Home Sales Expected to Uptrend

Home sales are expected to stay on an uptrend through 2012. The chief economist of the National Association of Realtors, Lawrence Yun, expects 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million. Rates are lower than low so call if you would like to buy or sell. Now is the time.

30 Mortgage Rates Up

The average rate on 30-mortgages toped 5 % this month. Rates followed Treasury notes fueled by fear of higher inflation. Five percent is still wonderful though. It’s all relative but some of us remember 18% rates! 5% is a once in a lifetime opportunity for this buyer’s market. On a $200,000 loan compared to November’s rates is still less than $100 per month. And with enough down and a score above 650 you might get a rate of 3.5%. It’s all relative, but still great! Go on my website to Mortgage Center to get a quote.

RATES INCHING UP - BUY NOW!

This just in from the Wall Street Journal: Mortgage rates rose again last week to their highest level since July.
The 30-year fixed-rate mortgage averaged 4.66% last week, up from 4.56% two weeks ago. That’s still below the year-to-date average of 4.74%, but it’s up from a low of 4.21% in October.
Rising rates are likely to further crimp refinance activity, which was down 1% for the week and down 8% from year-earlier levels.
But rising rates could encourage some fence-sitting buyers to close deals, and home-purchase mortgage applications jumped by nearly 2% last week, sending activity to its highest level since May.
Rates are closely tied to the 10-year Treasury, which has been on the rise over the past few weeks and jumped in recent days after the tax-cut compromise struck by the White House and congressional Republicans.

LOWEST MORTGAGE RATES IN HISTORY!

This just in from our Realtors Association:
Mortgage applications to purchase homes rose 0.3 percent on an adjusted basis last week, virtually unchanged from the previous week, according to the Mortgage Bankers Association weekly survey.On an unadjusted basis, purchases decreased 0.3 percent compared with the previous week and were 34.1 percent lower than they were the same week a year ago.This trough in purchases comes despite the fact that 30-year fixed rate mortgages are at the lowest level they’ve been since the MBA began keeping track: 30-year fixed-rate mortgages decreased to 4.57 percent from 4.60 percent. 15-year fixed-rate mortgages decreased to 3.95 percent from 4.03 percent. 1-year ARMs decreased to 7 percent from 7.10 percent.

MORTGAGE RATES AT 3 MONTH LOW

Long term mortgage rates dropped again this week, ending at an average of 5.12% down from 5.29%. The new rates were the lowest in nearly three months. Great time to buy! Just call Judy.

HOME PRICES RISE IN ABQ

Well, the prices didn't go up by much, but they didn't go down. Last year the average price was $246,000 and now it is $247,000. Most of the sales are happening in the price range $100,000 - 300,000 so that depresses the average abit. In this price range we see first time homeowners and local couples moving up from their first home. FHA loans are quite popular and NM has a program for first time homebuyers called MFA that pays the down payment. Lots of VA loans too. Looks like whoever can get help is getting it with these government programs. The range between $300,000 - 500,000 has fewer buyers and these houses sit on the market 3-4 months or more. It's an in between range where buyers need at least 10% down. Most people in this group and above, need to sell their home first and they are fearful to buy before they sell. They can't afford to end up with two payments for an extended period.
None of my deals are straight up easy ones anymore. I am seeing more Real Estate Contracts where the seller carries some amount until the buyers home sells. The buyer still needs to come in with enough cash to cover closing costs so it is not a slam dunk. One deal this week was a REC for just three weeks while the buyer who is over 62 years gets a reverse mortgage on the equity in the house and pays off the seller. YOu just need to be 62 to qualify for a reverse mortgage. Interesting.
We have more homes under contract than in months. It feels to me like the market is turning around. I think we hit bottom and didn't realize it. Let's hope.

CREDIT SCORES TAKE CENTER STAGE

As a realtor, lenders have always been my friends, but many are now infuriating. With much of the blame for the housing crisis being laid at the feet of the lenders, they are in heightened defense mode. In reality nothing much has changed --- rates are about the same "mas o menos" 6%, buyers with good credit can get loans, appraisers are following their independent process to establish value --- but buyers are scared off and lenders will hang up a closing in that dark pit called Underwriting for days with no compunctions. Sure there were a few bad lenders giving credit or too much credit to marginal buyers. For myself, I will not accept offers on my listings from the marginal brokers, but then I always did that. Buyers who are marginal in their credit history, I send to lenders who will coach them to a good score before I take them out to look at houses. Disappointing for them? Yes. Realistic and professional? Yes. Not all realtors did that so they share blame for this crisis too. Now is a good time to buy, but not for everyone.
Credit scores have become almost an obsession with buyers so here are some interesting aspects. The LA Times (yes, I still read it but am over any other addiction I once had with Los Angeles except perhaps for the Lakers and good jazz!) had an article missed by our local news on the largest-ever class action lawsuit which promises free access to credit data. We will all be able to get our credit scores with no strings attached under a settlement with TransUnion Corp. Good timing, as we all need to take more heed about how we spend our money. I have a full article in my Legacy Outlook Newsletter this month on what makes for a good credit score. Turns out payment history and debt account for two-thirds of the score. Of that, credit card debt matters the most and balances affect the score as much as payment history. Keeping credit balances to 10% of the limit on any card will boost your scores. For the complete article, drop me an email.
So it is a good time to buy or sell, but the unqualified or too aggressive lenders and borrowers will have to jump through higher hurdles now, and that's just fine. It makes the whole real estate market stronger for all of us.

