TODAY'S NEWS IS BROUGHT TO YOU FROM MAUI

Paying off an underwater mortgage and buying a better home could be the best tactic in this troubled market.

"If you are trading up, what better time than when interest rates are at record lows and the cost of the trade-up is much less than it used to be?" says Christopher J. Mayer, a Columbia Business School economist.

With 15-year fixed-rate mortgages at about 4.5 percent, it also makes sense to pay off the mortgage and keep the house. "At this point," says Jay Brinkmann, chief economist of the Mortgage Bankers Association in Washington, D.C., "if they don't have anything else that is bringing a tremendous return, then they are buying themselves an annuity by paying their house off sooner than they needed to."

Source: The Wall Street Journal, M.P. McQueen (07/24/2010)

EXCELLANT ADVICE

Daily Real Estate News | July 19, 2010 |

Anyone shopping for a new mortgage these days should shop around, says Cameron Findlay, chief economist for LendingTree.

Although mortgage rates look astoundingly low, the spread between what the bank receives and what it pays investors has actually increased, giving banks more room to negotiate.

Applicants with good credit scores should aggressively seek the best rates they can find by comparison shopping, starting with the bank they usually do business with.

Source: The New York Times, Jennifer Saranow Schultz (07/17/2010)

WILL FORECLOSURES KEEP HOME PRICES DEPRESSED?

Daily Real Estate News | July 16, 2010 |

SAVE AND SELL

Daily Real Estate News | July 15, 2010 |

Homeowners who want to sell but don't have a lot of cash to spruce up their properties might consider these tips from Bankrate.com for upgrading a property without spending a fortune.

Polish up the kitchen. Add new cabinet door handles, replace lighting and update the faucet set. Unless the cabinets are mica, give them a fresh coat of paint. Order new doors for kitchen appliances.

Tidy up the bath. Replace the toilet seat. Clean up the floor with vinyl tiles or sheet vinyl applied over the old floor. Re-grout the tub and, if the tub is dingy, add a new prefabricated tub and shower surround.

Paint the walls.

Add closet systems to all the bedrooms, pantry, and entry closets.

Hire a plumber and an electrician to fix anything that is loose or that leaks.

Clean the carpets or, if they are worn, cover them with area rugs.

Replace ceiling lights with inexpensive but attractive fixtures.

Refinish or repaint the front door and replace the hardware.

Mow the lawn, edge the sidewalks, mulch all the beds and put two big planters at either side of the front door.

Source: Bankrate.com (07/14/2010)

ANOTHER WORRY FOR BUYERS

Daily Real Estate News | July 12, 2010 |

Lenders continue to reject borrowers with otherwise good credit when they diverge from the standard approval checklist.

Would-be borrowers facing the most problems include the self-employed.

One reason bankers are so nervous are the standards held out by Fannie Mae and Freddie Mac. Not only are Fannie and Freddie demanding credit scores above 720, they are refusing to buy back defaults when the original mortgage application had small discrepancies from the norm. To avoid losses, lenders are being extra careful.

The result is that some borrowers are being rejected for problems that seem completely inconsequential.

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

NOW IN THE TIME TO LOOK AT RENTAL PROPERTIES AS AN INVESTMENT

Daily Real Estate News | July 9, 2010 |

Apartment vacancies were down and rents were up last month as people got tired of living in their parents' basements and rented a place of their own.

Nationally, the apartment vacancy rate was 7.8 percent at the end of June, according to research firm Reis Inc., down from 8 percent in the first quarter.

Rents rose 0.7 percent from April to June, the largest quarterly gain in two years.

The advantage hasn't returned "completely back to owners right now," says Hessam Nadji, managing director at real estate firm Marcus & Millichap. "But we're well under way to see that balance shift back."

Source: The Wall Street Journal, Nick Timiraos (07/08/2010)

GOOD NEW FOR THE REAL ESTATE MARKET?

Daily Real Estate News | July 8, 2010 |

International home buyers are increasingly attracted to property in the U.S., according to the National Association of REALTORS®' 2010 Profile of International Home Buying Activity. Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, and the emerging economic recovery, continue to drive international interest in owning a home in this country.

"While all real estate in the U.S. is local, the same is not true for property owners," said NAR President Vicki Cox Golder, owner of Vicki L. Cox Real Estate in Tucson, Ariz. "The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country and can rely on REALTORS® to help guide them through the complex process of buying property in the U.S. With expertise, knowledge and experience, REALTORS® have a global perspective."

The survey, released today, covers the period between April 1, 2009, and March 31, 2010. During that time foreign buyers, including those with residency outside the U.S. as well as recent immigrants and temporary visa holders, are estimated to have purchased $66 billion of U.S. residential property, or 7 percent of the residential market.

Slightly more than a quarter of REALTORS®, 28 percent, reported working with at least one international client in the past year. This is a significant increase from the 2009 report, when 23 percent of REALTORS® worked with foreign clients. Eighteen percent of all REALTORS® were estimated to have completed at least one sale, compared to 12 percent last year.

"Several factors have contributed to an increase in international buyer interest in the U.S.," said Golder. "A large majority of REALTORS® report the changes in value to the U.S. dollar have had a strong impact on the international real estate business. In addition, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value."

