November 14, 2014

American Housing Survey Reveals 87 Percent Of US Housing Units Occupied

American Housing Survey Reveals 87 Percent Of US Housing Units Occupied

Based on the 2013 American Housing Survey (AHS) report released by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau last month, approximately 87 percent out of the 133 million total residential housing units in the United States in 2013 are occupied.

Since 2011, the number of occupied housing units had an increase of 413,000. During that time, 35 percent of the housing units were occupied by renters while 65 percent were occupied by homeowners.

The median size of all single-family detached housing units in 2013 was 1,800 square feet, with a median lot size of .25 acres acccording to AHS. Such lot size shows a significant reduction in the lot sizes compared from 1973 when the first year the AHS was sponsored by HUD and done by the Census Bureau. At that time, .36 acres was the median lot size of a single-family detached housing unit.

Furthermore, the AHS reported a reduction in the monthly costs for all occupied housing units from 2011 to 2013 from $927 to $896. The owners’ median monthly costs decreased from $1,008 to $934, while the renters’ cost slight increased from $845 to $850.

As for the good news, according to the AHS, the number of homes reported to have moderate to severe physical problems especially in their electrical, heating or plumbing systems have reduced from 2011 to 2013. In 2013, there were four million homes with moderate physical problems while about two million homes had severe ones.

November 14, 2014

Bank of America No Plans On Loosening Up On Mortgage Credit Standards

Mortgage

Although policymakers have been hinting on their desire to open the mortgage credit box allowing more borrowers, the CEO of Bank of America claims that the banking institutions aren’t likely to relax on their credit standards any time soon.

Bank of America CEO Brian Moynihan, who was one of the speakers during the investor conference held in New York, claim that their company, the institution usually listed among the top five mortgage lenders in the country, has a few incentive “to try to create more mortgage availability where the customers are susceptible to default.”

His statements are against the most common complaints today about the mortgage industry, which is their over-tight lending standards that have certainly lessen the amount of potential homebuyers in the market.

Such issue is usually shared by young first-time homebuyers who are facing not only the tightening mortgage criteria but also the difficulty to save on their down payment.

Even with such complaints, Moynihan claims that their bank doesn’t have any plans on offering low down payment options, and instead suggest that these potential homebuyers consider renting than purchasing their own home.

However, the government continues to promote homeownership with both Fannie Mae and Freddie Mac taking steps to encourage lenders to provide more options to borrowers. Last month, Director of the Federal Housing Finance Agency (FHFA) Met Watt revealed that the GSEs are currently working on guidelines for mortgages with loan-to-value ratios between 95 and 97 percent, thus allowing down payments as low as 3 percent. Aside from this, FHFA is working on their representation and warranty framework to lessen the concerns of lenders on buyback risk.

Though this might pacify some individuals who claim that the tight mortgage credit standards have been holding them back from homeownership, Moynihan believes his institution takes a longer view.

“I know that that doesn’t sound good for an instant housing recovery and faster housing markets, but it’s actually good, because in the long term it keeps housing more fundamentally based,” he said.

November 14, 2014

North Carolina Sees Surge In Zombie Foreclosures

Zombie Foreclosure

North Carolina was named as one of the 16 states with the year-over-year increase in “Zombie Foreclosures.”

Zombie foreclosure is a term used when the homeowner, who is in financial distress leaves the property before the bank completes the foreclosure process. The number of zombie foreclosures in different places across the country continue to grow even though it’s dropping nationally.

New Jersey tops the list of 16 states in the third quarter where a surged of zombie foreclosure numbers were noticed with a 75 percent year-over-year increase, followed by North Carolina (65 percent), Oklahoma (37 percent), and New York (30 percent) and Alabama (29 percent).

New York metro area garners the top spot of the most zombie foreclosures with 13,366 in the third quarter. This is followed by Miami (9,869), Tampa (7,509), Chicago (7,326), Philadelphia (5,405) and Orlando (3,732).

According to RealtyTrac, there were 117,300 owner-vacated foreclosures nationwide in the third quarter, which is down 23 percent from the same period in 2013. They currently account for 18 percent of the total properties in foreclosure. Such properties will either be sold through a short sale, a foreclosure auction or a bank-owned sale.

Out of all the metros with a 200,000 population, 28 percent or 60 cities saw a increase in zombie foreclosures.

RealtyTrac’s Vice President Daren Blomquist said that lengthy foreclosure timelines make a “zombie foreclosure breeding ground”. “As we see a backlog of delayed distress finally hit the foreclosure pipeline in some of those markets, the problem is coming more to light,” he said.

