almost a decade now, every time we talked about real estate we immediately discussed money. We didn’t talk about the value of a home but instead about the price of the house. We didn’t worry about a roof over our heads but instead the ceiling on our interest rate. We didn’t care as much about where we raised our family as we cared about how much we increased our family’s net worth.

That will change in 2011. The KCM Crew believes very strongly that real estate will return to what it has been for the 200+ year history of this country: a place for us and our families to live comfortably. It will also prove to be a great long term investment as it always has been.

Our parents and our grandparents didn’t buy their homes as a short term financial investment. They bought it so they had a place of their own to come home to at the end of the day; a place to raise their family; a place they could feel safe.

Sure they dreamed of a ‘mortgage-burning’ party. They realized it was a form of forced savings. They were taught that, if they paid their mortgage every month, they would wind up with a little retirement account decades later.

And, they realized that wouldn’t happen if they rented.

However, in the last decade, we somehow forgot that the financial aspect was the serendipity not the major reason to buy. We believe that 2011 will be the year that people return to the historic reasons families purchased a home. This is the year when we again remember that homeownership is a major part of the American Dream.

What about the challenges to a housing recovery? Let’s look at them.

The Economy

Most reports are showing that the economy is doing better than expected. This shopping season provided additional proof of this point. As the economy recovers, so will consumer confidence. This will be great news for housing.

Unemployment

There is much talk about a ‘jobless recovery’. We agree that unemployment will continue to be a challenge. However, when you talk about housing, it is not the unemployment rate that is all telling. Instead, it is the change in the rate. As unemployment skyrocketed, people started to worry about their own job. Any change creates concern. Unabated concern turns to fear. Fear causes paralysis. The spike in unemployment has plateaued. People no longer have the felling that ‘they are next’. The fear will diminish and people will start moving on with their lives. This too will be great news for housing.

Interest Rates

It seems the bottomless pit in which rates have been falling does have a floor after all. And it seems we have found it. Those purchasers who had been waiting for the best interest rate may have already missed it.

Prices

Economists are projecting that prices will not see any appreciation in 2011. Sellers who had been waiting for 2006 to return will come to the realization that waiting any longer makes little sense. They will instead decide to get on with their lives and sell this year.

Prices probably will soften further. However, the possible savings to potential buyers will be minimized by a rise in interest rates.

Bottom Line

This is the year that normalcy returns to real estate. People will buy and sell based on the desire for a better life for themselves and their families. They will realize that is the true value of homeownership and they will be willing to pay for that value.

Tax Deal Has Home Owner Benefits

Home owners were among those who benefited from the tax compromise that President Obama signed last week. Among the most home owner-friendly provisions are:

Deductions for private mortgage insurance: The agreement extends through 2011 a provision allowing home owners to deduct mortgage insurance premiums. To qualify for the full deduction, homeowners must have an adjusted gross income of $100,000 or less. Taxpayers with AGI of $100,000 to $109,000 can claim a partial deduction. Borrowers can’t deduct mortgage premiums on home loans that closed before 2007.

Tax credits for energy-efficient home improvements. Home owners who install insulation, new windows or other energy-saving improvement in 2010 are eligible for a tax credit worth 30 percent of the cost up to a lifetime maximum of $1,500. Improvements must be bought and installed by Dec. 31. Those who delay improvements to 2011 still get a tax credit, but it is capped at $500.

Source: USA Today, Sandra Block (12/21/2010)

Four Steps to Sustainable Homeownership

Purchasing a home is an exciting step in anyone’s life, but there is more to the process than just getting approved for a loan. In fact, it is even more important to make certain you are ready to keep your home for the long term. To that end, here is a look at 4 things you can do to make your homeownership sustainable.

Step #1: Increase Your Knowledge

The first step you need to take is to learn as much about your mortgage loan options as possible. This way, you can be certain to apply for the best type of loan to meet your personal needs. In addition to learning about the pros and cons of various loan options, you need to learn more about how credit scores, discount points and other factors affect the overall cost of a loan. As part of this process, you should contact your local HUD housing counselors to learn more about special buyer programs that might be available in your area.

Step #2: Get Your Finances Under Control

Before you can purchase a home, you need to be certain you will qualify to buy it. If your credit score is below 620, you will be better off taking some time to bring up your score before you make a purchase. This way, you can keep your interest rates down, which will help keep your mortgage payments down and will make it easier for you to keep up with your monthly payments. Of course, by getting your finances under control before you buy, you will also be more likely to be able to stay on top of your bills after you make a purchase.

