The real estate market continues to show improvement as mortgage rates remain at historic lows and consumers respond to the tax credits for first-time and repeat buyers. In fact, the National Association of Realtors (NAR) just announced that its Pending Home Sales Index rose 1 percent from November.

A forward-looking indicator based on contracts signed in December, the index is now 10 percent above December 2008. What’s more, December activity was the fifth highest monthly tally in two years. A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Because sales usually are finalized within one or two months of signing the contract, this improvement should result in higher home sales in the coming months.

According to Lawrence Yun, NAR chief economist, existing home sales are projected to rise to around 5.6 million in 2010, an 8.5 percent increase over 2009. As sales rise and inventory levels decline, housing wealth for many middle class families will stabilize.

Click here for more information about buying a home in today’s market. You can also attend a market update seminar in most Weichert sales offices on Saturday, Feb. 20, at 11 a.m. to learn why now is a good time to buy a home, even if you have one to sell.

Princeton Town Topics - February 3, 2010

WHAT’S THE MAGIC NUMBER? 

When you make an offer on a house your biggest decision is how much to offer.  You want to pay a fair price, and sometimes it is hard to predict how much is enough for the sellers.    

Some sellers price their homes at their bottom line and may be unwilling to negotiate, unless the house has been on the market for a long time.  Others build in a little room for negotiation.  Some sellers are more motivated than others to get their homes sold.  Whatever your situation, it is hard to know what sellers will do until they are presented with an offer.  If your bid is very low and the sellers have more attractive offers, they may just not respond.  If your original proposal is unacceptable, the seller will usually make a counter offer.  While sellers like to get their asking prices, good listing agents prepare them for the possibility of receiving offers that involve some compromises. 

Whether you’re ready to Plant & Buy, Bloom & Change or Grow & Sell, Contact Beatrice Bloom first! 

Real Estate Expert in Princeton, NJ

The Groundhog and Interest Rates

Tim McLaughlin                

For those of you that don’t know the world famous groundhog, Punxsutawney Phil is a resident of Punxsutawney, Pennsylvania. On February 2, (Groundhog Day) of each year, the town of Punxsutawney celebrates the beloved groundhog with a festive atmosphere of music and food. During the ceremony, which begins well before the winter sunrise, Phil emerges from his temporary home on Gobbler’s Knob, located in a rural area about 2 miles east of town. According to the tradition, if Phil sees his shadow and returns to his hole, the United States will have six more weeks of winter. If Phil does not see his shadow, spring will arrive early. The date of Phil’s prognostication is aptly known as Groundhog Day throughout the US.      

Last Tuesday morning, after Phil ran out, and then immediately back into his temporary home, Phil proclaimed (actually, Phil’s handler proclaimed), “If you want to know next, you must read my text. As the sky shines bright above me, my shadow I see beside me. So six more weeks of winter it will be.”    

Since 1887, Phil (who is now rumored to be over 120 years old) and the good people of Punxsutawney have been faithfully rising well before dawn each February 2^nd to determine the winter outcome for the country. However, of these 114 predictions on record over the years, Punxsutawney Phil’s accuracy has been called into question on many occasions. According to the StormFax Weather Almanac and records kept since 1887, Phil’s predictions have been correct just 39% of the time, a percentage lower than if one were to flip a coin to predict the outcome.     

What does that have to do with interest rates? I think the most obvious takeaway here is that I/we/the market is always being asked “what will interest rates do next”? While there is a lot of valuable data at our disposal to help us analyze and make a prediction, the reality is no one really knows for sure. Granted, our success rate is probably a tad better than Phil’s, but no one can guarantee with absolute certainty where/what rates will do next.    

However, this we can guarantee: rates are still at/near historical lows with high 4% - low 5% handles. And with rates that low, why ponder what rates will do next…capitalize now. Your Weichert Financial Gold Services Manager and Weichert Realtor can help you take advantage today. And there is no need to wait for the spring market. Given Phil’s charming (but alarmingly inaccurate) predictions, looks like spring is coming early this year (sans the pending blizzard this weekend), assuming his inaccuracy rating stays intact.

