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Home Prices Expected to Rise at least 3.3 Percent Annually though 2017 | Pound Ridge Homes

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Home Prices Expected to Rise at least 3.3 Percent Annually though 2017

The housing recovery is expected to grow at an annualized rate 0.6 percent through the third quarter of this year, then gain momentum and prices are projected to grow 3.7 percent between the third quarters of 2013 and  2014 until settling down to 3.3 percent annual increases  over the next three years according to Fiserv, a financial services technology provider using data from the Federal Housing Finance Agency (FHFA).

Both home prices and home sales volumes increased steadily last year, making 2012 the first positive year for both prices and sales since the housing market crash, excluding gains induced by the home buyer tax credits in 2009 and 2010.

“Although some recent real estate activity has been speculative, it seems as if buyers have more realistic expectations about housing market returns after having lived through the largest housing market crash in U.S. history”

“2012 was the first year since 1997 that the housing market has resembled something recognizable as normal. For the past 15 years, home price changes and sales volumes have either been boosted by a bubble mentality or crushed by crash psychology,” said David Stiff, chief economist, Fiserv. “Back in 1997, housing prices grew 3 percent, just below the 5 percent long-term average rate of appreciation. From 1998 to 2006, prices appreciated at levels above 5 percent, with double-digit price increases in many of those years. Then, after 2006, the market collapsed as euphoria turned to panic. It took until the end of 2011 before housing markets finally started to stabilize. The latest Case-Shiller results show a return to a historically normal pace of price appreciation in the last year.”

The recovery in home prices has been solid and broad-based. At the end of the 2012 third quarter, prices were rising in approximately 62 percent of all U.S. metro areas, compared to 12.5 percent in the same period a year ago. Average U.S. home prices increased 3.6 percent from the third quarter of 2011 to the comparable period of 2012. Many of the metro areas that suffered the most severe declines during the housing market crash enjoyed the highest price increases in that period.

Fiserv Case-Shiller projects that by the end of 2013, home prices will be rising in nearly every metro area in the U.S. Some markets may experience short-term double-digit price jumps that could be partially reversed by price declines as large tranches of bank-owned inventory (REO) are liquidated. In other markets, price appreciation will slowly return to normal rates as home buyers regain confidence that the market has found its footing.

Stiff cautioned that the parallels to previous years should not be overstated. Unlike in 1997, there are millions of homes with delinquent mortgages, in the foreclosure process, or in REO inventories listed for sale or waiting to be sold. But many trends are positive. With both prices and mortgage payments at historic lows relative to income, Fiserv Case-Shiller expects stronger demand for housing, and the sector once again having a positive impact on the economy.

“The number of new housing units being built per household is near a record low. As momentum in the housing market builds, we will see the residential real estate sector once again make large contributions to the economic recovery. If residential investment – which encompasses all direct spending on residential real estate construction and activity – returns to its 1997 level over the next two years, then housing will boost overall economic growth by 0.5 percentage points in 2013 and 2014,” Stiff continued.

“In all of the bubble-crash markets, foreclosures will have a persistent but diminishing drag on price appreciation. Since the timing of the disposition of foreclosed properties can be highly uncertain, we will witness choppy price movements as individual metro markets stabilize. For example, in late 2011, prices in Atlanta dropped sharply because of a substantial jump in REO sales, and it is possible that we will see similar, temporary price declines in other markets as subsiding waves of foreclosed properties buffet these markets. In other markets, investor demand is quickly absorbing listed REO properties, and as a result, foreclosures are no longer pulling home prices downward,” Stiff said/

The Fiserv Case-Shiller Indexes, which include data covering thousands of zip codes, counties, metro areas and state markets, are owned and generated by Fiserv. The historical and forecast home price trend information in this report is calculated with the Fiserv proprietary Case-Shiller indexes, supplemented with data from the FHFA. The historical home price trends highlighted in this release are for the 12-month period that ended September 30, 2012. One-year forecasts are for the 12 months ending on September 30, 2013. The Fiserv Case-Shiller home price forecasts are produced by Fiserv and Moody’s Analytics.

via realestateeconomywatch.com

Pound Ridge Homes | Fannie and Freddie have a Florida Problem

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Despite falling delinquency rates among lenders as a whole, delinquencies increased for Fannie Mae and Freddie Mac borrowers, especially in Florida. Coincidentally, CoreLogic announced today Florida leads the nation in the size of its foreclosure inventory.

The Federal Housing Finance Administration reported today that the percentage of loans held by Fannie and Freddie missing one or two monthly payments increased in the third quarter and a substantial number of the GSEs’ delinquent borrowers have missed more than one year of mortgage payments. Some 2.08 percent of Fannie and Freddie’s total borrowers were 30-59 days delinquent at the end of the third quarter, compared to 1.99 percent at the end of the second quarter.