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November 14, 2014

All-Cash Home Buyers and Institutional Investors Enjoy Huge Discount Rates For Q3

All-Cash Home Buyers and Institutional Investors Enjoy Huge Discount Rates For Q3

According to the U.S. Institutional Investors & Cash Sales Report for Q3 2014 released recently by RealtyTrac, all cash buyers and institutional investors enjoyed huge discount rates when they bought residential homes from the average market value at the time of purchase compared to the average rate for all U.S. homebuyers in the third quarter.

RealtyTrac’s report show that institutional investors, which are described as entities that bought at least 10 properties within 12 months, paid an average price of $159,389 in third quarter, which is a 15 percent discount from the average market value at purchase of $187,637. As for cash buyers, they got about 10 percent discount in the same quarter with an average purchase price of $227,905 compared to the average market value at $252,640.

The discounts enjoyed by both parties were certainly below the average rate for all homebuyers, according to RealtyTrac. All homebuyers who bought a home in the third quarter paid an average price of $278,040, a 4.3 discount from the the average market value at purchase price of $290,531.

Furthermore, these all-cash home sales represent a huge share of distressed sales (54.6 percent), which involves homes currently bank-owned or those within the foreclosure process.

All-cash sales represent 33.9 percent of single-family and condo sales in the third quarter, which is a slight drop from 36.9 percent in the second quarter and unchanged from the same period in 2013. In addition to that, RealtyTrac’s report showed that the cash sales were greatest at the highest and lowest extremes of the housing market with 64 percent of home sales done under $100,000 and 41 percent above $2 million.

As for the share of single-family and condo homes bought by institutional investors, it dropped from 5.3 percent in Q3 2013, 5.0 percent in Q2 of this year to a four-year low of 4.3 percent in Q3.

November 14, 2014

Brick Home Maintenance

Brick Home Maintenance

Brick is considered one of the most durable materials you can use to construct your dream home. In fact, it has been a traditional building material found in most historic homes all over the world. A lot of homeowners love to use such material because aside from its durability, it’s beautiful and can help increase the resale value of properties.

But, like other building materials, regular and proper maintenance of bricks is necessary especially if you have plans to sell your home. If well maintained, brick homes can actually last a century or more. Below are some tips to remember on how you can preserve and maintain your brick homes.

Inspect your bricks periodically. Checking regularly your brick home allows you to determine any problems especially during the first stage. During inspection, keep in mind that most of the damage you may possibly find is not in the brick itself but in its mortar, either it’s crumbling or there’s a presence of moss or mildew. To remove such growth, you can use a mixture of bleach and water, and scrub it using a stiff brush.

Clean your brick exteriors regularly. Brick exteriors require only very little cleaning with the use only of a garden hose to spray the brick walls and a brush to scrub the area. If water and brush aren’t enough to get the job done, you can also use a commercial cleaning agent but be sure you read the directions to avoid damaging your bricks.

Check for growth of vines or other plants. Although plant growths look pretty on your home’s exteriors, they’re actually causing damage to your bricks. These plants adhere to the brick, which eventually causes erosion. When removing vines, always cut the one nearest the soil then allow them to die rather than pulling them off.

Assess for any signs of efflorescence. Efflorescence is a gradual growth of salt crystals from the brick that migrate to the surface whenever water enters it. You easily see this in the form of chalky deposits on the brick’s surface. This can be cleaned using a stiff brush and a chemical cleaning agent.

Ensure that your weep holes are clean. Weep holes were originally built to allow moisture from the brick walls to drain to the outside. Make sure you check and clean them regularly as clogging can cause water damage.

Repair immediately once you find any damages. When you find that either the bricks or mortar are damaged, crumbling or missing, be sure to repair the area right away before it causes further damage. If you know how to repair the brick and/or mortar damage, you may do so with the use of the right equipment and supplies. If not, you can ask the help of professionals to get the job done properly for you.

November 13, 2014

Real Estate Professionals Believe Housing Recovery To Take Another Three To Five Years

Real Estate Professionals Believe Housing Recovery To Take Another Three To Five Years

In a quarterly survey conducted by Zillow, the findings revealed that out of more than 100 real estate professionals and expert, 40 percent believe that the housing recovery is still three to five years away based on the present trends in home prices and homebuyer activities.

However, about one third of the panelists were hopeful as they predict the housing market will normalize in one to two years while one out of five claim that the market is already stable or will within the next few months.

In another recent study conducted by Zillow, from one quarter in 2000, the number of adults living with at least one roommate has increased to one third in 2012.

Although these numbers mean potential new formations in the next few years, they remain stuck because of a slow growth in their wages and jobs.

Aside from these, Zillow also claims that demographic issues play a role in the current housing market. Millennials are delaying any form of major life commitments like marriage, parenthood and ownership while a lot of Americans nearing the retirement age are choosing to live in their homes longer, which significantly affects the housing recovery.