The Week Ahead -> The “Keys”         

-   Light week in terms of economic data releases    

Secondary Marketing Takeaways: Volatile morning with a mixed array of employment data. Nonfarm payroll did not go positive this month as most economists had hoped (down 20K vs. projected up 15K). December’s number was revised downward an additional 65K (85K to 150K), with Oct and Nov having significant downward revisions as well. However, the headline unemployment rate fell to 9.7% from 10.0%, which is perplexing to many. On one hand you still have negative job creation, and increasing weekly initial jobless claims. On the other hand the unemployment rate dropped 0.3%. Could there be a deeper disconnect in the number? Or could more and more people be running out of unemployment benefits, and be artificially excluded from the headline number. Regardless of the root cause, both fixed income and equity sectors are choppy and erratic on the news, flowing back and forth within defined trading ranges, until some sense and ordinance can be made from the data.

 Many buyers find a fireplace a plus when seeking to purchase a home, especially in colder climates where it can serve both an aesthetic and functional purpose. If your fireplace is outdated, it can attract a buyer’s attention, but not in the way you intend. If you are selling a home with a fireplace, it’s important to look at it with a critical eye to be sure it remains appealing to buyers.

Consider these ways to give your fireplace a makeover:

• While brick was traditionally used to surround a fireplace, many people are now using concrete, stone or marble.
• When deciding which type of material to choose, think about what will best complement the rest of your home. Marble would work well in a contemporary-style home, while a stone surround that extends up to the ceiling creates a rustic look.
• Once you’ve made your choice, take home a sample of the material you plan to use and let it sit next to your fireplace for a few days. This will allow you to see how it will look in different lighting as well as how it coordinates with the rest of the room.

Some people refer to the $6,500 tax credit for current homeowners as a “move-up buyer” tax credit. However, while many repeat buyers are using the opportunity to get into a larger home, buyers may also be eligible to claim the tax credit if they purchase a smaller, less expensive house.

Current homeowners looking to downsize as they become empty nesters or prepare for retirement can claim the $6,500 tax credit as long as they meet the income requirements and have lived in their home for at least five consecutive of the last eight years. In addition, the home that they are purchasing must cost $800,000 or less.

Weichert has a resource for homebuyers on its Web site that includes the most up-to-date information about the $6,500 tax credit. Click here or visit www.weichert.com to learn more about this once-in-a-lifetime opportunity.

Princeton Town Topics - January 27, 2010

THE 21^ST CENTURY REALTOR  

Realtors today are offering a wider range of personalized services to meet clients’ needs. They are investing in technological innovations that will help them do a better job of marketing listings, such as computer programs that help them price homes, keep track of buyers, develop plans of action, and organize their business.  Top Realtors set the trends that others emulate. 

Conventional real estate wisdom has always claimed that the three biggest influences on buyers are–location, location and location. Current trends show a shift toward value as regards both buyers and sellers.  Buyers are concerned about getting the best house for their money, while sellers want to get top dollar for their home–and both want the best service from their real estate professionals.  The Realtor’s emphasis over the last ten years has been on finding ways to increase the quality of their service in negotiating transactions. This means that it will only get better for the real estate consumer. 

Whether you’re ready to Plant & Buy, Bloom & Change or Grow & Sell, Contact Beatrice Bloom first! 

Real Estate Expert in Princeton, NJ

FHA Changes on the Horizon

Tim McLaughlin                

 Q: The FHA announced a lot of changes to their programs this week that seems like it may make it harder for individuals looking to get a mortgage. I have read the news clipping a couple of times, but want to make sure I am not missing anything. Can you cover this in your Market Monitor this week? Thanks     

A: On Wednesday, the Federal Housing Administration (FHA) announced that they would be coming out with more stringent lending requirements/higher borrower fees. The reason: to cushion against rising defaults and stave off a taxpayer bailout of the agency. There were a couple of key takeaways in the announcement, most notably:

·         Upfront Mortgage Insurance Premium: Currently, the UMIP (Upfront Mortgage Insurance Premium) on FHA loans is 1.75%. The US Department of HUD has announced that FHA will increase this fee by 50 bps; the new upfront mortgage insurance premium will be 2.25%. That will be effective with all loans submitted for an FHA case number beginning in April of 2010.

