Buyers Increasingly Suspicious of Foreclosures

Fewer buyers are willing to consider purchasing foreclosed property than they were seven months ago, according to a study commissioned by Trulia.com and RealtyTrac.

Seven months ago, 54 percent of adults surveyed said they would consider purchasing a foreclosed home. In November, only 47 percent of adults say they’d buy a foreclosure.

The chief turnoff is perceived risk, with 80 percent of those surveyed citing hidden repair costs, a tricky buying process, and the possibility that the neighborhood will lose more value and drag the property down with it.

To compensate for these risks, 75 percent say they expect at least a 25 percent discount and 30 percent say they would only buy if there is a 50 percent discount compared with a comparable home that isn’t in foreclosure.

Other findings:

* 56 percent of single/never married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 60 percent in April.
* 43 percent of married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 50 percent in April.
* 42 percent of divorced/separated/widowed adults were at least somewhat likely to consider purchasing a foreclosed home, down from 50 percent from April.

Source: Trulia.com (12/16/2008

Can't Sell? Rent Houses Out

The architect behind mortgage-backed securities Franklin Bank Chairman Lewis Ranieri told Holfstra University conference-goers that the federal government and private partners should remove 1 million homes from the housing market and turn them into lease-to-own rentals in order to turn the economy around.

He blamed the collapse of mortgage-backed securities on a breakdown of checks and balances and scoffed at the way the government is approaching the problem now.

“You can’t do restructuring loan by loan,” he says.

Ranieri, a former chairman at now-defunct Salomon Brothers, supports changes in bankruptcy laws to allow judges to reset loans.

Source: Investment News Daily, Andrew Coen (12/01/08)

Staging Tips for the Holidays

Staging Tips for the Holidays

Before you deck the halls, see how the right holiday decor can help you sell.

By Kara Wahlgren, FrontDoor.com | Published: 11/10/2008

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Over-the-top decorations may distract buyers, but subtle touches like a simple wreath can make your home feel warm and festive.

It's that time of year as calendars are packed with holiday parties, budgets are strained by gift-giving, and the roads are covered in freshly fallen snow. Alas, 'tis not the season for real estate. But the good news is, the brave few house-hunters who do venture out are serious about buying, and stylish trimmings will make them want to ring in the new year in your home.

"Holidays can be personal on a lot of levels, but you want to make sure your decor is neutral," advises Amy Powers, owner of Accent Home Staging & Interiors of Atlanta. "You want to romance your buyer, not invite them to your Christmas party."

Try these tips to get buyers in the right spirit:

• Clean and stage. "Before you decorate, your house needs to be staged," Powers says. If your living room is already piled high with clutter and tchotchkes, your ceramic reindeer collection is only going to add to the sense of overcrowding.
• Create a cozy vibe. The less-is-more mantra of home staging may tempt you to forgo holiday cheer this year. But a few subtle touches like a bowl of pinecones, an evergreen wreath, or a pot of cider simmering on the stove can create a warm and festive feeling in your home.
• Complement your palette. Before you start untangling your tinsel, make sure your holiday collection matches your current decor. If your living room is painted a soothing ocean-blue hue, skip the clashing red garland and opt for white snowflakes or a silver glass-ball wreath. If you've got an earthy color scheme, accent with rich tones like cranberries, forest greens and gold.
• Accentuate the positive. Too many trimmings may distract buyers, but the right accessories can draw attention to your home's best features. Dangle mistletoe in an arched doorway, or display your menorah on the ledge of a bay window; just don't block a beautiful view with stick-on snowflake decals or clutter an elegant fireplace with personalized stockings.
• Go light on lights. Step away from the inflatable snowman, Clark Griswold. One man's "merry" is another man's "tacky," so tone down any garish light displays while your home is on the market. (No, your neighbors didn't pay us to say that.) Instead, use simple string lighting to play up your home's architecture or draw attention to the gorgeous fir tree in your front yard.
• Be an equal-opportunity decorator. Leave the life-sized Nativity scene in storage this year, because overtly religious flourishes may be off-putting to some buyers. "You want to keep neutrality throughout, so you can attract any type of buyer," Powers says. Not sure what qualifies? Powers adds, "No matter what your religion is, you're not going to feel offended by a nutcracker."
• Mind the tree. A tall Christmas tree can help you show off your two-story great room, but make sure the wide base won't overwhelm the floor space. If your living area is on the small side, save space with a skinny tree. Swap the gaudy heirloom ornaments and trim your tree in a cohesive theme such as icicle lights and silver tinsel, for example, or blue and gold glass balls.
• Clear the clutter. A few decorations can stir the holiday spirit, but don't feel obliged to hang every last ornament. "A lot of people, when they decorate, tend to use all the extra space in their house," Powers says. "You still want each space to look as spacious as possible." Limit yourself to a few hints of holiday flair, but stash the rest in the basement for now. If you start to miss your Santa figurines, just remember that with a little luck, you'll be celebrating next year's holidays in a new home. And you can decorate that place any way you please.

Remodeling Looks Like a Bargain as Rates Fall

Prices are falling on building materials and on contractors’ fees, and that’s reflected in a 12 percent drop in consumer spending on home improvements, according to Harvard’s Joint Center for Housing Studies.

"It's hard for home owners to think about spending on their houses when real estate values are falling," says Kermit Baker, a senior research fellow at Harvard. "But with contractors hungrier for business, you'll be able to negotiate better prices, win other concessions and hire better-quality contractors than you could a year or two ago."

In Remodeling magazine's most recent study of returns on remodels, home owners recouped about two-thirds of their costs on a typical home improvement if they sold their home within a year after completing the job. That compares to 87 percent in 2005 at the peak of the housing boom.

Source: Money, Donna Rosato (12/01/08)

Market Tightening: Housing Inventories See Slide

Housing inventories in 29 major metropolitan areas declined 1.6 percent in October compared to levels in September, according to figures compiled by ZipRealty Inc.

Typically home inventories rise in October compared with September, increasing an average of 1.1 percent, says research firm Zelman & Associates.

