Blog • June 29, 2012

Record low mortgage rates

by Dustin Keeth

The latest Freddie Mac report shows all-time low mortgage rates, reports the Los Angeles Times. Lenders were offering 30-year fixed loans to credit-worthy buyers at 3.66% and the 15-year fixed mortgage at 2.94%, on average. Here are the specific figures for the week ending June 28, 2012.

30-year fixed-rate mortgage (FRM) averaged 3.66% with an average 0.7 point. (Last year’s 30-year FRM averaged 4.51%.)
15-year FRM averaged 2.94% with an average 0.7 point, down from last week when it averaged 2.95%. (Last year’s FRM averaged 3.69%.)
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79% this week, with an average 0.6 point, up from last week when it averaged 2.77. (Last year’s 5-year ARM averaged 3.22%.)
1-year Treasury-indexed ARM averaged 2.74% this week with an average 0.4 point, the same as last week. (1-year ARM averaged 2.97% one year ago.)

Foreclosures were also down by 2% in the first quarter of this year as compared to the previous quarter, according to the Office of the Comptroller of the Currency. Year-over-year, the rate fell by 8%. Overall, about 4.5% of all home loans were 60 days or more behind on payments, said the OCC, which is 10% lower than the previous quarter and 6% from one year ago.

Declining interest rates coupled with lower prices may encourage borrowers to purchase homes now rather than later, when the market begins to support higher sales prices. The National Association of Realtors expects the median existing-home price to rise 3% this year and another 5.7% in 2013.

Blog • June 28, 2012

U.S. housing is looking up

by Dustin Keeth

The latest housing data indicates that the U.S. market is well into healing.

The number of pending home sales rose in May by 5.9 percent to 101.1 from 95.5 in April, according to the National Association of Realtors. The Pending Home Sales Index is a forward-looking indicator based on contract signings, and a number above 100 is considered indicative of a healthy market.
Completed sales of previously occupied homes fell slightly in May but year-over-year figures have jumped 9.6 percent.
Sales of new homes went up 7.6 percent in May from April.
Home prices rose in April from March in 19 of the 20 cities measured by the Standard & Poor’s/Case-Schiller home price index.
Construction of single-family homes in May went up for a third consecutive month.
And last but certainly not least, the average mortgage rate on a 30-year fixed loan fell to 3.66 percent, the lowest since long-term mortgages began in the 19050s.

Lawrence Yun, chief economist with the National Association of Realtors, shares his view on the trends. “The housing market is clearly superior this year compared with the past four years. The latest increase in home contract signings marks 13 consecutive months of year-over-year gains.”

Blog • June 22, 2012

Seattle’s condo market is simmering

by Dustin Keeth

The Seattle condo market is making a comeback, reports the Seattle Times. Among the 2,500 new condos built by developers throughout downtown, Belltown, Lower Queen Anne and South Lake Union, only 250 remain on the market, according to county records. Escala, downtown’s largest condo project with 31 stories, has sold most units for 99 percent of asking price. The current climate is a far cry from the years between 2007 and 2010, when two dozen condominium projects stalled as pre-sale buyers backed out of deals in droves.

In some areas, prices have actually gone up, which is a sign of a healthy market according to researcher Glenn Crellin of the University of Washington’s Runstad Center for Real Estate Studie. Bellevue Towers and Escala in Seattle raised the prices of some units by 1 to 2 percent. Overall, the new-condo inventory has been steadily shrinking, and buyers who have kept a watchful eye on the market now feel confident enough to make their purchases.

May’s sales numbers show increases in median prices, pending sales transactions, and the number of closings, reports the Seattle Post Intelligencer. The median condo sales price in Seattle has increased to $268,500, which reflects a one-month increase of 3.3% and a year-over-year improvement of 7.4%. Downtown and Belltown registered an increase of 11.9% and Capitol Hill saw a rise of 7.1%, though West Seattle and Northeast Seattle experienced year-over-year declines.

Dean Jones, brokerage Realogics Sotheby’s president and CEO, notes that there’s not a lot of new inventory coming down the condo pipeline, which means that demand may outpace supply in the very near future.

Blog • Listings • June 19, 2012

Going through the back door

by Dustin Keeth

Pocket or “off-market” listings are quietly for sale but excluded from the Multiple Listing Service (MLS). In the past, they were commonplace with high-profile homes. Today, the method is becoming increasingly popular with other types of properties, according to Fox Business.

A true pocket listing is one where a homeowner and an agent have agreed that the agent will bring potential buyers to view the home but not list it on the local MLS, according to Inman News blogger Mary Umberger. Sellers have various motivations for initiating a pocket listing, explains David Blockhus, a realtor in Los Altos, Calif., who says that it makes sense for a small minority of sellers. The following scenarios may benefit from quiet marketing:

High-end or high-profile celebrity homes that rely on an already narrow pool of buyers and the networking of agents
Homes owned by sellers who prioritize privacy above all
Properties that carry baggage or negative history
Sellers who want to test the market and avoid a “stale listing” on the MLS

In some markets, well-established real estate agents devote considerable time to networking with colleagues and potential buyers, so much so that these pocket listings can represent a secondary market. Sellers should do their research and understand that offline marketing automatically narrows the number of potential buyers. Consulting with area experts may help homeowners determine if a pocket listing is right for them.

Blog • June 15, 2012

Vacation steals

by Dustin Keeth

Some buyers are getting vacation homes on the cheap, reports CNN Money. Not all destination properties are created equal, however, so buyers should size up their purchases before taking the plunge.

