Real Estate Information Archive

Good News in the Real Estate Market!

New-home sales for single families rose 1.3% in October marking it as the best pace for new-home sales since May! New construction is revealing recent signs of picking up new-home activity compared to last year’s statistics.

"Builders have been seeing some marginal improvement in sales activity over the past few months, particularly in select markets where consumer confidence is higher due to improved economic conditions," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "While this trend is encouraging, overall sales activity is still well below normal due to the effects of overly tight credit conditions for builders and buyers, the continued flow of distressed properties on the market, and inaccurate appraisal values on new homes."

Still, nationwide inventories for new-homes are still at an all-time record low. This can be interpreted in a positive light. Builders are able to keep their inventories at a rate matching the current sale rate, keeping the number sustainable.

Source: http://realtormag.realtor.org/daily-news/2011/11/29/new-home-sales-post-biggest-gains-in-months

Tim Hart

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---Housing Affordability! Consistent Record Levels----

 News has been dominated by the low interest rates and efforts to stabilize home prices in order to push housing affordability in the third quarter to its highest levels in the past 20 years. So far, the third quarter has boasted some impressive statistics. 72.9% of all homes sold were affordable to families earning a median income of $64,200. This is the 11th quarter that affordability measure was above 70%.

"With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households than it has been for nearly two decades," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, tough economic conditions — particularly in markets that experienced major changes in house prices and production — as well as extremely tight credit conditions confronting home buyers and builders continue to remain significant obstacles to many potential home sales."

Source: National Association of Home Builders/Wells Fargo Housing Opportunity Index

Ben Bernake, the Federal Reserve chairman, is considering buying more mortgage-backed securities to help the other fixes hoping to serve as a trickle down backbone for strengthening the rest of the economy. He comments: “The housing sector is a very important sector. Problems in that sector are a big reason why our economy’s not recovering more quickly.”

Economists believe that more people must buy homes to boost consumer purchases in other sectors (furniture, appliances, home repairs equipment) The housing market has led the economy out of recession in the past by creating jobs and increase both endurable and durable spending.

Although the housing market continues to be bogged down by a high rate of foreclosures, home sales rose 1.5% last month.

Source: realtor.com

Although a tedious process, many buyers are drawn to foreclosure sales because it is known to be the bargain price in the housing market. Statistics back that up. Distressed sales range from 20-40% less than a non-distressed home. With the appeal in the market, buyers must also take heed of what they are facing when they set out on a distressed sale search.

Here are three tips to help you navigate!

Focus on REO’s. Avoiding short sales will keep the process from getting too lengthy with the infamous negotiations associated with short sales. REO sales are more similar to traditional home sales. "A bank isn't emotionally attached to a REO; it's just looking to recoup as much of its losses as possible," Blomquist told Business Insider. "So the lender is often more willing to capitulate on price."

Do Not Forget The Inspection. Many distressed sales are sold ‘as is’ and with the purchase of it, the buyer will inherit the multitude of problems if the buyer is not careful. Getting an inspection will allow buyers to have a list of issues along with estimated costs of repair so that they can then make the best decision and possibly negotiate a lower price on the home.

Do Not Expect Instant Appreciation. Just because a buyer gets a home with a big discount, this does not imply appreciation will rise right away. Being educated about the market will help to set reasonable projections on the shifting value of your home.

If you have questions and need help in the current market, connect with me. I have investment and market experience for Bozeman, Big Sky, and surrounding areas.

http://realtormag.realtor.org/daily-news/2011/11/02/buying-foreclosure-3-things-consider

Tim Hart

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Renting a Home Vs Owning a Home

Rising rental costs are pressing renters to match and even outspend owners in housing costs! Since 2005, owner’s housing expenses have increased from 31.9% to 33.2% of their household budget. To compare, in that same time span, renter’s housing expenses have gone from 35.6% to 38.4%. (CoreLogic US Housing and Mortgage Trends).

Looking further back, over the last 26 years home owners have increased the amount spent on household expenses by 12% and renters by 22%. Still, home ownership rates continue to drop in most parts of the country. CoreLogic found homeownership in 25-to-34 year olds has dropped the most from 51.6% to 42%. In the 35-to-44 age group, homeownership declined from 71.2% to 62.3%.

These trends are startling considering Capital Economics found that for the first time in 30 years, the median monthly mortgage is equivalent or less than the median rental payment! Please, look into the options for buying a home and when you reach the point you are ready to take a step forward, visit me!

More and more baby boomers say they do not have plans for post-retirement mostly due to their lack of trust in the market and know that their own home values have dropped. 53% of baby boomers polled are delaying their retirement until they can gain back some of their lost investments.

ONLY 9% of Baby Boomers feel like they’ll live comfortably in their retirement!

Understand the factors a buyer values is essential in matching them with their ideal home. Even more so, educating the public can dampen the insecurity many people, baby boomer and otherwise, have about their own future.