The number of homes for sale in the 29 metro areas where ZipRealty does business was down 9.3 percent from a year earlier, the company says. This figure doesn’t include foreclosed properties not included in the multiple-listing services.

The data also doesn’t include New York City. Appraisal firm Miller Samuel Inc. says the October inventory there was up 6.3 percent from September and up 37 percent compared with October 2007.

Source: The Wall Street Journal, James R. Hagerty (11/11/08)

Citigroup Plans to Rescue 500,000 Home Owners

Citigroup Inc. announced Monday that it is putting a moratorium on most foreclosures as it reaches out to 500,000 home owners who are not currently behind on their mortgages but who are deemed to be a potential risk.

The company will assign 600 salespeople to assist the targeted borrowers by adjusting their rates, reducing principal, or increasing the term of the loan.

Citigroup reported losses in the last four quarters. Monday’s action is designed to stem the flow of red ink.

"Typically the lender loses the most money when a house goes into foreclosure," says Barry Zigas, director of housing policy at the Consumer Federation of America.

Source: The Associated Press, Sara Lepro (11/10/08)

Fed, Central Banks Cut Key Rates

In an unusual coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to keep an escalating financial crisis from becoming a global economic meltdown.

The Fed cut its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England reduced its rate by half a point to 4.5 percent, and the European Central Bank sliced its rate by half a point to 3.75 percent.

The central banks of China, Canada, Sweden, and Switzerland also cut rates. The Bank of Japan said it strongly supported the actions.

"The recent intensification of the financial crisis has augmented the downside risks to growth," the Fed said in explaining the coordinated action, the latest in a series of bold moves intended to spur lending and revive the global economy.

The Fed's action will reduce borrowing costs almost immediately for U.S. bank customers whose home equity and other floating-rate loans are tied to the prime interest rate. Bank of America, Wells Fargo, and other banks cut their prime rate by half a point to 4.5 percent after the Fed announcement.

White House spokesman Tony Fratto welcomed the cooperation among the Fed and other countries' central banks to battle the crisis. "It's important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," Fratto said.

Source: Associated Press, Jeannine Aversa (10/8/08)

Renting Out a Second Home Offsets Costs

Renting out a second home can be a source of income in a tight economy, but the competition is increasing, says Christine Karpinski, author of How to Rent Vacation Properties by Owner.

Management companies charge between 30 percent and 40 percent, but many renters have success advertising on VRBO.com or Homeaway.com and handing the details themselves, according to Karpinski.

Owners say they don’t make a ton of money renting out their second home, but breaking even is a realistic goal.

In this economy, you may have the greatest chance of success if the home is located less than two hours from a city, Karpinski says.

Source: Star-Tribune, John Ewoldt (09/09/08)

Mortgage Rates Drop Below 6%

For the first time since early spring, mortgage rates have fallen below the 6-percent threshold.

Freddie Mac reports that 30-year fixed loans came in at an average of 5.93 percent this week, down from 6.35 percent a week ago and 6.31 percent at the same time last year.

A borrower taking out a $200,000 mortgage at 5.93 percent would pay $1,190 for monthly principal and interest payments, which is $54 less than the payments on last week's rate.

"Consumers see a five in front of mortgages, and they get excited," says Keith Gumbinger, a vice president at research firm HSH Associates.

Source: The Washington Post, Dina ElBoghdady (09/12/08)

Buyers Crave Green More Than Extra Space

Buyers of custom homes are increasingly interested in money-saving features like extra insulation and energy-efficient furnaces, rather than game rooms and space for in-laws, according to a Home Design Trend Survey by the American Institute of Architects.

Sixty-eight percent of the survey's respondents said customers were requesting extra insulation in the attic compared with 56 percent a year ago.

Two-thirds of respondents said green products such as tankless water heaters, double or triple-glazed windows, and sustainable flooring products such as bamboo or cork were gaining in popularity.

Only 8 percent of the survey’s respondents said game rooms were increasingly popular among their customers, down from 23 percent last year. Home offices also declined in popularity even though they remain the most requested specialty room. Last year, 61 percent of custom home buyers wanted them; this year only 41 percent made the request.

Source: Reuters News (08/09/2008)

End in Sight for Seller-Funded Down Payments

Prospective homeowners have until Oct. 1, 2008, to use down payment assistance from a seller to purchase a house.

The Housing and Economic Recovery Act of 2008 signed into law in July bars such seller-funded aid on Federal Housing Administration-backed mortgages.

Lawmakers added the provision to the housing relief package because about 40 percent of FHA borrowers who went into foreclosure in the past year received down payment assistance from a seller.

However, some industry professionals are worried that the rule change will keep some buyers out of th market.

Scott Syphax, president of The Nehemiah Corp., which runs a privately funded down payment assistance program, cites a report by housing research firm Zelman & Associates.

The report found that 10 to 25 percent of potential home buyers will have no way of securing home ownership without seller-funded down payment assistance, and stated that the rule change will have far-reaching implications for the real estate industry at large.


Source: Augusta Chronicle (GA), Tim Rausch (09/02/08), REALTOR.org

Falling Home Prices Curb Divorce Rate

The sluggish housing market in the U.K. has an upside: The divorce rate is falling. In fact, national figures for the U.K. published in late August show the divorce rate last year was the lowest since 1981.

Analysts from real estate services firm Savills say there's a strong correlation between housing prices and the divorce rate.

"As house prices rise, home owners undoubtedly feel wealthier and our supposition is that they also feel able to afford to get divorced," says Lucian Cook, director of Savills Research. "We forecast that the current falls in property prices will result in fewer divorces, even allowing for the overriding downward trend in the UK's divorce rate."

However, family law expert Jill Goldman tells London's Daily Mail that financial woes often will cause arguments and put a strain on relationships; so there may be some divorces that are actually caused by dropping home values.

Sources: REALTOR® Magazine Online, Savills Research, Daily Mail

Where Are Lenders Getting Credit Scores?

Consumers often mistakenly believe that mortgage lenders use only credit scores from Equifax, Experian, TransUnion, and Fair Isaac's myfico.com to gauge creditworthiness.