RIO RANCHO IN GOOD STANDING NOW

One of my readers just informed me that the status of Rio Rancho as a Declining Market as designated by lenders has been rescinded. Thank you, Loran. I am double checking with Jason Pike at Countrywide to make sure. We sold one of our listings in Rio Rancho today that had been on the market for months and are seeing more activity there so our on the ground sense is that things have turned a corner. Not just in Rio Rancho, but all over the Greater ABQ/RR area. Although Memorial Weekend was deader than a doornail, things have picked up this week and we had four closings this week. Ahhh, money again. It's great. Keep those comments coming......

RATES HIT NEW LOWS! BUY! BUY!

Rates hit a 2 month low this week!
These low rates likely will not last. Yesterday, mortgages and treasuries improved with the stock market drop,
and analysts continued to forecast more credit losses. With record oil prices and a weakening US dollar,
inflation concerns grow in the market, which means rates are likely headed higher.

Don’t wait for rates to go back up!
Lock in your low rate today!

30 Fixed 15 Fixed 5 Year ARM

5.375% 2pts 5.00% 2pts 4.50% 2pts
5.625% 1pt 5.25% 1pt 4.875% 1pt
5.875% 0pt 5.50% 0pt

RIO RANCHO A DECLINING MARKET

The Albuquerque MSA which includes Rio Rancho has been designated as a Category II for declining market. This has been the case for the past six months. As far as financing is concerned, it is business as usual UNLESS the appraiser indicates the property is in a declining market OR oversupplied OR the marketing time is over six months. IF the appraiser identifies the property as such, then the loan-to-value must be reduced by 5%. Again, SOME lenders require additional information. This does NOT mean that the borrower cannot buy the home. If the borrower is putting 10% or more down, it does not make any difference !!!! IF the borrower is only putting 5% down, we would require an additional 5% down. To date I have not had one issue.

CONSUMER REPORTS SAYS BUY NOW!

With regard to homes, Consumer Reports’ has three possible buying opportunities.
Homes – Prices are down and few expect a sharp rise anytime soon. Most markets seem to have stabilized so holding off for more declines is probably a failed strategy unless you want to take the risk of buying foreclosures.

Mortgages – They report accurately that interest rates are relatively low, averaging 5.5% for 30 year mortgages. Credit standards have been tightening though so expect to go through some documentation hoops, but it will be worth it. Lenders are anxious to loan having seen a decline in their business volume too.

Home Remodeling – CR suggests that will lower demand that it could mean room to bargain for those remodels you want. Contractors are easier to get a hold of and have little to no wait times before getting started on a job.

HOUSING RECOVERY LATE 2009

Forecast Positive for Second Half of 2008Thursday, March 06, 2008 National Realty News

WASHINGTON, D.C. - The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors®. Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. “The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he said. “Therefore, a notable rise in home sales can be anticipated in the second half of the year." Realtors locally report that calls off of signs and activity has picked up in since the start of March.
In ABQ, the number of sales is off by 35% from last year this month, but the average sales price has increase about 1% a month so far this year. A pattern of disparate price performance continues around the country with a roughly even split between up and down markets. Many areas that have lost jobs are showing price declines which might be why ABQ looks good. We are gaining jobs.
“New-home sales nationally should decline 23.7 percent to 590,000 this year before rising 7.2 percent to 633,000 in 2009. Locally, KB Homes has announced that they are leaving ABQ. For years they successfully built for starter-homes at the low end, but their last move to higher priced homes here has proven to be a poor strategic move.
The 30-year fixed-rate mortgage, which has moved erratically in recent weeks, is expected to hover around 5.8 percent most of the year, and then rise to an average of 6.3 percent in 2009. Growth in the U.S. gross domestic product (GDP) should be 1.5 percent this year and 2.4 percent in 2009. The unemployment rate is projected to average 5.4 percent in 2008 and 5.5 percent next year. Inflation, as measured by the Consumer Price Index, will probably be 3.2 percent this year and 1.5 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.4 percent in 2008 and 3.1 percent next year.

REAL ESTATE NEWSLETTER

Here is a link to my "March Real Estate Update":http://realtytimes.com/112/JudyPierson

This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.This month's issue includes topics such as: "When Selling Your Home, Using Scents Makes Sense!";"Condos Pay Off As Second Homes";"Timing Is Everything: When And How To Move"; "How To Stop ID Theft Cold";"Use Home Equity Protection"; Plus a roundup of February real estate activity as well as much more advice and information.I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too! If you do not wish to receive this Newsletter each month, please reply to this e-mail with the word 'REMOVE' in the subject line.Sincerely,Judy Pierson

Mortgage Rate Adjustments in Some ABQ Areas

This just in from my friend, Jason Pike at Countrywide: You might have heard about a 5% reduction to the maximum loan-to-values (LTV) on properties that are classified as "soft market". This is starting to hit the street and if you have concerns, pay close attention to offers that are coming in with zero down payment. In December, the Albuquerque Area made the map as an area that could see values decline. The category that our area falls into requires the lenders to rely on the appraisal. Other areas such as Phoenix and Las Vegas are mandated to follow this policy regardless of what the appraisal states. The MAXIMUM LTV must be reduced by 5.00% IF the appraiser identifies the property as follows: 1. The property is located in a declining market. 2. OR the area has an over supply of inventory. 3. OR the property lies in an area that has a marketing time of six months or greater. What does this mean? The first thing to understand is that it means NOTHING on FHA or VA transactions!!!!!!!!!!!!!!!!!!!!!!!!!! This only affects HIGH LTV's. So if a borrower planned on a 5% down payments and the property was identified as above, the borrower would need to be relocked into a 100% program. If the borrower planned to finance 100%-they would be out of luck!!! INVESTORS - Assume the required down payment is 20% and the property falls in one of the categories. The investor would be required to have an additional 5% down payment.