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A colleague forwarded this short article to me this evening and I wanted to share it. Although the news is concentrating on the declining stock market and auto industry, the real estate markets have been showing some encouraging numbers lately.
- New mortgage applications increased 12% last week
- Applications for FHA loans were up 15.3% last week
- The fixed rate on a 30 year mortgage dropped from 6.5% to 6.24% last week
- Pending home sales have been stronger that last year for two straight months
If you get a chance give the article a quick read:
http://realtytimes.com/rtpages/20081118_realestateoutlook.htm
3:15 PM - Nov. 20, 2008 - {0} -
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Amidst last week's financial turmoil there was a bit of hope. The Mortgage Bankers Association reported today that mortgage applications were up 5.4% last week. The yield on the10-year Treasury note - the benchmark for the 30-year fixed mortgage rate - moved up about 40 points over the course of the week. As the week went by, rates slowly ticked up ending higher than they began with the 30-year fixed rate mortgage increasing to 6.47%.
12:47 PM - Oct. 15, 2008 - {0} -
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Lawmakers are expected to continue negotiations after the U.S. House of Representatives' surprise defeat yesterday of a $700 billion rescue plan, which sent shockwaves through Wall Street.
"What happened today was not a failure of a bill, it was a failure of will," said Banking Committee Chairman Chris Dodd, D-Conn. "Our hope is that cooler heads will prevail, people will think about what they did today and recognize that this is not just scare tactics, it's reality."
Here’s what could happen next:
- The bailout plan could get revived when Senate leaders reconvene on Wednesday. Senate leaders who backed the plan could debate it, which would then give a nudge to the House when it returns to Washington on Thursday.
- The proposed rescue plan by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke could be abandoned altogether and a bill that has more Republican support could be proposed instead—although this is viewed as unlikely.
- The existing plan may be tweaked and include more lawmakers from one of the parties to garner greater bipartisan support. For example, proponents will aim to sway moderate Republicans who would be likely to flip after winning some concessions on the legislation. Also, Republicans in California and the Southwest could feel pressure to back the government's rescue plan since their residents are particularly facing a slumping housing market.
Source: Reuters, Patrick Rucker (09/29/08)
11:16 AM - Sep. 30, 2008 - {0} -
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Interest rates are lower and existing-home prices have fallen dramatically in many areas. Now what the market needs are willing buyers who can find financing.
About 75 percent of U.S. banks tightened standards on mortgage lending to the most credit-worthy borrowers in the three months ended in July, according to the Federal Reserve's quarterly Senior Loan Officer Survey.
"Tighter standards assure the loans are less likely to fail, but also have had the unfortunate effect of limiting the ability of some first-time home buyers to enter the market,'' says Sara Tinsley Demarest, spokeswoman for the Washington-based Mortgage Bankers Association.
"Nobody really wants to take risk anymore. Deals are getting really hard to do now,” says Suzanne Bach, senior vice president of New York-based Guardhill Financial Corp., and an 18-year home lending veteran.
Source: Bloomberg, Sharon L. Lynch (09/16.2008)
5:22 AM - Sep. 17, 2008 - {0} -
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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.
11:01 AM - Sep. 10, 2008 - {0} -
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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 the 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)
12:52 PM - Sep. 2, 2008 - {0} -
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My new listing at 3519 Tussell Street in Naperville's Rose Hill arm subdivision has been completely updated with new kitchen, baths, flooring, and more. This home is being offered at $449,900.
8:38 AM - Aug. 27, 2008 - {0} -
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Both the National Association of Realtors and the Illinois Association of Realtors released data on Thursday comparing June of ’07 to June of ’08 real estate sales and what we saw was not pretty.
Illinois reported sales volume (number of homes sold) for the Chicago metro area were down nearly 28% with the median sales price slipping 3.3%.
I broke out the numbers for Naperville and found us none the better. In fact we’re a bit worse off. Using sales data from the MLS I found that our sales volume was down 35% and our median sales price slipped nearly 10%!
Now before everyone begins to panic, let’s look at the numbers a little differently. We’ll start with our median sales price. June of ’07 was the highest in the past two years. If you look back, June of ’08 was actually a 1.5% increase compared to the same month two years ago (when the market supposedly peaked). The most likely reason would be the slow down in the high end of the market. Homes under $500,000 have had the strongest demand and have not seen as much of a decline.
Next let’s look at our sales volume decrease. The number of homes selling has certainly slipped. It’s difficult to spin that into a positive. But if you look at the monthly sales for the first half of ’07 and this year, you’ll see the two years are following the same trend with this year posting lesser numbers.
This data just tells us what we already know, the market is slow. If you don’t have to sell don’t. And if you do, make sure your home is priced to sell. This is not the time to test the market. On the flip side, now is defiantly the time to buy.