However, Consumer Reports recently found that lenders also use NextGen FICO scores, FICO Expansion Scores, and Industry Option FICO scores — which take car loans into consideration — as well as custom formulas.

Given that these credit scores or scoring models are not available to consumers, experts say that consumers should not rely solely on available credit scores to determine their likelihood of getting a loan. They would be wise to make timely bill payments, make more than the minimum payment, hold down credit card balances, and retain old accounts.

Additionally, experts say it might be worth keeping tabls on other credit scores, such as Experian's PLUS scores, which are not yet sold to lenders but could be in the future.

Source: Allentown Morning Call (PA) (09/02/08)

Ruidoso Web Cam

Want to view Ruidoso mid-town live?

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Ruidoso Web Cam

First-Time Home Buyer Tax Credit

First-Time Home Buyer Tax Credit at a Glance

• The tax credit is available for first-time home buyers only.
• The maximum credit amount is $7,500.
• The credit is available for homes purchased on or after April 9, 2008 and before
  July 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
• The tax credit works like an interest-free loan and must be repaid over a 15-year period.

Visit http://www.federalhousingtaxcredit.com/ for additional information

Lenders Help Borrowers Avoid Foreclosure

While foreclosures have soared, some home owners have found ways to stave off auction and keep their homes.

In the second quarter of 2008, mortgage servicers that are part of the industry-sponsored Hope Now alliance finished more than 522,000 workouts. That doesn't include home owners who have worked out loan modifications on their own with lenders or those who received counseling or financial aid from charitable groups that aren't part of the alliance.

Here are some of the possible options:

• Lenders agree to a repayment plan, tacking delinquent payments onto the end of a home loan.
• Lenders allow borrowers to switch from adjustable rate to a lower fixed rate. About 14 percent of subprime loans are in default, according to the Center for Responsible Lending.
• Lenders allow some borrowers temporarily to pay less than the full amount of their monthly payment, a rarer measure usually approved in cases of a financial emergency, such as a health crisis.

Source: USA Today Stephanie Armour (09/03/2008)

What to Know About Inheriting Property

Inheriting property can be exceedingly confusing for the heirs, particularly if they plan to sell the property. While getting expert legal advice is the best approach for the person who has inherited property, here is some basic information that can help a real estate professional better understand the situation.

• Every state has a legal process that allows the person who was willed property to transfer ownership of it from the previous owner’s name to the new owner’s name. The attorney assisting with the probate of the will can help fill out the forms. If there is no lawyer involved, sometimes someone in the clerk of courts office can guide the person inheriting property through the transfer process.

• Generally, there is little or no transfer tax or other cost involved because the person who is inheriting the property didn’t pay anything for it.

• When a person dies and title is transferred to a spouse or a child, the due-on-sale clause in a mortgage contract doesn’t apply. Otherwise, while a lender could call the loan, in the current economic climate it is unlikely if the person inheriting the property makes regular payments.

Source: Real Estate Matters Syndicate, Ilyce Glink (08/24/2008)

Throwing Stones at Glass Houses

People who live in glass houses often get more than they bargained for: the relentless glare of the sun can damaged furniture, make it impossible to see a TV or computer screen and cause room temperatures to spike in summer.

Wall-to-wall or wall-to-ceiling windows are increasingly trendy and featured constantly in real estate ads and home design magazines. But owners say the reality isn’t so glamorous.

Big windows are often streaked and spotty even when washed regularly. The sun fades furniture, wood floors, artwork and even kitchen cabinets.

Temperatures near the glass can be chilly in the winter and roasting in the summer.

And unless the shades are pulled, neighbors get a good view.

"I'm not sure people really anticipate what they're getting themselves into when they're buying these," says Terry Talentino, chief operating officer of Automated Shading Inc.

Source: The New York Times, Sara Lin (08/29/2008)

Consider Stocking Up on Land

More small buyers are investing in undeveloped land.

"There is a really attractive market emerging for the small investor," says Eric O'Keefe, editor-in-chief of Land Report magazine. "With credit tightening, what you're seeing in essence is some of the air being let out of the bubble that was driving prices up."

Buying land is no slam-dunk. An investor must be able to judge which land is most apt to deliver a profit down the road and be able to hold onto the property long enough to benefit.

Also, variations in prices make these kinds of investments painful for the faint of heart. For instance, the Texas real estate commission reported that land prices went up by 20 percent in 2007. But land values in Southern California have tumbled at least 50 percent along the coast and as high as 90 percent. inland, investors say.

Plus, ownership can be expensive. Besides high borrowing costs, there are property taxes and liability insurance costs to pay.

Nevertheless, some investors are convinced now is the time. "It's a delicate business, but it's just about bad enough to be good again," says William Shopoff, chief executive of Shopoff Group, a real estate investment firm in Irvine, Calif.

Source: Investor’s Business Daily, Brad Kelly (08/29/2008)

New Home Sales Rose in July

Commerce Dept.: New Home Sales Rose in July

New home sales in July rose 2.4 percent over the prior month to an annual pace of 515,000, the U.S. Commerce Department reported Tuesday.

At the same time, the number of unsold homes on the market fell 5.2 percent, marking the largest single-month decline since November 1963. Year over year, however, new-home sales were down 35.3 percent and the median new-home price slipped 6.3 percent to $230,700.

Nonetheless, some economists find the latest numbers reassuring.

“We're hopefully getting in the vicinity of a bottom,'' says David Resler, chief U.S. economist at Nomura Securities International Inc. in New York.

“The biggest declines, they’re all behind us now,” says Nigel Gault, chief domestic economist at Global Insight, a research firm.

Sales of new homes slipped in Midwestern and Southern states, according to the Commerce Department report, but rose in the Northeast and West. The median price of a new home in July was $230,700, down 6.3 percent from a year ago. Sales of new homes remained 35.3 percent below their level in July 2007.

