Home Sales To Rise Gradually Into 2008

Home Sales To Rise Gradually Into 2008
After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turn around by summer, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.
Annual totals for existing-home sales in 2007 will be comparable to 2006, says David Lereah, NAR’s chief economist.
“Keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,” Lereah said. “We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it’ll be pretty much of a wash in terms of annual totals.”
The good news, he says, is that a steady improvement in sales will support price appreciation moving forward.
2006 Sales Third-Highest on Record
Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.
Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.
The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent, far below earlier consensus forecasts.
“The current interest rate environment and housing inventory levels present a window of opportunity for potential buyers,” Lereah says.
The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3.0 percent in 2007 to $248,900.
Soft Landing for Housing
“With all the wild projections by academics, Wall Street analysts, and others in the media, it appears that much of the housing sector is experiencing a soft landing,” Lereah says. “Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you’re in it for the long haul, housing is a sound investment.”
The unemployment rate is likely to average 4.8 percent in 2007, following a rate of 4.6 percent in 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent in 2007, compared with 3.3 percent last year.
Inflation-adjusted disposable personal income should grow 3.4 percent this year, following a rise of 2.7 percent in 2006.
— REALTOR® Magazine Online

Study Shows Risky, Least Risky Housing Markets November 8, 2006

Study Shows Risky, Least Risky Housing Markets November 8, 2006
Some California homeowners may see home prices decline over the next couple of years, according to PMI Mortgage Insurance Co., a Walnut Creek, Calif.–based private mortgage insurer.
PMI produces a quarterly U.S. Market Risk Index based on local economic conditions, income, and interest rates. The statistical model estimates the probability of falling home prices over the next two years.
Eight of the 10 riskiest home markets are in California, according to the analysis. They are:
1. San Diego-Carlsbad-San Marcos, Calif., 60.3 percent
2. Sacramento-Arden-Arcade-Roseville, Calif., 60.1 percent
3. Oakland-Fremont-Hayward, Calif., 60 percent
4. Santa Ana-Anaheim-Irvine, Calif., 59.9 percent
5. Nassau-Suffolk, N.Y., 59.8 percent
6. Riverside-San Bernardino-Ontario, Calif., 59.6 percent
7. Boston-Quincy, Mass., 59.6 percent
8. Providence-New Bedford-Fall River, R.I.-Mass., 59 percent
9. Los Angeles-Long Beach-Glendale, Calif., 59 percent
10. San Jose-Sunnyvale-Santa Clara, Calif., 58.9 percent
The report picks markets in Texas and the Midwest as the 10 least at risk of price declines, with Pittsburgh as the least risky. The least risky markets are:
1. Houston-Sugar Land-Baytown, Texas, 8.8 percent
2. Nashville-Davidson-Murfreesboro, Tenn., 8.6 percent
3. San Antonio, Texas, 7.8 percent
4. Fort Worth-Arlington, Texas (MSAD), 7.6 percent
5. Columbus, Ohio, 7.4 percent
6. Cleveland-Elyria-Mentor, Ohio, 7.4 percent
7. Cincinnati-Middletown, Ohio-Ky.-Ind., 7.2 percent
8. Memphis, Tenn.-Miss.-Ark., 6.8 percent
9. Indianapolis-Carmel, Ind., 6.3 percent
10. Pittsburgh, 6.1 percent
— REALTORS® Magazine Online

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For Sale By Owner, How to Sell your Home