“We’ve reached a point in the recovery where the only real cure-all is time,” said Dr. Stan Humphries, Zillow’s Chief Economist. “[T]he landscape is slowly changing, as incomes begin to grow, negative equity fades and new households start to form. These shifts won’t occur overnight, but they are happening. Patience will be a virtue over the next few years as we wait for these traditional fundamentals to more fully take hold in the market.”

November 13, 2014

Cost-Effective DIY Curb Appeal Ideas

Whether you’re planning to sell your house or you simply want to spruce up your home’s exterior, curb appeal is certainly important. Fortunately, boosting your curb appeal doesn’t mean you have to break your bank as there are a lot of affordable do-it-yourself projects out there. Below are some must-try ideas.

Front door makeover. Remaking your front door is totally easily and gives excellent results. By simply painting your front door, you’re already changing the overall appeal of your home. Establishing a focal point is the key to make an impact and your front door is certainly a great choice. You don’t necessarily have to paint your door with bright colors however, experts recommend bold colors as they add a lot of visual interest and they quickly catch the viewer’s attention.

Add light to your yard. Your home’s curb appeal doesn’t only exist during daylight. Even at night, you can still draw attention to your home by adding lights to your front porch, garden or yard. With the advent of solar lamps, this DIY project is certainly easy since you don’t need to worry anymore about the installation. Just purchase the right amount of lamps, place it on your outdoor area and viola, you have now boost your curb appeal.

Power washing. Sometimes, enhancing and beautifying your home needs only a little washing. You can use a power washer – buy or rent one, to wash and get rid of the dirt from your front porch, lawn, garage, driveway or siding. You’ll be surprised what it can do to your home.

Update your mailbox. Is your mailbox too old? Changing your dirty and old mailbox is easy and inexpensive provided that the stud is still reusable. Don’t underestimate how a simple mailbox can improve your home’s curb appeal.

Change your curtains. Although curtains are basically placed and seen within your home, they can still be seen from the outside. Therefore, they still play a part in enhancing your home’s curb appeal. In choosing curtains, be sure that they blend with your home’s color; if possible, stick with neutral colors.

Clean your yard. One of the first things people notice about your home is your yard. They’ll see immediately if it’s clean from any falling leaves, your grasses are trimmed, your plants are well maintained, or is free from weeds or sticks. To get the job done, you only need a few tools like a rake and a lawn mower and of course, manpower.

November 13, 2014

FHA Squeezing Mortgage Financing For Condominiums Even With High Demand

FHA Squeezing Mortgage Financing For Condominiums Even With High Demand

Based on the new real estate industry estimates, the demand for condominiums have increased in most urban areas across the country. However, a key federal agency is squeezing mortgage financing for entry-level condo buyers.

The list prices of condominiums have increased faster compared to single-family detached homes located in the same area. Sales of condominiums across the nation has steadily taken over the traditional homes’ market share as different homeowners downsize as part of their plans to live closer to their workplace and to the city’s top attractions.

However, financing barriers created by the federal government has made it more difficult for millennials and other first-time buyers to purchase entry-level condos. Just last month, the White House indicated that they want the government to loosen up on mortgage credit availability for middle-income Americans. However, the number of condominium projects continues to be severely restricted by the Federal Housing Administration. Aside from this, such restrictions also make it impossible for a lot of senior citizens who are condo owners to get reverse mortgages.

But even with such problems, Trulia reports that the asking price prices in the 20 largest condo markets continue to outrun the increasing prices of single-family homes. Plus, the condo’s selling prices remain to be below the prices for detached homes on average nationwide, making them a more affordable housing option.

According to Lawrence Yun, the Chief Economist for the National Association of Realtors, the market share of condos has remarkably increased from 8 percent to 11 percent and 12 percent. In fact, in some urban markets, the condo shares are significantly high. For instance, in Los Angeles, where condos account to 27% of the home resales, while 44.9% in Miami based on the data gathered by CoreLogic’s DataQuick.

However, a lot of housing experts believe that the main problem in the booming condo sector is the unnecessary blockage of entry points at the lower price ranges. The FHA who has always been the source of mortgage money for most first-time homebuyers will consider insuring mortgages in less than 7 percent of the estimated 150,000-plus condominium developments across the country.

FHA has also stopped approving spot loans in condominium projects that haven’t applied for or got a special participation, a process considered by the condo homeowner association boards as stressful and usually leads to rejection.

David Stevens, who was the FHA commissioner in 2010 when the so-called spot loans were banned now heads the Mortgage Bankers Association. He claims that it’s the right time to bring those back along with reasonable restrictions since most young first-time homebuyers use the FHA as their sole source of low-down-payment financing. Although FHA has dealt with a lot of condo foreclosure problems caused by the housing bust, Steven believes that ”that doesn’t mean you keep these restrictions on” when the crisis has abated, as at present.