Source: Bloomberg, Shobhana Chandra (08/26/2008)

Home Buyers Acting on Lower Prices

Home Buyers Acting On Lower Prices

Existing-home sales rose from the first quarter in 13 states, largely from buyers responding to discounted home prices, according to the latest quarterly survey by the NATIONAL ASSOCIATION OF REALTORS®. Nearly one-quarter of metropolitan areas showed rising home prices in the second quarter from a year ago, with greatly mixed conditions continuing around the country.In the second quarter, 35 out of 150 metropolitan statistical areas 1 showed gains in median existing single-family home prices from the second quarter of last year, while 115 had price declines. NAR’s track of metro area home prices dates back to 1979.NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said foreclosures are distorting the price data. “In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values,” Gaylord said. “Many buyers with long-term expectations are getting exceptional value in the current market. Once the inventory is drawn down, price pressure will return because the costs of construction are rising – today’s buyers are very well positioned to build wealth over time.”A separate recent study by the National Bureau of Economic Research, “Housing Supply and Housing Bubbles,” shows construction costs in 2007 were higher than home prices in 33 out of 79 metro areas studied.Because foreclosures and short sales are accounting for about one-third of transactions, there is a downward pull to the national median price. In the second quarter, the median existing single-family home price was $206,500, down 7.6 percent from the second quarter of 2007 when it was $223,500. The median price is where half of the homes sold for more and half sold for less.Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate2 of 4.91 million units in the second quarter, down 0.8 percent from 4.95 million units in the first quarter, and were 16.3 percent below a 5.87 million-unit pace in the second quarter of 2007.According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 6.09 percent in the second quarter from 5.88 percent in the first quarter; the rate was 6.37 percent in the second quarter of 2007. Lawrence Yun, NAR chief economist, said a clear cause-and-effect response has developed in the housing market. “The biggest home-sales gains over the previous quarter have been in some of the markets with the steepest and fastest price drops,” Yun said. Compared with the first quarter, existing-home sales increased 25.8 percent in California, 25.0 percent in Nevada, 20.5 percent in Arizona and 10.1 percent in Florida. “Buyers in these areas are responding to deeply discounted home prices.” The largest sales gain during the second quarter was in Idaho, up 51.7 percent; Virginia sales rose 10.5 percent.The steepest declines in single-family home prices in the second quarter were in the Sacramento-Arden-Arcade-Roseville area of California, where the median price of $229,500 dropped 35.6 percent from a year ago, followed by Cape Coral-Fort Myers, Fla., at $178,100, down 33.1 percent from the second quarter of 2007, and Riverside-San Bernardino-Ontario, Calif., where it dropped 32.7 percent to $265,200. “Each of these areas has seen a strong buyer response in recent months to the big cuts in home prices,” Yun said.Sharp price declines, in excess of 20 percent, also were reported in the Los Angeles-Long Beach-Santa Ana area; the Anaheim-Santa Ana-Irvine, Calif., area; Las Vegas-Paradise; and Phoenix-Mesa-Scottsdale.“Areas with affordable housing and healthy local economies continue to see price growth,” Yun said. In the second quarter, the largest single-family home price increase was in the Yakima, Wash., area, where the median price of $162,300 rose 8.9 percent from a year ago. Next was the Binghamton, N.Y., area, at $120,900, up 8.7 percent from the second quarter of 2007, followed by the Amarillo, Texas, area, where the second-quarter median price increased 7.2 percent to $124,600. Yun said home price conditions reflect comparisons from 12 months ago. “Prices having fallen sharply and quickly in very distressed markets, but most or all of the price declines may have already occurred in these areas since buyers have now returned to those markets,” he said. “Furthermore, the momentum of buying is likely to continue in light of the housing stimulus package that was recently enacted. About 2.5 million first-time buyers are expected to take advantage of the $7,500 tax credit between now and the middle of next year.”Median second-quarter metro area single-family home prices ranged from a very affordable $71,700 in the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, to nearly 11 times that amount in the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $755,000. The second most expensive area was San Francisco-Oakland-Fremont, at $684,900, followed by Honolulu at $636,000. Other affordable markets include Elmira, N.Y., at $76,400, and the Saginaw-Saginaw Township North area of Michigan with a second-quarter median price of $80,300. In the condo sector, metro area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $220,000 in the second quarter, down 3.0 percent from $226,900 in the second quarter of 2007. Seventeen metros showed annual increases in the median condo price and 37 areas had price declines.The strongest condo price increases were in the Syracuse, N.Y., area, where the second quarter price of $144,900 rose 17.8 percent from a year earlier, followed by the New Orleans-Metairie-Kenner area of Louisiana, at $192,100, up 15.9 percent, and the Houston-Baytown-Sugar Land area of Texas, where the median condo price of $141,100 rose 9.9 percent from the second quarter of 2007. Areas where condo prices declined mirrored the pattern seen with single-family homes.Metro area median existing-condo prices in the second quarter ranged from $107,500 in the Wichita, Kan., area to $523,500 in the San Francisco-Oakland-Fremont area. The second most expensive condo market reported was Honolulu at $330,000, followed by Los Angeles-Long Beach-Santa Ana at $327,800. Other affordable condo markets include Greensboro-High Point, N.C., at $109,600 in the second quarter, and the Indianapolis area at $113,500. Regionally, the median existing single-family home price in the Northeast fell 9.6 percent to $269,000 in the second quarter from the same period in 2007. After Binghamton, the strongest price increase in the Northeast was in Elmira, N.Y., up 6.6 percent from the second quarter of 2007, followed by Buffalo-Niagara Falls, N.Y., with a median price of $108,200, up 4.7 percent. The median existing single-family home price in the Midwest declined 0.9 percent to $161,500 in the second quarter from the same period in 2007. The strongest metro price increases in the Midwest were in the Decatur, Ill., area, where the median price of $94,200 was 6.0 percent higher than a year ago, and Des Moines, Iowa, at $156,600, also up 6.0 percent, followed by Peoria, Ill., at $124,800, up 3.7 percent from the second quarter of 2007. In the South, the median existing single-family home price was $177,000 in the second quarter, down 4.1 percent from a year earlier. After Amarillo, the strongest price increase in the South was in the Charleston, W.V., area, at $136,600, up 7.1 percent from a year ago, followed by Corpus Christi, Texas, with a 6.2 percent gain to $144,400, and Greenville, S.C., at $160,300, up 5.1 percent.In the West, the median existing single-family home price was $290,600 in the second quarter, which is 17.4 percent below a year ago. After Yakima, the strongest metro price increase in the West was in the Salt Lake City area, at $234,200, up 0.5 percent from a year ago; all other metro areas reported for the West were down from the second quarter of 2007.Source: NAR

Gas Prices Force Buyers to Rethink 'Burbs

Gas Prices Force Buyers to Rethink 'Burbs

High gas prices are affecting American workers' attitudes toward commuting and are prodding many to trade in their large homes in the exurbs for smaller, more urban properties.