Step One: The first step is selling your home is determining why you are selling your home. Are you selling your home for profit, because of job relocation, moving to a new neighborhood in the same area, illness or death of a family member, or change of scenery?
Suppose you are relocating due to a job advancement or placement. However, you are not scheduled to move for another six months. A well maintained and well marketed home, once listed, can sell within the first 30 days. You could be living in a motel for months prior to your relocation. If you are selling your home for a profit then you will need to know your homes' value. You will still need to consider your next home. Will you be paying a higher mortgage? How much of your profit do you put down on the next home? Determining the why is very important in meeting your overall objective. Plan and decided on your next home, if necessary, You should get Pre-Approved for a mortgage on your next home, if you plan to have mortgage. Talk to your mortgage lender about your plans to sell and purchase a new home. Your lender will be able to tell you how much home you will be able to purchase upon the successful sell of your current residence
Step Two: Now that you know or have made plans on your next home, it's time to focus on the sell of your current home. The big question you must be able to answer here is "what is my home worth?" You will need to do some serious research to determine what your home is worth and how much you want to sell it for. There are several different venues you could use to make your decision on price. One method is having a Comparative Market Analysis (CMA) done by a real estate broker. The CMA is usually free. However, you can expect the realtor to try to sell you on the idea of having him or her to sell your home for you. Also the CMA is not an actual appraised value of your home. The CMA basically tells you what homes in your area similar to yours is currently selling for.
The most reliable method and the one I highly recommend is to have a professional appraisal done by an unbiased appraiser. The average appraisal cost is about $350 to $400 dollars, depending on the square footage of your home and the number of acres. This may seem like costly but the appraiser provides you with more than just an average price for your home. They usually tell you about some of the imperfections, or issues that need to be addressed. Most appraisers will provide you with tips, tell you what buyers might be looking for when buying a home, and recommend what to fix, upgrade or leave alone.
Step Three: Prepare your home to Market. Curb Appeal is the First and Most Important Factor in Selling your Home. It is a known and proven fact among realtors across the nation that the home owner who spends more time on improving the face of their home sells first. This preparation should start weeks prior to placing your house on the market. When you go to purchase a car or anything, you expect it to be appealing to the eye. Your home should be the same way. The most important aspect of selling your home is Curb Appeal. I have a complete article on Curb Appeal- Click Here.
Step Four: Make repairs and makeovers to your home. If you know that your gutters need adjusting, some of your windows stick, old wallpaper need to be replace or any minor repairs, make it happen. Don't try to shortcut. Today buyers are well informed and usually have been to many other home prior to coming to yours. Also you don't want to get caught up in a law suit if you fail to mention or hide an imperfection in your home. Minor repairs really doesn't have to cost much. Before you make a make a major renovation in your home ask your appraiser if it would be worth it.
Step Five: Fine and use every medium available to sell your home. The more advertisement you have out on selling your home the better the odds are that you will sell your home fast. Many buyers are viewing homes on the Internet. There are many "For Sale by Owner" websites in the Internet. A lot of them offer free service and a lot of them charge to place your home on their site. Many of the sites are ran by national companies that advertise thousands of homes. The chances of prospective buyers finding your home among thousands are not good. Choose a website that is locally focus. When a prospective buyer go to a search engine to look for a home they use key words such as "real estate in Western Massachusetts" or "home for sale in Springfield." Most buyers do not just look for homes that are for sale by owners, they just want to find the best home in a specific area.
Place your home in the local newspaper classifieds. If you use the newspaper also inform buyers that they can view photos of the home at whatever website you choose to advertise. Otain more information on selling your home at www.mawestrealty.com.

Mortgage Rates Drop Slightly Last Week

Daily Real Estate News September 15, 2006 Mortgage Rates Drop Slightly Last Week The national average rate on a 30-year, fixed-rate mortgage was 6.43 percent last week, down slightly from 6.47 percent the week before but up from 5.74 percent a year ago, according to Freddie Mac.The average for the 15-year, fixed-rate mortgage was 6.11 percent, down from the previous week’s 6.16 percent but again higher than the 5.32 percent average for the same period last year.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.1 percent, down from 6.14 percent. A year ago, the five-year ARM averaged 5.26 percent.
The average rate on one-year ARMs was 5.6 percent last week, compared with 5.63 percent the previous week and 4.46 percent a year ago.
“Although 30-year mortgage rates are about three-fourths of a percentage point higher than they were last year, it's good to keep in mind that rates have dropped from the high of 6.8 percent reached just eight weeks ago,” says Frank Nothaft, Freddie Mac vice president and chief economist. “And with short-term interest rate increases seemingly on hold, for a while at least, interest rates overall should not experience any big shifts in either direction.”
“The risk to our forecast of relatively stable mortgage rates is that inflation will unexpectedly heat up, causing bond markets to raise their expectations that the Fed will intervene by raising short-term rates,” Nothaft adds. “In that case, mortgage rates will again start to rise.”
— REALTOR® Magazine Online. More information at www.mawestrealty.com