Eric Boucher, chief operating officer of ReadySetLoan, a Connecticut based-national condo consulting firm said that the ban on spot loans have a significant impact on senior citizens who view reverse mortgage as an additional income. In a condo association meeting he recently attended with owners in their 80s, a lot of them described their inability to get a reverse mortgage solely because of FHA’s policy.

The FHA remains to be silent whether they have plans to loosen their certification restriction and allow spot loans to buyers and owners in uncertified developments that can meet the financial stability criteria. However, different sources claim that the agency is feeling the pressure from the real estate industry, the mortgage lobbies, and the Capitol Hill and that they are now planning a major condo proposal for 2015 that aims to bring back FHA financing to a lot of buyers and existing condo unit owners.

November 13, 2014

Consumer Confidence Increasing, Housing Market Attitudes Remain Varied

Consumer Confidence

Based on the recent survey conducted by Fannie Mae, the findings show that even with the increasing economic confidence, Americans still have a mixed housing sentiment in October.

The National Housing Survey by Fannie Mae showed that 40 percent of American consumers believe that the economy is currently on its right path, which is similar to September’s results but 13 percentage points up from last year. As for Americans who say otherwise about their economy, they’re not 53 percent from 54 percent last month.

With regards to their finances, 25 percent believe that their household income is higher than last year, while a rising share said their expenses are significantly lower. 45 percent believe that their financial situation will improve over the next year compared to 41 percent in September.

However, the housing attitudes of Americans were quite mixed with 44 percent of the Americans expecting home prices to increase by 2.8 percent next year after the price stagnated throughout the entire summer. As for those expecting the prices to reduce, their number has declined from 9 percent last August to 7 percent.

But the Americans respondents were quite pessimistic in terms on the financial side of homeownership. 48 percent expect the mortgage rates to increase in the next year with the Federal Reserve’s plans to increase interest rates.

Half of the consumers were also less hopeful about their chances of getting a mortgage as the banking community becomes resistant to opening the credit box.

With all of these factors considered, the number of Americans claiming that this is an excellent time to buy a home dropped to 65 percent. However, this is opposite to consumers claiming that its a good time to sell as their numbers hit 44 percent.

The latter findings is hopeful sign for the housing market according to Fannie Mae’s SVP and Chief Economist Doug Duncan. “The narrowing gap between home buying and home selling sentiment may foreshadow increased housing inventory levels and a better balance of housing supply and demand,” he said. “These results may help drive a healthier housing market in 2015.”

November 12, 2014

A Brief Guide On Home Warranty

A Brief Guide On Home Warranty

As a homeowner, you have to be prepared to face the common households problems – a faulty household appliance, a leaking faucet, or a short circuit. However, there are some problems we cannot resolve on our own and we need to seek the help of a professional who has more skills, knowledge and experience in dealing with such situations. This also means you have to pay them for their services. This is where a home warranty policy comes in handy. Haven’t heard of it? Better continue reading to learn more about it.

What is a home warranty?

A home warranty refers to a service contract that covers repairs and replacement of your appliances and other systems within your home. This should not be confused with homeowners insurance since the latter covers major perils like fires, hail, property crimes along with certain types of water damage that affects the entire structure of the house and the personal possessions of the homeowner. Home warranty, on the other hand, covers only specific components of the home.

How much does a home warranty costs?

The costs of a home warranty vary on the level of coverage that you purchase. However, the typical annual premium ranges from $250 to $500 along with a fee per service incident which usually costs $50 to $75. Luckily, home warranty companies sometimes offer special sales, discount policy prices, and/or additional coverage for the same price.

How does a home warranty work?

Although there are different plans that provide specific types of coverage, most policies work the same way. To start, the home appliance or system breaks down or stops working, hence, the homeowner calls the home warranty company. The company gets in touch with a service provider, which it has a business arrangement with and the specific provider contacts the homeowner to make an appointment. The provider will try to resolve the problem, however, if it’s unfixable, the company will pay to replace and install the appliance depending on the warranty coverage. The homeowner will also need to pay a trade service fee, which is usually less than $100.

What does a home warranty covers?

Home warranty plans are quite different but most of them cover things like major appliances (oven, refrigerator, dishwasher, microwave, washing machine) heating and cooling systems (air conditioners, heat pumps, furnaces), plumbing (faucets, swimming pools, sprinkler systems, indoor pipes and drains) and electrical systems (wiring, door bells, garage door openers).

Although a home warranty isn’t a perfect solution for the risks homeowners face, it’s still beneficial especially if you’re buying a home that comes with old components and appliances. Just be sure that before purchasing one, you thoroughly read the contract to determine whether the warranty is likely to pay off or not.

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