International buyers came from 53 different countries around the world. The top four countries were Canada, Mexico, the U.K. and China/Hong Kong. With 23 percent of international buyers coming from Canada, the country has remained the largest buying group in the past three years. Foreign buyers from Mexico have been steadily increasing. In 2010 Mexico replaced the U.K. as the second largest buying group with 10 percent of buyers. Buyers from the U.K. buyers decreased from 10.5 percent in 2009 to nine percent in 2010. Eight percent of recent buyers came from China/Hong Kong.

Two factors important to international clients when purchasing property in the U.S. are proximity to their home country and the convenience of air transportation. Florida typically attracts European, Canadian and South American buyers while the East Coast draws Europeans. The West Coast brings Asian buyers and the Southwest attracts Mexicans.

International buyers were reported in 39 states in 2010, but a slight majority of the total buyers are concentrated in Florida, California, Arizona and Texas. These four states account for 53 percent of purchases and have remained the top destinations for the past three years, with Florida and California remaining the top two destinations.

The median price paid by international buyers for a home in the U.S. was $219,400, a decrease from 2009's median price of $247,100. However, the median price paid by foreign buyers was significantly higher than the overall median market price, which was $172,500 in 2009. On average, foreign buyers tend to purchase closer to the upper end of the market; 16 percent of the total international purchases were for homes priced at more than $500,000. According to REALTORS®, this was because international buyers are typically looking for a second home.

A majority of international buyers, 66 percent, purchased single-family detached homes. However, more international buyers purchased a condo than did their U.S. counterparts, at 23 percent and 7 percent, respectively. Only 44 percent of international buyers used a mortgage to pay for their home, compared to 92 percent of domestic buyers. Fifty-five percent of foreign buyers paid all cash. REALTORS® reported that a majority of international buyers use all cash because of the difficulty in establishing international credit in the U.S. Over one-third, 34 percent, of potential foreign buyers was unable to complete transactions because of financing problems in the U.S.

Source: NAR

"If the buyers need a place to live until their property closes, put them up at your house, in a hotel, send them on a vacation, but whatever you do, avoid allowing them to take possession of the property prior to closing," says Inman columnist Bernice Ross.

Ross believes that liability is too great and the risk of failure to close too severe when sellers let buyers move in early, but if such a situation is unavoidable, here are some of her key recommendations.

· Insist that the buyers sign a separate lease agreement with a two- or three-month security deposit.
· Use a lease agreement generated by an attorney or other real estate professional.
· Make sure that there is appropriate insurance in place. Standard homeowners insurance doesn't cover the situation.
· Document the condition of the property with extensive photos and videos.

Source: Inman News, Bernice Ross (07/06/2010)

NEARING RETIREMENT? CHECK THIS OUT.

Daily Real Estate News | July 2, 2010 |

States are wooing retirees with tax breaks. On average, retirees pay only half the state income tax levied on working-age people, according to researchers at the University of New Hampshire and Georgia State.

Seven states - Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming - don't tax personal income at all. New Hampshire and Tennessee tax interest and dividends but not other income. Still, these states may not offer the best total deal for seniors because other states have crafted special programs that reduce taxes and fees across the board.

Considering everything, here are the states that tax experts say offer the best deals for residents older than 65:

1. Georgia
2. Pennsylvania
3. Mississippi
4. Illinois
5. Michigan
6. Kentucky
7. New York
8. South Carolina
9. Delaware
10. Louisiana

Source: Forbes, Ashlea Ebeling (06/28/2010)

LOW END CONDOS ARE ALSO POTENTIALLY GOOD INVESTMENTS AS RENTAL PROPERTIES

Daily Real Estate News | July 1, 2010 |

Now could be a great time for home buyers to find a great deal on a condominium.

Here are three things that potential buyers of condos should consider:

1. Is this condo likely to fall further in price? Part of the answer is in falling or rising local inventory - even if sales have picked up recently.

2. Is this a fair price? Condo prices are more volatile than single-family homes. One big consideration is whether buyers in this particular complex are likely to be able to qualify for a mortgage. If the complex has too many renters, for instance, the Federal Housing Administration won't approve loans to buy units.

3. Is the condo association in good fiscal shape? Are they maintaining the grounds and the amenities as well as staying on top of needed structural improvements?

Source: Money Magazine, Beth Braverman (06/29/2010)

FORECLOSURE MARKET BOOMING AS LENDERS BEGIN TO UNLOAD FORCLOSED INVENTORY

Daily Real Estate News | June 30, 2010 |

Online foreclosure marketplace RealtyTrac reported today that homes in foreclosures accounted for 31 percent of the residential sales in the first quarter of 2010. The average sales price of these properties was nearly 27 percent below the average sales price of properties not in foreclosure.

RealtyTrac expects foreclosure discounts to stay between 25 percent and 30 percent as lenders steadily release foreclosures. The average price of foreclosed properties is $171,971.

Overall, foreclosures are down 14 percent in the first quarter compared to the fourth quarter of 2009. They are down 33 percent from the peak during the first quarter of 2009.