Step #3: Create a Budget

In order to remain safely within your means, your mortgage payments should never be more than 28 to 33 percent of your total monthly gross income. If you have other debts, such as car payments, student loans, credit cards or child support payments, the total cost of these debts and your mortgage payment should not exceed 36 to 40 percent of your monthly gross income. Therefore, before you make a purchase, carefully analyze your debts and create a budget that will ensure your monthly payments remain below this figure while also leaving enough money available to put toward a savings plan.

Step #4: Get to Saving

Before you start looking for a home, you should have plenty of money saved up to apply toward the purchase of your home. In most cases, Earnest money, which is a deposit provided to the seller, will be required when making an offer. Earnest money requirements can range anywhere from $500 to two percent of the purchase price. In addition, depending upon the type of loan you get, you might need to make a substantial down payment or closing costs. In addition, by establishing good saving habits now, you will be better prepared to handle your finances effectively in the future.

Growing Economy Big Factor for Buyers

Economists are surprisingly positive about the impact of rising interest rates on home sales.

The consensus is that while rates are up from where they were, they are still at historically low levels and rock bottom rates are only a part of what encourages people to buy homes. More important factors could be jobs and other financial issues, which appear to be improving.

“Since the recent rate increases have essentially just undone the declines from earlier months, it is hard to see why sales should drop significantly further from current levels,” wrote Goldman Sachs economist Ed McKelvey in a research note published Thursday evening.

Source: The Wall Street Journal, Nick Timiraos (12/17/2010)

Home Building Edged Up in November

Housing starts increased 3.9 percent last month from October, the U.S. Department of Commerce reports.

Despite the gain, activity remains 45 percent below the threshold — 1 million units annually — that is considered healthy. And permits, which gauge future demand, slid 4 percent to the lowest level since April 2009.

In November, builders broke ground on 555,000 units, fueled by a 6.9 percent jump in construction of single-family homes; multifamily projects, conversely, declined 9.1 percent.

Source: Boston Globe (12/17/10)

Things to Consider Before Doing a Remodel

Because contractors continue to have difficulty finding work in many parts of the country, many home owners are enjoying home-remodeling bargains.

Before signing a contract, here are some things Tara-Nicholle Nelson, author of "The Savvy Woman's Homebuying Handbook" urges people to consider:

· When the market is flooded with properties, buyers are frequently unwilling to pay for upgrades, although an upgraded home may sell more quickly than a dated one.
· Sellers concerned about guaranteeing a remodeling return on investment should focus on preserving the value and the likelihood of resale instead of on aesthetics.
· Don’t overbuild. McMansions have fallen out of fashion.

Source: Boston Globe, Tara-Nicholle Nelson (12/06/2010)

Well-Kept Yards Most Important Factor in Determining Neighborhood Safety

A new survey conducted by Relocation.com finds that 75 percent of Americans believe the most important factor in determining a neighborhood's safety is the up-keep of surrounding homes, especially the conditions of the front lawns, which trumps even Googling neighborhood statistics to get a feel for a community.

The latest Relocation.com survey finds that 74 percent of respondents indicated they would select a neighborhood based on "word-of-mouth" or its local reputation over any other reason, while 67 percent of the respondents say they pay attention to local crime reports and statistics as reported in the local media. Less compelling, according to the survey, are "a gated community with security patrols" and "proximity to a police or fire station" when determining the safety of a neighborhood.

"It's interesting to see how home buyers determine neighborhood safety based on the neighborhood's appearance and not as much based on police statistics or crime reports," says Relocation.com Chairman and Founder Sharon Asher. "Our findings suggest that some home sellers who are struggling to generate interest may want to go the extra mile and help their neighbors with landscaping needs in order to create buyer interest."

The Relocation.com survey was conducted in mid-October, 2010, in a continuing effort to provide information on lifestyle factors that drive moving and relocation decisions in the U.S.

NAR Praises FHA's Increased Stability

The latest independent audit of the Federal Housing Administration shows the agency’s financial condition has improved from last year, when it announced its capital reserve fund had fallen below the 2 percent level mandated by Congress. The annual audit shows that the capital ratio for the single-family portfolio rose from 0.42 percent to 0.79 percent over the past year.

The audit, which calculates the financial condition of the agency’s insurance fund, also showed the mortgage insurance fund grew more than $1 billion in 2010 and reserves are expected to remain above $9.9 billion even if home prices were to fall further. The audit indicates that FHA will most likely not require a bailout now or in the future.