6:51 AM - Jul. 25, 2008 - {0} -
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With the declining housing market, home builders across the country are faced with a problem. The homes they have been building are no longer selling. Buyers’ tastes in homes have changed and home builders have to adjust their plans to meet the new needs of the consumer.
First, builders have to reduce their current inventory of homes they have already built. This usually means price cuts. New developments are often seeing a base price decline between phases. Many people who purchased homes in the first phase of a development are now seeing their exact same model selling for thousands less in later phases.
After the builders have reduced their inventory, they are focusing on building smaller homes. With tougher financing requirements, buyers are looking for smaller, lower priced homes.
According to Kelly Evans of the Wall Street Journal, “over the past three decades, prosperity and a demand for space to accommodate home theaters, offices, gyms, and palatial kitchens has pushed up the average size of newly constructed single-family homes by nearly 45 percent even as the size of the average family has declined.” The US Census Bureau reported that the median square footage of a single-family home in 2007 was 2,248, up from 1974’s median of 1,560. 9:25 AM - Jul. 2, 2008 - {0} -
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The Baby Boomer generation are increasingly becoming empty nesters, and despite the amount of wealth they hold, they are trending towards smaller homes. The reasons? They no longer need the space that a family requires and, with rising energy costs, the monthly expense of a large home is not worth all the extra space. A move towards smaller homes in existing neighborhoods has been seen by many who study housing trends.
Although an empty nest is often the catalyst for downsizing, the US Census Bureau has data showing the number of households without children is steadily climbing and estimates that they will account for nearly three quarters of all US homes by 2025.
Despite the trends the National Association of Home Builders expects the average size of newly constructed single-family homes to level off around it’s current figure, about 2,500 square feet. Although 2,500 square feet is certainly not a “McMansion,” it is larger than the median home size in 2007 of 2,248 square feet.
Kira McCarron, the chief marketing officer of Toll Brothers Inc, a US home builder, says “it’s not that people don’t want or can’t afford (big houses). It’s that they’re afraid of them now - it’s a confidence issue more than an affordability issue.”
No matter what the reason, you can’t deny the trends are veering away from the colossal McMansions that have been popping up across the country. Buyers are looking for smaller more affordable housing.
11:02 AM - May. 18, 2008 - {0} -
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In today’s real estate market, it is becoming increasingly difficult to sell homes. While many builders are no longer offering incentives such as flat screen televisions to entice buyers, individual home sellers are still trying to lure potential buyers with creative offers.
One such unorthodox idea is from a seller in western Wisconsin. According to the Minneapolis Star Tribune, Bob Fanning will name whoever purchases his home as the beneficiary of a $500,000 ten year term life insurance policy. Fanning’s home, listed at $498,900, could end up paying for itself if Fanning, 69 years old, doesn’t make it to see 2018.
Certainly this is a gamble for any home buyer and may not ultimately be the reason the home is purchased, but it is certainly an interesting idea that is causing the home to get some media coverage.
11:17 AM - Apr. 11, 2008 - {0} -
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According to the US Census Bureau, the Dallas metro area had the largest population gain from ’06 to ’07. Texas came in with four cities in the top ten with the southwest region of the US having a total of seven cities. While the growth in the southwest is attributed to individuals and families moving into region, Chicago actually had a larger number of people move out than in. Chicago’s population increase is from a low death rate and an even higher birth rate. The rankings are:
8:37 PM - Apr. 7, 2008 - {0} -
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I came across this article in the Chicago Tribune today and I though it was good information in this election year. I posted it below…
Where They Stand on Housing
Hillary Clinton: Calls for immediate government action to deal with the home-loan crisis. Supports plan by Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.) to allow homeowners to restructure at-risk mortgages, backed by Federal Housing Administration guarantees. Proposes $30 billion “second stimulus” package to help states and localities fight foreclosure moratorium on subprime owner-occupied homes. Favors increased regulation of mortgage originators.
Barack Obama: Supports immediate government intervention in housing crisis. Like Clinton, favors Frank-Dodd plan to provide federal loan guarantees to allow refinancing of troubled of troubled mortgages and keep people in their homes. Wants “second stimulus” of $30 billion that would include $10 billion to help people avoid foreclosure. Wants to require more transparency by financial institutions and reform the system so that federal regulatory agencies don’t overlap and compete with each other.
John McCain: Calls for more accountability and transparency in financial markets. Says it’s not the duty of the government to bail out banks or barrowers who acted irresponsibly, but does not rule out temporary aid for people to help them stay in their homes. Says the down payment requirement for FHA mortgages should be raised. Calls for overall reform of the system as part of any aid effort.
