Saturday, April 18, 2009

Open Houses Are Still Worth It, Practitioners Say

Open Houses Are Still Worth It, Practitioners Say Despite a changing market, many real estate professionals say open houses are still a good way to showcase a home.Open houses work just as well as they did a few years ago when the market was very competitive, says Trudy Severa, an associate with Long & Foster in Reston, Va. "Anything you can do helps," says Severa. "It's a numbers game, and there is no way to know the residual effects [that an open house can have]."Some practitioners have had success joining forces with others to produce a group tour. For instance, seven different practitioners recently held a neighborhood open house in Washington, D.C., where participants could view eight listings ranging in price from $500,000 to more than $1 million.

An open house can be an opportunity to talk to potential buyers who are interested but who might be unsure about the uncertain market, says Mario Rubio, a practitioner with Rubio Real Estate in Annandale,Va. He suggests having a loan officer/mortgage banker on hand at the event to answer questions.

Source: The Washington Times, Cary Lee Dailey (04/10/2009)

States Contemplate Loans for Home Buyers

States Contemplate Loans for Home Buyers The $8,000 first-time home buyer mortgage tax credit, which is part of the Recovery and Reinvestment Act of 2009, is a great boon. But, it doesn’t help people who don’t have money for a down payment and closing costs. Now some states are contemplating offering an $8,000 loan to home buyers before they close on the condition that they repay the loans as soon as they get their federal tax credits.

The idea has been adopted in Missouri, which advances the money to those who take out first mortgages offered through the state’s housing finance authority. The New York State Builders Association is lobbying the State of New York Mortgage Agency to adopt a similar strategy.“A lot of states are trying to get through the technical aspects of this," says Gregory Brown, an assistant vice president for government affairs at the National Association of Home Builders. "I feel very confident they’ll find a way to make it work.”Meanwhile, some home builders are taking matters into their own hands, offering programs that purchase the tax credit from borrowers prior to closing.

“This is a legitimate monetizing program that actually works,” says David Abrahamson, vice president of S.E. operations for American Home Key Mortgage Company, which makes the loans for many participating builders in the southeast.

Source: The New York Times, Bob Tedeschi and, Paul Jackson (04/10/2009)

Some Cities Feel More Pain Than Others

Some Cities Feel More Pain Than Others Some cities have it rougher than others. Forbes magazines examined the overall economic conditions in the 50 largest U.S. metropolitan statistical areas to identify places where the cost of living and unemployment are highest and median income is lowest.

It concludes that these cities are the places whose residents are feeling the worst effects of the recession. Observers say that in the most down-at-the-heels cities, residents have the feeling that there isn’t much good about anything. But Dean Baker, an economist and co-director for the Center for Economic and Policy Research based in Washington, D.C., says one result of the declining economy that’s good news in the long run for residents is lower home prices. “You’re going to see these prices stay down,” Baker says.Here are the 10 cities where the overall conditions look the worst:Providence, R.I. Los Angeles Riverside, Calif. Tampa Buffalo, NY Portland, Ore. Orlando Detroit Miami Louisville

Source: Forbes, Lauren Sherman (04/14/2009)

Signs Point to Improving Economy

Signs Point to Improving Economy Economic observers point to several factors that indicate the economy in general and the housing market in particular may be on the mend.Positive signs include:

● Sales of single-family homes in March remained flat compared to January and February at $358,000, the U.S. Commerce Department reported.

● The Labor Department reported claims were down in the week ending April 11. While some argued this could just reflect the shortened Easter/Passover holiday, others took the optimistic view that some segments of the economy are stabilizing.

● New-home construction remains low because there is so much inventory—but the situation doesn’t appear to be worsening."The economy is still very weak, but there are some encouraging signs that support cautious optimism," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech Thursday.

Source: The Wall Street Journal, Sudeep Reddy (04/17/2009)

7 Tips to Avoid the Vacant Home Look

7 Tips to Avoid the Vacant Home Look Selling a home that is vacant can be harder than selling a lived-in home, experts say. Here are some ideas from Pam and Dave Pettigrew, certified residential specialists with Prudential Rocky Mountain in Fort Collins, Colo., on what practitioners and sellers should consider to protect an empty property and get it sold.

Give the house a lived-in look. Get a neighbor or family member to make the house look occupied by parking a car in the driveway, opening and closing the drapes and taking in any mail. Groom the yard. Use a lawn service during the summer to keep the grass cut and a snow removal service in the winter to scrape the walks and driveway. No outstanding nicks. Hide the effects of missing furniture.

Paint and replace rugs so there are no faded spots or blemishes on the walls. Cover accent paint that alone looks odd. Leave some furniture. A few chairs, tables, lamps and beds (or empty mattress boxes with spreads) give buyers a sense of space. Keep the utilities on. Set the thermostat at a comfortable level during the winter and summer. Hire a maid. Make sure the home remains spotless. Check the homeowner’s policy. Understand the coverage when the home is vacant.

Source: Coloradoan, Pam and Dave Pettigrew (04/12/09)

Fed Report: Real Estate Stabilizing in Key Cities

Fed Report: Real Estate Stabilizing in Key Cities While real estate and other industries remained weak in all 12 of the Federal Reserve districts, there is reason for optimism in several areas, according to the Federal Reserve, which released its periodic “Beige Book” report of economic activity on Wednesday.

In Boston, Fed contacts reported “early signs of improvement” in the residential real estate sector, and the news was equally good in New York where the book said banks are reporting “the most widespread rise in demand for residential mortgages in more than seven years.”In Richmond, Va., commercial real estate is reporting moderate increases in activity and residential lending is rising because of strong demand for refinancing, the report said. Demand for refinancing is "hard to keep up with," one of the Fed's contacts said.Meanwhile, commercial real estate weakened in Kansas City while residential real estate is holding steady, the report concluded.

Source: The Wall Street Journal, Meena Thiruvengadam (04/15/2009

Federal Housing Rescue Plan Launches

Federal Housing Rescue Plan Launches The Obama Administration’s program to rescue distressed home owners got off the ground this week. The program was announced on Feb. 18, but it took several weeks to put the bureaucracy in place.Six of the nation’s largest banks signed up to participate, the Treasury Department announced Wednesday.

They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.

The plan calls for loan servicers to reduce interest rates so a family’s monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current.

Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments—and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.

Source: CNN, Tami Luhby (04/16/2009)