Home Sales Expected to Stabilize

NAR: Home Sales Expected to Stabilize(July 11, 2006) -- Home sales are projected to ease modestly but should stay within a relatively narrow range during the balance of the year, according to the NATIONAL ASSOCIATION OF REALTORS®.“The major housing indicators have been moving up and down within a reasonable range, which means the market should even-out just below present levels,” says David Lereah, NAR’s chief economist. “At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate. We should see home sales rise and fall month to month, but don’t look for any big shifts one way or the other.”Existing-home sales are expected to decline 6.7 percent to 6.6 million in 2006 from 7.08 million last year. That would still be the third-highest level on record. New-home sales should fall 12.8 percent this year to 1.12 million from 1.28 million in 2005. Housing starts are forecast to decline 6.8 percent to 1.93 million this year from 2.07 million in 2005.The 30-year fixed-rate mortgage is likely to reach 7 percent by the end of the year. “The uptick in interest rates has been slowing home sales,” Lereah says. “We remain concerned about the potential impact of higher interest rates in some of the more expensive areas of the country.”NAR President Thomas M. Stevens from Vienna, Va., says consumers who have been on the sidelines should feel more confident about the market normalization. “When it comes to big ticket purchases, buyers are more comfortable in a stabilizing environment,” says Stevens, senior vice president of NRT Inc. “At the same time, home sellers in most areas understand that the period of abnormal price growth is over, and they have become more realistic about the current market. This is helping to ease the pressure on home prices in some areas.”The national median existing-home price for all housing types is expected to rise 5.3 percent to $231,300 in 2006. With more construction in lower cost regions as well as price incentives that are helping to clear unsold inventory, the median new-home price should increase 1 percent this year to $243,300.The unemployment rate is projected to average 4.7 percent in 2006, while inflation, as measured by the Consumer Price Index, is forecast at 3.4 percent. Growth in the U.S. gross domestic product is expected to be 3.4 percent this year, and inflation-adjusted disposable personal income is likely to grow 3.1 percent.— NAR
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Market Trends in Greater Springfield and Western Massachusetts

The housing market in the Greater Springfield, Massachusetts area has been very active. Unlike the previous year where the market reached record prices. The prices has stabilized, and in some cases have dropped. The inventory of houses on the market is very high, which gives buyers more options. Buyer's don't feel pressured to buy or worry so much about competition. This is good for buyers, but they are feeling pressure to make a move soon because of the rise of current mortgage rates . According to the National Association of Realtor On-line Magazine. "30-Year Mortgages Hit Highest Rates Since '02(May 26, 2006)."
"Long-term mortgage rates continued their upward trend this week, reaching the highest point since June 2002. According to Freddie Mac, interest on 30-year loans bumped up to 6.62 percent from 6.60 percent; while 15-year mortgage rates rose to 6.23 percent from 6.20 percent. Adjustable-rate mortgages bucked the trend, with the one-year ARM dipping to 5.61 percent from 5.62 percent last week and five-year ARMs dropping to 6.21 percent from 6.23 percent over the same period. All of the rates are up noticeably from a year ago, when the averages held at 5.65 percent for 30-year mortgages, 5.21 percent for 15-year loans, 4.21 percent for one-year ARMs, and 5.07 percent for five-year ARMs."
Source: Contra Costa Times, Martin Crutsinger (05/26/06)
Most realtors are advising their sellers to drop the listing price by 3 to 5 percent to compete with the market trends. Yes, the market has turned a little in favor of the buyers. However, don't be fooled the sellers still have the ball in their court, thanks to the rise of interest rates. Below are some numbers in the Greater Springfield Massachusetts area; Single Family homes sold or under agreement in the last two months in Agawam, Longmeadow, Chicopee, East Longmeadow, and Springfield as of May 26, 2006
Agawam: Single Family Listings: 85 Average List Price: $243,502 Average Sale Price: $238,185 Average Market Time: 77.45
Chicopee: Single Family Listings: 101 Average List Price: $186,966 Average Sale Price: $185,405 Average Market Time: 68.42
East Longmeadow: Single Family Listings: 44 Average List Price: $329,839 Average Sale Price: $320,702 Average Market Time: 120.59
Longmeadow: Single Family Listings: 59 Average List Price: $379,549 Average Sale Price: $334,484 Average Market Time: 100.54
Single Family Listings: 408 Average List Price: $157,927 Average Sale Price: $156,144 Average Market Time: 87.73

The totals and averages of the above cities combined out of 500 listings:
Single Family Listings: 500 Average List Price: $204,266 Average Sale Price: $199,077 Average Market Time: 86.91

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30-Year Mortgages Hit Highest Rates Since '02

30-Year Mortgages Hit Highest Rates Since '02(May 26, 2006)
Long-term mortgage rates continued their upward trend this week, reaching the highest point since June 2002. According to Freddie Mac, interest on 30-year loans bumped up to 6.62 percent from 6.60 percent; while 15-year mortgage rates rose to 6.23 percent from 6.20 percent. Adjustable-rate mortgages bucked the trend, with the one-year ARM dipping to 5.61 percent from 5.62 percent last week and five-year ARMs dropping to 6.21 percent from 6.23 percent over the same period. All of the rates are up noticeably from a year ago, when the averages held at 5.65 percent for 30-year mortgages, 5.21 percent for 15-year loans, 4.21 percent for one-year ARMs, and 5.07 percent for five-year ARMs. Get More info at www.mawestrealty.com

Source: Contra Costa Times, Martin Crutsinger (05/26/06)