Buying a 6,000-square-foot home with a large yard and a sport-utility vehicle to boot made sense when gas and property prices were low, economists say, but gasoline is now cost-prohibitive for many.

If the federal government lifts the heavy gas subsidies that encourage suburban growth, many Europeans pay $8 a gallon for gas, suburban residents will abandon their properties en masse and move in closer to urban transit stations.

"What were pluses of that lifestyle are now liabilities: a big SUV, a big home to heat, the energy needed to mow the lawn," says CEO Tom Darden of the Raleigh-based real estate conversion group Cherokee Investment Partners.

The firm takes properties close to transit centers in urban areas and develops them into housing.

Properties in the Washington, D.C.-metro area, Montreal, and Denver are thriving, says Darden, while property values in far-removed exurbs like Loudoun County, Va., and California's Central Valley are plummeting.

Source: The Washington Post, Eric M. Weiss (08/05/08)

More Unmarried Couples Buying Homes

More Unmarried Couples Buying Homes

Unmarried couples made up 7 percent of home buyers last year, according to the NATIONAL ASSOCIATION OF REALTORS®, making up the second-fastest growing buyer segment.

Such arrangements make sense in that there are two people contributing to the down payment and monthly expenses, and both parties can take advantage of the tax benefits of homeownership.

However, there are numerous factors that an unmarried couple must consider before finalizing the purchase, such as a plan in case one owner dies or wants to sell.

Experts recommend that each buyer have a will stating that their share of the property goes to the surviving owner upon his or her death, but they also should consider including joint tenancy with the right of survivorship in the deed.

They also must understand that obtaining a mortgage requires full financial disclosure, meaning that their past credit histories will be out in the open. Moreover, buyers must understand that in the event of a breakup, the mortgage must be refinanced for it to be removed from one's credit report.

Source: Atlanta Journal-Constitution, C.W. Cameron (08/03/08)

Market Perceptions, Realities Not in Sync

Market Perceptions, Realities Not in Sync

Home owners are quite aware of the slow housing market, but most of them don’t think the trend is affecting their property, according to recent survey of 1,361 home owners.

Harris Interactive conducted the Homeowner Confidence Survey on behalf of real estate Web site Zillow. Results show that nearly two out of three (62 percent) home owners think their home value has increased or remained the same in the past year.

However, 77 percent of U.S. homes lost value in the past 12 months, according to preliminary analysis of Zillow's Q2 Real Estate Market Reports, due to be released August 12. Only 19 percent of homes increased in value, and 5 percent remained the same.

Another interesting finding from the survey: Home owner’s optimism about real estate prices doesn't extend to neighboring homes, as 42 percent expect values in their local market to drop and 58 percent think values will increase or remain the same.

The survey underscores a wide gap between home owners' inflated perception of their home values and the market reality. To monitor this perception-reality gap over time, Zillow has created the Home Value Misperception Index, which is the difference between the adjusted percentage of home owners who believe their home value increased over the past year and the adjusted percentage of homes that have increased in value.

Nationwide, the second quarter Home Value Misperception Index is 32, reflecting this broad gap. Those in the West, which has the highest proportion of homes (88%) that declined in value during the quarter, seem to have the best grasp on reality with a Misperception Index of 23, while those in the South have the widest gap at 36.

“We attribute this gap to a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others, but not them," said Dr. Stan Humphries, Zillow vice president of data and analytics.

Source: Zillow

Population Still Favors Sunny Localities

The U.S. Census Bureau has released 2007 population updates identifying fastest growing areas.

Here are the 10 cities with the largest numerical increase from July 2006 to July 2007:

Houston: 38,932
Phoenix: 34,941
San Antonio: 32,680
Fort Worth: 29,453
New Orleans: 28,926
New York: 23,960
Atlanta: 20,623
Austin, Texas: 17,648
Charlotte, N.C.: 17,471
Raleigh, N.C.: 15,148

Here are the 10 largest U.S. cities as of July 2007:

New York: 8,274,527
Los Angeles: 3,843,340
Chicago: 2,836,658
Houston: 2,208,180
Phoenix: 1,552,259
Philadelphia: 1,449,634
San Antonio: 1,328,984
San Diego: 1,266,731
Dallas: 1,240,499
San Jose: 939,899

Source: U.S. Census Bureau (07/10/2008)

Housing Inventories Fall in Major Cities

The supply of homes dipped 2.4 percent in a year-over-year change in 12 of 18 cities where ZipRealty Inc. does business, the brokerage says.

The data covers listings of single-family homes, condos, and town houses for sale on local multiple-listing services. This is the first decline since the firm began keeping tabs in mid-2006.

The data doesn’t include New York City, but Miller Samuel Inc., an appraisal firm, says the city’s inventory was up 31 percent compared to June of 2007 because Wall Street firms have cut jobs.

The following is a list of cities and their percentage of inventory decline:

• Boston: -10%
• Dallas: -10.6%
• Houston: -2.4%
• Las Vegas: -18.5%
• Los Angeles: -7.4%
• Minneapolis: -4.8%
• Orange County, Calif.: -15%
• Orlando: -3.1%
• Phoenix: -2.6%
• Sacramento: -22.4%
• San Diego: -6.7%
• Tampa, Fla.: -7%

Source: The Wall Street Journal, James R. Hagerty (07/10/08)

Decoding Your Credit Report

Decoding Your Credit Report
Gain a better understanding of the factors that determine your eligibility for a loan.