The Illinois Housing Development Authority is sponsoring a Homeowner Outreach day on Saturday at the DuPage Township Levy Center. The outreach day is part of a statewide initiative to help homeowners learn their options and possibly help them refinance their homes. The state’s homeowner assistance pool has funds to help homeowners with rising mortgage costs and offers refinancing loans guaranteed by the Federal Housing Administration with favorable rates.
The Homeowner Outreach Day will be held from 9am to 1pm this Saturday, April 5 th at the DuPage Township Levy Center located at 251 Canterbury, Bolingbrook. For more information call 800-532-8785 or visit www.illinois.gov.
Naperville has been recognized many times over as a wonderful place for people of all ages to live. Now it is being recognized on a national level for its small business development as well.
Earlier this week the National Association of Realtors released their numbers for existing home sales for February and to most people’s surprise, they were up. Unfortunately, that’s not the case for new home sales.
According to the Commerce Department, new home sales dropped 1.8% from January and were down nearly 30% from February 2007. This is the lowest level of sales for new homes in 13 years.
Now in the third year of declining sales, the building industry is slowing construction of new homes and trying to concentrate on what home buyers are really looking for in today’s market. Many builders, both small and large, have had to close their doors altogether. In the end, the builders who are able to meet the current market’s needs will come out on top.
I have lived in Naperville my entire life and I could not begin to count how many awards this city has received, even over the recent years. Money magazine has named Naperville in the top 10 cities in the country to raise a family at least 3 times, we have the number one public library system in the country, and two amazing school districts, 203 & 204. Naperville has great shopping & restaurants giving you few reasons to need to leave but if you want to get out it’s only a short ride into Chicago. There a hundreds of reasons to live in Naperville.
Well an article in today’s Sun gives us a few more. Real estate values have traditionally been strong in Naperville and even in a weak market the city’s strong points have helped to keep our values up, at least in comparison to our neighboring cities and towns. The nine county Chicago area had February sales down 26.9% from the same month in 2007, while Naperville was only down 18%.
Naperville is fortunate because many of the things that draw its residents to move, and stay here, are the same things that are helping the property values.
Tuesday the National Association of Realtors (NAR) released sales numbers for February and nearly everyone was surprised. Expectations were for another reported loss in sales, but nationwide sales rose 2.9% from January to February, the first rise in sales in seven months!
The downside to this good news was that, although volume increased, prices decreased. The NAR also reported national real estate prices declined 8.2%, the largest drop on record.
Although some people are saying that the market has bottomed, it seems the general feeling is one of cautious optimism. These numbers show that seller’s are finally accepting that the market has changed and their house may not be worth what it was a year or two ago. The low interest rates are still attractive to buyers and the tighter lending restrictions aren’t necessarily a bad thing for sellers. Yes the tighter restrictions will keep some buyers out of the market but the ones that are able to get a loan are able to because they have good credit and money to put down. Translated, that’s a strong buyer.
Locally, the nine county Chicago area had an increase in sales volume of about 10% and Illinois as a whole, about 15%. Let’s hope that March can continue the up tick.
The City of Naperville decided in last week's council meeting to contract with Virchow, Krause & Company to put city meeting minutes online. This will streamline the process for residents to find information from various city departments. It is estimated that the city will save around $3,000 a year in printing costs and they were able to eliminate a salaried position saving an additional $68,000 annually. The site is expected to be up and running by year's end. For more information read the article in today's Naperville Sun.
10:09 AM - Mar. 24, 2008 - {0} -
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With the cold, winter weather comes the danger and inconvenience of frozen pipes. According to State Farm Insurance, over a quarter of a million homes experience a frozen pipe each year, and that is only the homeowners who file a claim. There are several things that can be done to avoid unwanted water spilling across your floor.
- Insulate your pipes. This applies to pipes in any exterior walls. Any hardware or home improvement store sells foam wraps for water pipes. If you are in the process of building a home of redoing a room, take this opportunity to move water pipes from exterior walls.
- Turn water off to exterior faucets. If your home has a separate valve, turn the water off to any outside faucets and drain them. If your home does not have separate valves, consider having a plumber install them or install anti-freeze exterior faucets.
- Let your faucet drip. This has been a simple solution for years because it generally works. It will waste water which doesn't fit into today's trend of conservation but if the pipe freezes and bursts, much more water will be wasted and damage to your home could occur.
- Open doors. Many kitchen and bathroom cabinets that house water pipes and are located on an exterior wall or even above a cold garage, basement, or crawl space can trap cold air. By opening the cabinet doors it allows the warm air in the house to circulate around the water pipes.
Hopefully these tips will help you avoid damage to your home this winter from unwanted and preventable water.
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