Source: RealtyTrac and Bloomberg, Dan Levy (06/30/2010)

ANOTHER OPTION TO FORECLOSURE

Daily Real Estate News | June 29, 2010 |

Thanks to new federal programs that offer cash incentives, some lenders are turning to deeds-in-lieu as the best solution for underwater borrowers, who are willing to turn over their properties.

It's cheaper for lenders to do deeds-in-lieu because it gives them overnight control of the property. With mortgage rates at less than 5 percent, lenders believe that they can resell a property faster and on more favorable terms than they would going through a short sale.

Matt Vernon, an expert in short sales and deed-in-lieu deals for Bank of America, says his company is offering cash incentives that range from $3,000 to $15,000 to persuade trouble borrowers to sign on.

Deeds-in-lieu don't harm a borrower's credit rating as much as a foreclosure or a bankruptcy, but because they are treated as debts that are "not paid as agreed," they do leave a mark.

Source: Washington Post, Ken Harney (06/26/2010)

SOMETHING FOR STRATEGIC DEFAULTERS TO BE AWARE OF

Daily Real Estate News | June 28, 2010 |

Analysts Question Fannie Mae Plan
Fannie Mae intends to file lawsuits against so-called strategic defaulters and force them to wait seven years before obtaining another mortgage backed by the organization. But experts wonder how the firm will determine which home owners defaulted strategically.

Experts also question whether the policy is viable given its departure from White House initiatives to bolster the housing market.

The policy is intended to force borrowers to pursue short sales or surrender the deed, rather than enter foreclosure, says Fannie Mae.

Source: New York Times, David Streitfeld 06/25/10

© Copyright 2010 Information Inc.

THERE RATES WILL NOT LAST. TODAYS REGULATORY ACTION IS GOING TO REVERSE THIS TREND

Daily Real Estate News | June 25, 2010 |

Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this week, down from 4.75 percent a week ago, reports Freddie Mac.

Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.

Source: Washington Post, Dina ElBoghdady (06/25/10)

© Copyright 2010 Information Inc.

AND JUST THINK HOW WELL THE GOVERNMENT IS GOING TO MANAGE HEALTH CARE

Daily Real Estate News | June 23, 2010 |

More than 1,200 prison inmates, including 241 serving life sentences, applied for and received first-time hom ebuyer tax credits, according to a Treasury Department report released Wednesday.

Treasury said many filed multiple claims, even some outside the alloted time persiod, and received help from paid preparers. Altogether they fraudulently received $9.1 million in tax credits with $1.7 million going to prison lifers.

The report also identified 2,555 filers who received $17.6 million for homes that they purchased before the tax credit program began. It flagged 206 filers who sought credits on multiple properties and were awarded $1.4 million.

In addition, 34 employees of the IRS were nabbed for filing illegally for the credit.

Source: CNNMoney, Aaron Smith (05/23/2010)

GOOD NEWS FOR SELLERS

Daily Real Estate News | June 18, 2010 |

Median home prices in California rose to $278,000 in May, up 20.9 percent from May 2009, according to MDA DataQuick, which tracks real estate data in the state.

Low mortgage rates and the tax credits encouraged the sales of lower- and higher-priced homes, pushing up the median price, says DataQuick President John Walsh.

Walsh cautioned that there are many homes in foreclosure that haven't been repossessed by lenders. If lenders take control of these properties and put them on the market, those sales will have a very negative effect on prices, he says.

Source: Associated Press, Jacob Adelman (06/17/2010)

THE TWO PRIMARY CAUSES OF THE HOUSING COLLAPSE AND SUBSEQUENT RECESSION FINALLY RECEIVE THE ATTENTION THEY DESERVE

Daily Real Estate News | June 17, 2010 |

Quasi-governmental mortgage finance giants Fannie Mae and Freddie Mac have voluntarily delisted their stock from the New York Stock Exchange after their values fell to less than $1.

The other option was to present a plan to bring share value back above $1, but the federal regulator in charge of the firms opted against that because, according to a notice from Federal Housing Finance Agency, the government couldn't be sure of success.

"A voluntary delisting at this time simply makes sense and fits with the goal of a conservatorship to preserve and conserve assets," said Edward DeMarco, the agency's acting director.

Source: The Wall Street Journal, Nick Timiraos (06/17/2010)

USEFUL TIPS WHEN SELLING A HOME

Daily Real Estate News | June 16, 2010 |

With more home buyers interested in eco-friendly features, property stagers are placing more emphasis on the overall performance of green dwellings.

To give their listings a competitive edge, they can perform an energy audit and indicate the changes and upgrades made as a result to boost energy efficiency.

They also should provide a checklist detailing the benefits of the home's green features, ensure cleaning products in cabinets are eco-friendly and food in pantries is organic, and include an aesthetically pleasing recycling center that goes beyond the traditional blue bins.

Additionally, chemical odors should be eliminated from the home, living plants should be added a to help enhance indoor air quality, sustainable upgrades should be encouraged, and eco-friendly landscaping like vegetable gardens and native grasses should be chosen over lawns that require a lot of maintenance.

Source: RISMedia (06/16/10)

© Copyright 2010 Information Inc.