·         Reduce allowable seller concessions from 6% to 3%: This change will bring FHA into conformity with industry standards on seller concessions. The effective date is anticipated to be sometime in the beginning of the summer (TBD).

·         Increase enforcement on FHA lenders: The rules of engagement here are deep and thorough, however, they do not impact the borrowers directly; they have more of an indirect impact. Lenders will be under much more scrutiny, so, in turn, they will delve deeper into loans. They will require more documentation from borrowers and will look for more clarification for questionable items from borrowers, thus making the approval process a little more taxing.

·         What else is in store: There is a bill in the Senate proposing that the FHA minimum down payment be increased from its current 3.5% to 5%. However, this proposal may or may not get passed, so this is a down the road item.   

     So what are the takeaways for the borrower: As of today, there are none. These are April changes at the earliest, so now is the time to really take advantage of wider lending terms, affordable rates and home prices, and a tax credit to boot. Need assistance? Weichert Financial Services can help. Ask us how…we are here to help you!

The Week Ahead -> The “Keys”        

- Housing Data and the FOMC Meeting Headline    

Princeton Town Topics - January 20, 2010

WHEN IT’S A BUSINESS MOVE            

If you are relocating to another city for a new job, get professional advice from a Realtor and a tax expert.           

Your Realtor will work to market your current home, refer you to a top real estate professional in your new city and provide the names of good long-distance movers, so you can get competitive quotes from reliable firms.           

Your tax advisor will tell you exactly what moving expenses you can deduct on your income tax filing.  Publication 521 from the Internal Revenue Service (available on the Internet) can provide you with basic information regarding moving expense allowances.  Your tax advisor will also clarify for you the capital gains implications associated with the sale of your property, which could have an impact on what you can afford to spend on your new home.             

With the right information, and assisted by the right people, you will find that a business move can be orderly, simple and even enjoyable!

Whether you’re ready to Plant & Buy, Bloom & Change or Grow & Sell, Contact Beatrice Bloom first! 

Real Estate Expert in Princeton, NJ

 According to Remodeling magazine’s 2009-2010 “Cost vs. Value Report,” even despite the challenging economy, investing in your home still pays off at resale — and it doesn’t have to cost a lot. In fact, many of the home improvement projects that got the most bang for their buck were fairly inexpensive exterior projects.

Based on interviews with real estate professionals throughout the country, the Remodeling report found that certain types of door and siding replacements, as well as wood deck additions all returned more than 80 percent of project costs upon resale. A steel entry door replacement recouped 128.9 percent of costs.

The right remodeling project, when done well, also has the potential to make for a quicker sale and reduce negotiations with buyers over perceived shortcomings. However, there are other projects that don’t fare as well. According to the report, the least profitable remodeling projects were home office remodels (48.1 percent) and sunroom additions (50.7 percent).

Click here to access the “Cost vs. Value” Web site, where you can download data for 80 cities.

Princeton Town Topics - January 13, 2010

WILL CREDIT CARDS AFFECT YOUR LOAN? 

Making monthly payments on credit cards charged up to the limit can disqualify you for a home loan.  But what most people don’t know is that merely having a large number of credit cards, even with low balances and a history of timely payments can also disqualify you for a home mortgage loan.  According to credit experts, having a number of credit cards can be just as detrimental to the granting of further credit as a history of late payments.  Lenders look at it this way:  If you have ten credit cards, each with a limit of $5,000, that means you have the potential to run up $50,000 in debt virtually any time you choose.  That mere possibility makes you a greater risk, from their point of view. 

What’s the moral of this story?  If you are planning to apply for a home loan in the future, keep only those credit cards you actually need to use and cancel the others.  

Whether you’re ready to Plant & Buy, Bloom & Change or Grow & Sell, Contact Beatrice Bloom first! 

Real Estate Expert in Princeton, NJ