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Home Sales During Housing Bust Worse Than Thought

 

" Existing home sales during the housing bust were actually 14.3% worse than previously reported, a revision to Realtors' group numbers shows.

On Wednesday, the National Association of Realtors (NAR) revised home sale counts back to 2007 due to flaws in their original data analysis. 

In 2007, there were actually just 5.04 million existing home sales, 11% less than the 5.65 million originally reported. Even worse were 2008 and 2009, when there were 16% fewer sales than originally reported. Sales in 2010 were 15% lower.

"The errors started in 2007 and continued to accumulate over time," said Lawrence Yun, NAR's chief economist.

The accuracy of the data is important. Private companies like residential real estate developers rely on it for planning and policy makers make decisions based on it. 

HOME BUILDING SPIKES HIGHER

The data is "key to the economic outlook," said Mark Zandi of Moody's Analytics, "and the revisions help to explain the severity of the housing crash."

David Crowe, chief economist for the National Association of Home Builders, said its members use existing home sales as reported by NAR as a gauge of the overall health of the housing market." [Continue reading...]

Mortgage Rates Fall to Record Lows

 

"Mortgage rates sunk to record lows again this week.

The average rate on the 30-year fixed mortgage fell to 3.94%, matching the all-time low hit in early October, according to Freddie Mac's weekly mortgage rate survey. Meanwhile, 15-year fixed-rate loans hit a new record low of 3.21%, surpassing the record set on October 6. 

Five-year adjustable rate mortgages also plumbed new depths, hitting 2.86% for the week.

"We've been hanging around record lows for a few months now and we finally hit another one," said Keith Gumbinger of HSH Associates, a provider of mortgage data.

Low-interest mortgages will be available at least through mid-2012, according to Freddie Mac's chief economist, Frank Nothaft.

Where homes are affordable

The low rates can translate into big savings for home buyers. Five years ago, a home buyer would have been lucky to land a 5% rate on a 15-year loan. On a $200,000 mortgage, that would have meant the borrower would have paid $1,582 a month. Should a borrower land a 3.2% rate on a $200,000 loan now, the monthly mortgage payment would come to $1,400 -- a savings of $182 a month." [Continue reading...]

Tips for Buying a House

"1. Don't buy if you can't stay put.

If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner - even in a rising market. When prices are falling, it's an even worse proposition.

2. Start by shoring up your credit.

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

4. If you can't put down the usual 20 percent, you may still qualify for a loan.

There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.

5. Buy in a district with good schools.

In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.

6. Get professional help.

Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process." [Continue reading...]

More Student Debt, Fewer Homeowners

"FinAid's Student Loan Debt Clock is just as alarming, in its way, as those clocks that relentlessly tick up the national debt.

The FinAid clock is fast approaching $1 trillion, ratcheting up at the pace of nearly $3,000 per second.Americans owe more on student loans than they do on their credit cards, a switchover that happened last year.

Consider that the amount you can borrow to buy a home depends not only on how much you earn but also how much debt you already have, and you can see what the student-loan boom has to do with the housing market. 

Rick Palacios Jr., senior research analyst at John Burns Real Estate Consulting, wrote recently that homebuilders should beware.

"Faced with mounting student loan debt, poor job prospects and stagnant wages, an increasing amount of 25 to 34 year olds (a prized demographic for the housing sector) have moved back in with their parents," he wrote.

According to Palacios, the number of adults in that age bracket living with parents is up 26 percent since the Great Recession started in late 2007. They're now nearly 6 million strong." [Continue reading...]

Existing Home Sales Report

"Existing U.S. home sales edged up in October, according to the National Association of Realtors, even as mortgage credit continued to be tight.

Total existing home sales increased by 1.4 percent to a seasonally adjusted annual rate of 4.97 million units from a downwardly revised 4.90 million in September. Yearly sales are up as well, by 13.5 percent.

Sales have been tempered by several factors, said NAR chief economist Lawrence Yun. "Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions. Many people who are attempting to buy homes are thwarted in the process," he said.

"In some areas we're hearing about shortages of foreclosure inventory in the lower price ranges with multiple bidding on the more desirable properties," Yun added." Realtors in such areas are calling for a faster process of getting foreclosure inventory into the market because they have ready buyers. In addition, extending credit to responsible investors would help to absorb inventory at an even faster pace, which would go a long way toward restoring market balance."