The importance of financial responsibility is oftentimes overlooked in a materialistic nation comprised of excessive credit card offers, stretched lines of credit and the weakening dollar. In order to boost financial responsibility and provide more accurate information to credit bureaus, the company that calculates FICO scores has introduced a revamped credit scoring system. Many consumers will benefit, but others may face higher interest rates which may affect their monthly mortgage payments. Become one step closer to financial confidence by gaining a true understanding of the factors that influence your credit score.

Determining Your Credit Score
The restructured FICO credit scoring system, created by the Fair Isaac Corporation, is reported to go a bit easier on consumers who make an occasional mistake, yet really crack down on those who have multiple late payments and delinquencies. The weight put on certain factors, like late payments, have changed, while the benefit of authorized-user status has been dropped from the scoring system altogether. These changes may strengthen or slump your score by 20 or more points. Get to know the other factors that impact your credit score by reviewing the details below.

Length of Credit History
The longer your credit history, the better. Lenders like to see that you can manage your credit accounts responsibly over time. Now that credit scoring model ignores authorized-user accounts, it is important for those “piggybacking” to establish their own credit on a new and separate account. The omission of authorized-user accounts from future FICO credit reports will enable credit bureaus to protect lenders from those trying to misrepresent their credit risk.

Payment History
Payment history is one of the most influential factors in determining your credit score. As mentioned earlier, future FICO credit reports will forgive a few late payments, but if your account shows multiple late mortgage payments and delinquencies you may see your FICO score drop.

Contact Ruidoso Mortgage Co at 575-258-1316 to discuss affordable mortgage products that will enable you to maintain excellent credit and payment histories.

Amount Owed
Another significant factor that is reviewed by the credit bureau is the amount owed on your credit accounts. Having a mortgage and several credit cards will not classify you as a high risk borrower, but owing a lot of money on several accounts will. Make an effort to keep all credit balances low so credit bureaus and lenders do not assume you've overextended your financial capacity.

New Credit
Opening several credit accounts over a short period of time may present you as a risk to lenders. This is especially so for those who do not have a long, established credit history. Try to keep new credit accounts to a minimum.

Credit in Use
Be aware of the types of credit accounts you use. This includes credit cards, financial accounts, retail credit accounts, installment loans and mortgage loans. The FICO scoring program analyzes all active credit profiles when determining your financial responsibility.

Remember, higher credit scores are the most desirable to lenders; but if yours takes a dip, no need to fret, you may still qualify for certain loans and mortgage products. Review your finances and work with Ruidoso Mortgage Co so that you may better understand the role your credit score plays in your pursuit of an affordable mortgage product.

Courtesy: Nathan Thomas, Ruidoso Mortgage

U.S. Census: Homeownership Declines

As more Americans rent apartments and homes, the homeownership rate has declined to 67.8 percent this year.

That's a The percentage of households headed by homeowners has declined to 67.8 percent this year, down from 69.1 percent in 2005, according to U.S. census data gathered in March.
It is the sharpest decline in the homeownership rate in two decades, and is a significant shift away from the gains achieved by President Bush’s campaign begun in 2002 to create an “ownership society.”

Meanwhile, households headed by renters rose to 32.2 percent from 30.9 percent in 2005.

"We’re not going to see homeownership rates like that for a generation,” Mark Zandi, the chief economist at Moody’s Economy.com, a research company, told The New York Times.

Mr. Zandi says he thinksthat minority and lower-income homeowners had been hardest hit. Nearly three million minority families took out mortgages from 2002 to the first quarter of this year, housing officials say. Since minority families were more likely to receive subprime loans, economists believe these families account for a disproportionate share of foreclosures.

Source: The New York Times, Rachel L. Swarns (06/21/2008)

Tips for Easing Pet Problems in Real Estate

Dale Stevens, an associate with Prudential Connecticut Realty in Enfield, Conn., has been bitten by dogs and assaulted by parakeets, but her worst experience came as a result of a cat sleeping in a chair: Her client, terrified of cats, took one look at the snoring feline and walked away from the deal.

If your sellers have pets at the home, here are some suggestions from Stevens and other Connecticut practitioners for managing the potential problem.

• Clear up allergy conflicts. Make it clear in the listing that a pet lives in the home to avoid any problem with potential buyers who have allergies.
• Get rid of smells. Minimize odors by removing litter boxes and thoroughly vacuuming up dog and cat hair.
• Move the dog out. Ask the sellers to relocate their pets during the selling process. Moving the animal to the home of a friend or relative is the best solution.
• Next best: to the basement. If the pet can’t be moved, then suggest that they confine the animal to the basement or the garage.
• No pets at showings. Insist the sellers take the pet with them during open houses and showings.
• Offer to pay for cleaning. Tell sellers you'll give them a credit at closing to pay for having the house thoroughly cleaned by a professional to get rid of any lingering pet odors and hair.
• Hide the evidence. Remove evidence of the pet, like pet toys, feeding dishes and photos, which can distract potential buyers who don't like the idea of animals living in the house.

Source: The Hartford Courant, Robin Stansbury (0518/2008)

Simple Fix-Ups Pay Off Big for Sellers

Forget about overhauling the kitchen or redoing the bathroom. The fix-ups that pay off the most are often the simpler and more mundane, says Diane Saatchi, senior vice president at the Corcoran Group in New York.

Her specialty is selling high-end properties in the Hamptons. She recommends that sellers focus their improvements on small exterior changes rather than big-ticket projects inside the home. "Make the outside of the house look really great so that people fall in love between getting out of the car and the front door," Saatchi says.

That includes repainting the trim and adding new hardware, manicuring trees and shrubs, replacing old siding and replacing windows that aren’t energy efficient.

Nationally, returns for all major home-improvement projects are fetching 70 cents on the dollar, according to a Remodeling magazine’s survey of real-estate professionals conducted late last year. That's down from 80 cents in 2004.