Ask your local realtor about the supply of available homes now as compared to 6 months prior. If the inventory is shrinking, you might expect home prices to start inching up.
Study the Bureau of Labor Statistics for job growth numbers in the local area. Labor markets can affect home prices in vacation destinations.
HomeAway estimates that the average vacation property rents for 19 weeks in a year. Be sure to check the home’s rental history, including dates and rates.
Properties with nearby tourist attractions typically secure higher rental rates.
Calculate all expenses — mortgage, property taxes, insurance, homeowner association dues, utilities, maintenance, and marketing or management of the property.

Buyers who are looking for a vacation house and have the financial backing to weather the ups and downs of the rental market can start looking today at HomeAway or by speaking to realtors in local markets.

Blog • June 12, 2012

Americans are moving to Seattle, Bellevue, and Everett

by Dustin Keeth

The Seattle-Bellevue-Everett area ranks No. 4 on Yahoo Real Estate’s hot metro areas for relocation. The number of inbound shipments from January to March of 2012, tracked by the American Moving and Storage Association, indicates that individuals and families are moving to the Emerald State in high numbers.

“Seattle’s economy is based on innovation, and information technology is an enormous industry in Seattle,” according to Yahoo. Tech companies and firms that rely heavily on information technology for their operations continue to grow, increasing their labor force numbers. And of course Boeing’s Everett headquarters still produces aircraft for the rest of the world.

Here are the top 10 metro areas for relocation in the first quarter of 2012.

Washington, D.C.
Phoenix-Mesa
Houston
Seattle-Bellevue-Everett
Atlanta
Dallas-Forth Worth
San Diego
Denver
Los Angeles-Long Beach
Chicago

Blog • June 8, 2012

Borrowers want shorter loan terms

by Dustin Keeth

About 31 percent of all those who refinanced in the first quarter of this year cut their mortgage terms from 30 years to 15 or 20, according to Freddie Mac, reports the New York Times. This marks the second highest level since 2002′s peak of 35 percent.

Low interest rates and an average of three-quarters of a percentage point difference between 15- and 30-year mortgages have motivated homeowners to refinance. Although shorter term mortgages can sometimes mean higher monthly payments, they enable borrowers to build equity at a faster rate.

USA Today suggests that not all borrowers should move to refinancing at shorter loan terms. Considering other financial goals is key:

Pay off other debts, especially credit cards, that carry higher interest rates.
Fully fund retirement accounts.
Forecast the future by ensuring adequate monthly income to maintain a desired lifestyle.
Calculate the costs of refinancing, which are typically 3% to 6% of the loan principal. Some borrowers choose to pay the fees upfront, while others fold them into the loan amount.

Those who benefit from choosing a 30-year term can still reduce their principal by making one extra mortgage payment each year (a 30-year loan is thereby reduced to a 23-year loan) or by paying down the principal upon refinancing to a lower interest rate. Mortgage professionals can help borrowers determine what makes best sense for them.

Blog • June 4, 2012

More homeowners want automated technology

by Dustin Keeth

More homeowners are opting to install automated technology systems in their houses today than in years past, based on the State of the Builder Technology Market Study. Energy solutions and entertainment systems are among the most popular upgrades for new construction.

Energy-management solutions (e.g. automated lighting controls) – installed in 12% of new homes
Multi-room audio systems – installed in 23%
Home theatre – installed in 29%

The study indicates two key trends. Buyers seek energy-efficient homes that will save them money in the long-term. Second, they value multi-point access to entertainment throughout their domiciles.

Steve Koenig, director of industry analysis at the Consumer Electronics Association, says that the study confirms CEA’s conviction that “home technology [will] make a positive contribution to the inevitable housing market recovery as home buyers’ digital lifestyles and desires for energy efficiency factor into purchasing decisions.”

Blog • June 1, 2012

Should homeowners go organic on their lawns?

by Dustin Keeth

Many homeowners are more environmentally conscious today than ever before, but some are reluctant to buy organic products for the lawn, doubting their effectiveness. Howdini.com talks with expert gardener Scott Meyers, who debunks the myth that natural products won’t produce a robust lawn. Meyers also offers some key maintenance tips.

http://youtu.be/4xyRtbBie6U

Blog • Uncategorized • May 30, 2012

Real estate on the radio

by Dustin Keeth

The Seattle metro area welcomes a new radio show to its airwaves. “Real Estate Radio Northwest,” co-hosted by Carolyn Frame and Nick Neal, premiered on Money Radio 1300 AM KKOL on May 5th and will air Saturdays from 2 – 3 p.m. PT. Frame and Neal intend to discuss the industry in general, zooming in on the topics of buying and refinancing.

Neal promises that he and co-host Frame will highlight the happenings beyond the statistics and trends. “We’ll focus on real estate purchasing, refinancing and investing. We’ll be sharing real life stories and opportunities in today’s Northwest real estate market. With over 50 years experience between us, we have lots of good stories and advice people will hopefully find valuable.”

Industry pros, homeowners, and future buyers and sellers can also tune in to these sources of real estate news:

Real Estate Radio 1150 AM KKNW airs Thursdays, 3 – 5 p.m. PT — the program invites real estate, mortgage, legal, appraisal, and other housing professionals on the show to offer their market expertise for buyers and sellers.
The Real Estate Guys™ available at realestateguysradio.com — podcasts provide news, training, and resources for real estate investors.