The national median home price fell once again, declining to $162,500 in October from $165,800 in September. Compared to last year, prices are down 4.7 percent." [Continue reading...]

New-Home Sales Edge Higher

"New-home sales edged slightly higher last month, as more Americans hunted for bargains in the struggling housing market.

                                                                                                                                                                   The Census Bureau reported an annual sales rate of 307,000 new homes last month, up 1.3% from a downwardly revised rate of 303,000 homes in September. Compared to new home sales a year ago, October sales were up 8.9%. 

The 307,000 rate fell just short of expectations. Economists had forecast a sales rate of 312,000 new homes, according to consensus estimates from Briefing.com.

While the higher rate in October indicated that consumers are chipping away at the huge inventory of homes on the market, there's still a long way to go.

There were about 162,000 new homes on the market by the end of October. That represented a 6.3-month supply at the current rate of sale. The median sale price was $212,300. 

Last week, a separate report showed that more house-hunters are also eyeing previously owned homes. Sales of existing homes rose 1.4% in October, slightly more than economists had expected, according to the report." [Continue reading...]

Winterizing Your Home

1) Furnace Inspection

• Call an HVAC professional to inspect your furnace and clean ducts.
• Stock up on furnace filters and change them monthly.
• Consider switching out your thermostat for a programmable thermostat.
• If your home is heated by a hot-water radiator, bleed the valves by opening them slightly and when water appears, close them.
• Remove all flammable material from the area surrounding your furnace.

2) Get the Fireplace Ready

• Cap or screen the top of the chimney to keep out rodents and birds.
• If the chimney hasn't been cleaned for a while, call a chimney sweep to remove soot and creosote.
• Buy firewood or chop wood. Store it in a dry place away from the exterior of your home.
• Inspect the fireplace damper for proper opening and closing.
• Check the mortar between bricks and tuckpoint, if necessary.

3) Check the Exterior, Doors and Windows

• Inspect exterior for crevice cracks and exposed entry points around pipes; seal them.
• Use weatherstripping around doors to prevent cold air from entering the home and caulk windows.
• Replace cracked glass in windows and, if you end up replacing the entire window, prime and paint exposed wood.
• If your home has a basement, consider protecting its window wells by covering them with plastic shields.
• Switch out summer screens with glass replacements from storage. If you have storm windows, install them.

4) Inspect Roof, Gutters & Downspouts

• If your weather temperature will fall below 32 degrees in the winter, adding extra insulation to the attic will prevent warm air from creeping to your roof and causing ice dams.
• Check flashing to ensure water cannot enter the home.
• Replace worn roof shingles or tiles.
• Clean out the gutters and use a hose to spray water down the downspouts to clear away debris.
• Consider installing leaf guards on the gutters or extensions on the downspouts to direct water away from the home.

5) Service Weather-Specific Equipment

• Drain gas from lawnmowers.
• Service or tune-up snow blowers.
• Replace worn rakes and snow shovels.
• Clean, dry and store summer gardening equipment.
• Sharpen ice choppers and buy bags of ice-melt / sand. 

[Continue reading...]

Realty Bill May Open New Doors to Transparent, Secure Home Buying

"For many, buying a residential property is the biggest investment they make in their lifetime. Last week, the government released for public comments a draft Real Estate Regulation Bill, which is said to be on its way to becoming a law in the winter session of Parliament. As such, this is a step towards bringing some semblance of consumer protection to the decidedly anti-consumer practices of the real-estate industry. 

However, this news did give me a strong feeling of deja vu. When I googled the phrase 'India real estate regulatory bill', I came across a newspaper article from 2006 saying that a real estate regulatory bill was expected to be passed in the 2006 winter session of Parliament. 

I also came across another article from 2008 that said a real estate regulatory bill was expected to be passed in the 2008 winter session of Parliament. Not just that, I also also came across a draft of a model bill dated September 2009 with a covering letter from a government official attached. 

The letter said that the bill should be put up on the web by November 9, 2009, and comments invited from the public. So, I wouldn't keep my fingers crossed too hard. 

Nonetheless, if and when this bill does become a law, it will be a huge improvement for house-buyers in India. Many, if not most, of the problems associated with buying a house at every step could be solved substantially. 

For example, right at the beginning of the process, buyers face the problem of getting trustworthy information about the identity of the promoter and basic facts regarding the legal and approval status of the land and the project concerned. " [Continue reading...]