Source: The Wall Street Journal, M.P. McQueen (05/15/2008)

Builders Downsize Homes to Offset Costs

Home builders are cutting back on square footage and offering fewer amenities to keep the costs down.

"We are dealing with realities of the market. Prices have come down somewhat, and some houses are smaller," says Don Knutson, senior regional president for the mid-Atlantic division of Beazer Homes. "I think square-footage reduction has been about 5 percent between 2007 and 2008."

A 2007 national survey conducted by the National Association of Home Builders found that 42 percent preferred a bigger house with fewer amenities, compared with 58 percent who said they would prefer a smaller house with "high-quality products and amenities."

That represented a change from 2000, when 51 percent wanted a bigger home with fewer amenities.

"I would say generally people are realizing bigger is not always better if they can get a smaller home that is affordable," says Knutson.

Source: The Washington Post, Allan Lengel (04/26/08)

Plenty Still Watching Real Estate TV

Despite a market that is tough in many areas, people continue to watch real estate television.

Real-estate programming specialist HGTV's viewership rose 11 percent year-to-year in the first three months of 2008. Nine of its top-10-rated shows among the target 25- to 54-year-olds are real estate based. Property Virgins (Sundays, 10 ET/PT), which premiered last fall with a focus on first-time buyers, has hit peak viewership (about 1.5 million) in the past few weeks.

This summer Bravo will revive Million Dollar Listing and Flipping Out, which did well in their first seasons. "Looking at big, beautiful houses is real-estate porn," says Andy Cohen, Bravo's production chief. "We're wary of the real estate market. But we have the most affluent audience on cable, and we program for them."

TLC has dropped Property Ladder, and Date My House replaces one of the Saturday time slots of Flip That House, whose viewership has dropped significantly from its peak of 1.8 million in fall 2006. TLC plans a late-spring rollout of Your Place or Mine, a novel game show that offers home makeovers.

"People are looking at homes in different ways," says TLC's says chief programmer Brant Pinvidic. "A couple of years ago, selling a house was considered the quickest way to get rich. Now it's, 'How much could I sell it for?' It's more a question mark rather than an exclamation point. We want to be reflective of our audience and continue to adjust. But this is a genre we'll always be in."

Source: USA Today, Gary Strauss (04/18/2008)

Plenty Still Watching Real Estate TV

Despite a market that is tough in many areas, people continue to watch real estate television.

Real-estate programming specialist HGTV's viewership rose 11 percent year-to-year in the first three months of 2008. Nine of its top-10-rated shows among the target 25- to 54-year-olds are real estate based. Property Virgins (Sundays, 10 ET/PT), which premiered last fall with a focus on first-time buyers, has hit peak viewership (about 1.5 million) in the past few weeks.

This summer Bravo will revive Million Dollar Listing and Flipping Out, which did well in their first seasons. "Looking at big, beautiful houses is real-estate porn," says Andy Cohen, Bravo's production chief. "We're wary of the real estate market. But we have the most affluent audience on cable, and we program for them."

TLC has dropped Property Ladder, and Date My House replaces one of the Saturday time slots of Flip That House, whose viewership has dropped significantly from its peak of 1.8 million in fall 2006. TLC plans a late-spring rollout of Your Place or Mine, a novel game show that offers home makeovers.

"People are looking at homes in different ways," says TLC's says chief programmer Brant Pinvidic. "A couple of years ago, selling a house was considered the quickest way to get rich. Now it's, 'How much could I sell it for?' It's more a question mark rather than an exclamation point. We want to be reflective of our audience and continue to adjust. But this is a genre we'll always be in."

Source: USA Today, Gary Strauss (04/18/2008)

Mortgage Applications Rise

Mortgage applications rose last week for the second week in a row, up 2.5 percent to 743.4 on a seasonally adjusted basis from 725.6 a week earlier, according to the Mortgage Bankers Association’s weekly mortgage applications survey.

On an unadjusted basis, the index increased 2.7 percent compared with the previous week and was up 16.4 percent compared to the same week a year ago.

Most of the increase came from refinances, which increased 5.2 percent from the previous week. Purchases actually decreased 0.8 percent.

The refinance share of mortgage activity was 53.5 percent of total applications, up from 52.2 percent the previous week.

Interest rates decreased slightly.

• 30-year fixed-rate mortgages decreased to 5.74 percent from 5.78 percent.
• 15-year fixed-rate mortgages decreased to 5.27 percent from 5.39 percent.
• 1-year ARMs decreased to 7.02 percent from 7.06 percent.

Source: Mortgage Bankers Association (04/16/2008)

Renters Face Their Own Woes

For some, it might not seem like a great time to buy a house, but it’s a dreadful time to rent, especially in the western part of the United States.

The average apartment rent through March rose from the previous year in all 19 major Western markets surveyed by the research firm RealFacts,

San Jose, Calif. -- the heart of Silicon Valley -- is now the West's most expensive rental market, with the average apartment leasing for $1,660 per month, up 9.1 percent, $139 per month, from the same time last year. That means a Silicon Valley renter can expect to pay nearly $20,000 to lease an average apartment during the next year.

Tucson, Ariz. offers the West's least expensive apartments, with rents creeping up 2 percent to $668 per month.

Source: The Associated Press, Michael Liedtke (04/16/2008)

Credit Repair Eases Home Buying

Anyone who is contemplating buying real estate should first consider a financial housecleaning.

Getting a mortgage has gotten more difficult, even for people with excellent credit. So it pays for potential buyers to examine their credit history.

Here are some smart steps to suggest potential buyers take:

Get a credit report. Credit reports are available free at Annualcreditreport.com. Examine it for incorrect information, such as closed credit accounts or debts belonging to someone else with a similar name. Address any problems such as delinquent bills.

Credit score improvement. It takes a credit score above 680 to get a mortgage. Scores higher than 720 rate better deals. Expect to pay a surcharge on credit scores lower than 680.

Consider FHA loans. FHA borrowers pay a small insurance premium, but only a 3 percent down payment. Borrowers must have a steady job, be able to verify income, have a record of paying bills on time and keep the loan amount to no more than 31 percent of gross income.