“As the leading advocate for home ownership, the NATIONAL ASSOCIATION OF REALTORS® strongly supports FHA’s mortgage insurance programs,” NAR President Ron Phipps said. “FHA announced major changes earlier this year and took critical steps to strengthen and ensure its long-term financial soundness, and those efforts have paid off.”

FHA’s audit reflected a change in home values, and was not tied to excessive increases in defaults or unsound underwriting practices. In fact, the credit quality of FHA borrowers has increased significantly in the last several years; the average credit score for FHA customers has grown to 693, and less than 8 percent of the agency’s purchase borrowers this year had FICO scores below 620. The capital reserves are not FHA’s only reserve fund; FHA also has a cash reserve account separate from the capital reserve – and actual total reserves have grown to $33 billion.

“The future health of FHA’s reserve funds depends heavily on the direction of home values in the coming years. Home values have shown patterns of stabilization over the past 18 months, and in a recent independent survey, most economists expect modest home price gains over the next 3 years, so FHA’s reserves should steadily improve,” Phipps said.

FHA has played a key role in providing mortgage liquidity to qualified home buyers in recent years and has greatly increased its market share; according to the agency, FHA guaranteed nearly 40 percent of home purchases in the past year.

NAR is working closely with FHA to reassess and amend their lending policies so even more qualified home buyers can become home owners.

Source: NAR

3 Reasons to Sell a Home Soon

What do you tell a client who asks whether to sell a house now or wait? Steve McLinden, real estate adviser with Bankrate.com, offers these three good reasons not to wait, even though the holidays are approaching:

1. The market is improving. Most markets have either turned or are close to turning.

2. All real estate is local. Homes in great locations are always in demand.

3. Spring is coming soon. Many potential buyers are starting their online searches right after the holidays, making mid- to late February a great time to start marketing.

Source: Bankrate.com, Steve McLinden

Commercial real estate outlook improving

By STEVE BROWN / The Dallas Morning News

North Texas commercial real estate experts expect further recovery next year and say they hope the market will be mostly righted by 2012.

The same can be said of the economy.

“We made it through 2009 and are still here,” D’Ann Petersen, business economist with the Federal Reserve Bank of Dallas, said Friday. “We are starting to see some positive signs.”

Petersen predicted “moderate economic growth next year” for the Dallas-Fort Worth area at a breakfast meeting sponsored by The Dallas Morning News.

The commercial property business will follow the economy’s lead. “It will lag any rebound,” Petersen said.

Moody Younger, who manages Grubb & Ellis Co.’s Dallas office, said he’s already seen a great change in business.

“In 2009, you could not find a deal,” he said. “Our revenues are twice what they were last year. In 2011, we will see a lot more.”

Office tenants are more willing to step up and sign a lease, he said.

“Office is leading us out of it this time,” said Younger, who predicts that D-FW office occupancies will be back in shape by 2012. “I think we will take off pretty fast.

“If you are a developer, by the end of 2011 you need to think about building.”

Petersen said jobs in the professional and business service sector have been among the fastest-growing, which will help the local office market and its 23 percent vacancy.

“We are starting to see some export growth, and that will help the industrial building sector,” she said.

The apartment market is considered the country’s strongest real estate industry. And Addison-based Behringer Harvard has been one of the top nationwide apartment investors over the last couple of years.

“When we started buying multifamily in 2008, we would be the only bidder,” Behringer Harvard president Robert Aisner said. “We are now seeing a huge amount of money that believes multifamily will lead the rebound.”

Aisner said his firm is looking at additional property buys.

“Hotels are getting an awful lot of interest,” he said. “If you can buy hotels now, you assume you are at the bottom.”

Total U.S. commercial property investment last year was about $50 billion, Aisner said. That’s down from $500 billion in 2007.

“It’s coming back but coming back slowly this year,” he said.

Herbert Weitzman, chairman and founder of Dallas-based Weitzman Group, said it will be “three years on the outside” before the D-FW shopping center market recovers from the recession.

North Texas has about 190 empty big box stores with more than 3 million square feet of space, he said. But the overall vacancy rate is still significantly less than it was in the late 1980s downturn.

“We think we are stabilized, and retail sales are getting better,” Weitzman said. “If you are creative and stay in business long enough, there will be some great opportunities.”

With retail construction at a virtual standstill, merchants are slowly filling up empty space – even sites that might have once been passed over. “We are filling up centers today that we couldn’t fill up in better times,” he said.

Most of the retailers that have made it through the down economy will survive, Weitzman said.

“We have bottomed out – that’s the good news.”