Avoid jumbo loans. Conventional loans are significantly cheaper than loans above $417,000.

Source: The Boston Globe, Andrew Caffrey, Binyamin Appelbaum (02/03/2008)

30-Year Mortgage Rates Fall to 4-Year Low

Housing industry observers are hopeful that the recent decline in mortgage rates will lead to a recovery in the market.

Freddie Mac reports that interest on 30-year, fixed loans fell for the fourth straight week, landing at their lowest level in nearly four years.

Economists say mortgage rates averaged 5.48 percent for the week ended Jan. 24 -- down from 5.69 percent a week ago -- because of the latest reports about the economy and because the Federal Reserve made its biggest cut in 20 years to a key interest rate.

Freddie Mac also reports that rates on 15-year mortgages declined to 4.95 percent from 5.21 percent, rates on five-year adjustable-rate mortgages dropped to 5.13 percent from 5.4 percent, and rates on one-year ARMs slipped to 4.99 percent from 5.26 percent.

Source: Baltimore Sun (01/25/08)

Stable Home Sales Expected Before Gradual Rise

Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, NAR says. "On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline," says Lawrence Yun, NAR chief economist. "On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity to buy now than in 2005, but many are trying to market-time their purchase.

How to Get a Quick Sale in a Slower Market

Although this reflects a different market than ours, the principles hold true anywhere.

An analysis of the real estate market in the Baltimore area shows that even in a slow market some houses sell quickly — for the same reasons they do in a booming market.

In November, when the average time on the market was 105 days, 13 percent of the 1,892 homes that sold in Baltimore and five surrounding counties had contracts in two weeks or less, according to data from Metropolitan Regional Information Systems Inc.

Those 251 homes went from listing to selling in an average of seven days. They were typically older, three-bedroom, two-bath houses that sold at an average of $304,355 — about $4,000 under the overall average sale price.

An analysis shows that fast sellers in a slow market have three common denominators:

• They're priced better than comparable listings.
• They show like model homes.
• They have a full force of marketing, including enticing Internet photos, behind them.

Source: The Baltimore Sun, Lorraine Mirabella (01/10/08)

Survey Shows Remodeling on the Rise in 2008

The popular home-repair referral service, Angie’s List, says its annual poll indicates that home owners will spend an average of $11,250 on home improvement and maintenance projects in 2008, up 13 percent over the average they reported spending in 2007.

On average, home owners responding to the survey say they plan to spend 2.9 percent of their home’s value on repairs and renovations this year.

“Building experts tell us they’re getting calls for work from home owners who would otherwise move and put their current home on the market, but are afraid they can’t sell it quickly enough to afford the newer, bigger house,” says Angie’s List founder Angie Hicks.

The most frequently planned projects are kitchen and bath updates—areas that real estate experts say provide the best return when selling a home. Other popular projects include landscaping and yard work, painting inside and out, flooring, doors and windows, and decks and porches.

Source: Angie’s List (01/01/2008)

Real Estate Terms

Stumped by the jargon and language of Real Estate? Go to our Favorites and click on the Real Estate Glossary button

First Step in Buying Property

So…you’re finally ready to buy some property, but what’s your first step?

You don’t want to waste time looking at fantastic homes or lots that you’ll never be able to afford. It’s to your advantage to meet with a mortgage broker and let them give you and idea of what your buying range is. The broker will want to do a credit check and talk with you about different kinds of loans you could consider and what your expected interest rate and approximate monthly payment will be.

You’ll not only walk away knowing how much you can afford to spend, but you’ll know a lot more about the loan process you’ll be going through. What’s more, you will have a pre-qualification letter that, when attached to an offer you make, will strengthen your offer because the seller will know you are a qualified buyer.

We know this process may be a little intimidating, but it's well worth the effort!

5 Simple Ways To Increase Your Home's Value

Good home maintenance is key to creating and preserving a home’s value. Not to mention, it also impresses potential buyers.

Here are five basic steps that every home owner ought to take — before spending money on dream bathrooms or gourmet kitchens.

1. Safety. Make sure smoke detectors and carbon monoxide detectors are installed and in good working order. Check fuel-burning appliances to make sure they are properly vented and no gas connections leak. Make sure the electrical system is adequate. Flickering lights and popping breakers are the sign of a problem. Anchor handrails and grab bars adequately.

2. Preventive maintenance. Repair any leaks in the roof, seal gaps in the siding, paint bare wood, replace damaged decking, patch cracks in concrete, and caulk around tubs and showers.

3. Conserve energy. Install a programmable thermostat, weatherstrip doors and windows, fix leaking faucets, upgrade insulation, and replace leaky windows.

4. Go green. Consider environmentally friendly materials for windows, doors, siding, decking, fencing, roofing, flooring, and insulation.

5. Improve comfort. Get rid of clutter, open up spaces, update window treatments to allow in more light, and organize closets and storage.

Source: The Associated Press, James and Morris Carey (12/29/07)

Know What Your House Is Worth

It’s important to know the estimated value of your home. You can do this basically in two ways:

Market Comparables – If you are thinking of selling your home, any real estate agent will be more than happy to give you an idea of a good listing price. The agent will furnish you with information about actively listed properties in your neighborhood, as well as what homes have sold for recently. This information is very helpful to you in knowing how much money you can potentially get for your home. There is no charge for this service.

Appraisals – You can also order a formal appraisal on your home. Appraisers look at property value from a broader base. Such an appraisal is done on your property when a buyer is getting a loan to buy it. So having the appraisal prior to listing will give you the extra confidence that your home is indeed worth every penny of the listing price. Average cost of an appraisal is $400-$500.

Welcome

Welcome to our BLOG about real estate in this beautiful Ruidoso area! Many of you out-of-towners dream about buying a vacation home in Ruidoso. Many of you full-timers or current owners are hoping to move up to a larger home!

So... whether you are buying or selling, take a look at our archives and find answers to many of your questions about real estate transactions. We'll be posting several articles each month, and we're excited to hear from you! If you need immediate information, feel free to post your question here, send us an email or simply call us.