Some 3.39 percent of Fannie and Freddie borrowers are seriously delinquent. Approximately 29 percent of borrowers delinquent a year or more are located in Florida.

In fairness, the GSEs are not only lenders to have problems with Florida, which is leading every list for delinquencies and foreclosures. CoreLogic announced today that at the end of November Florida leads the nation among states with the highest foreclosure inventory as a percentage of all mortgaged homes: Florida (10.4 percent), New Jersey (7.3 percent), New York (5.1 percent), Nevada (4.7 percent) and Illinois (4.7 percent).

At the end of the third quarter, the same time period reported by FHFA, all lenders reported a sudden and surprising upswing in delinquencies. :Lender Processing Services’ September Mortgage Monitor reported delinquencies were up 7.7 percent from August, representing the largest monthly increase since 2008.

“September’s increase in the delinquency rate was indeed significant, but the overall trend is still one of improvement,” Blecher said. “Despite the monthly jump, delinquencies are down 30 percent from their January 2010 peak, and our analysis revealed some interesting factors related to the spike. Of course, one month’s data does not indicate a trend. We will be monitoring these factors over the coming months to see how the situation develops.”

Guess where delinquencies were highest? Florida led the nation with 12.7 percent of its mortgages in foreclosure and 20.8 percent-one in five-of its mortgages is delinquent.

via realestateeconomywatch.com

About 43% of Americans expect home prices to rise | Pound Ridge NY Real Estate

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The share of surveyed Americans who believe home prices will tick up in the next year reached the highest level to-date, at 43%, up 6 percentage points from November, according to Fannie Mae‘s December National Housing Survey results.

The Fannie Mae National Housing Survey polled 1,002 Americans to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances and overall consumer confidence.

Consumer confidence in the housing industry continued its upswing as home prices, rental prices and mortgage rate expectations increased in November.

Thus, the growing confidence that housing indicators will continue well into 2013 is expected to boost home price activity during the year.

“Combined with consumers’ growing mortgage rate and rental price increase expectations, the positive home price outlook could incentivize those waiting on the sidelines of the housing market to buy a home sooner rather than later and thus support continued housing acceleration,” said Doug Duncan, senior vice president and chief economist of Fannie Mae.

The average 12-month home price change expectation rose to 2.6%, the highest level since the survey’s inception in 2010.

The percentage of those surveyed that believe mortgage rates will rise continued to increase, rising 2 percentage points to 43%, the highest level recorded since August 2011.

About 21% of respondents suggest it’s a good time to sell, down two percentage points from last month’s record high. However, this is still a 10-percentage point increase year-over-year.

The 12-month rental price expectation hit the highest level since the survey’s inception in 2010, at 4.4%, up 0.4% from last month.

About 49% of those surveyed said home rental prices will go up in the next year. Also, the share of respondents who said they would buy if they were to move declined slightly to 66%.

However, consumer outlook toward the economy and personal finances due to the fiscal cliff and debt ceiling caused volatility in perceptions of the larger economy.

“This uncertainty seems to be prompting a growing share of consumers to expect their personal finances to worsen and may contribute to weaker near-term economic growth,” Duncan said.

Those who expect their personal finances to worsen over the next year increased to 20%, the highest level since August 2011.

About 37% reported higher household expenses compared to last year, a 3-percentage point increase from last month and the highest level since December 2011.

via housingwire.com

Should lockboxes be mandatory? | Pound Ridge NY Real Estate

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Lockbox image via SentriLock LLCLockbox image via SentriLock LLC

The National Association of Realtors is considering whether multiple listing services and Realtor associations will be allowed to require that their members pay for some services that are now considered optional, such as lockboxes.

At least three MLSs have notified NAR of their desire to require all of their subscribers to pay for lockbox services, citing security issues when members don’t use the devices, and potential cost savings from universal member participation.

A policy adopted by NAR in 1996 to curb potential abuses of authority by MLSs and local Realtor associations limits the services that can be included in member dues. Products and services are defined as either “core,” “basic” or “optional.”

Dan Coffey, broker-owner of RE/MAX Harbor Country and Shore Realty Inc., said many MLSs already require members to pay for lockbox services.

“The train has left the station,” Coffey told members of NAR’s Multiple Listing Issues and Policies Committee. “Just about every MLS is already doing this — I don’t think they read the (rule) book.”

Coffey — a former president of the Michigan Association of Realtors — belongs to the Southwestern Michigan Association of Realtors, the first to raise the issue with NAR.

Although only three MLSs have officially weighed in with NAR in favor of such a change, “there are many more than three associations that support this move to make lockboxes a basic service,” said Dale Zahn, CEO of the West Michigan Lakeshore Association of Realtors..

Categorizing lockboxes as a “basic” service and requiring that all MLS subscribers pay for them facilitates cooperation between members and provides better security for home sellers, proponents say.

House keys kept in real estate offices can be copied, and combinations shared. Electronic lockboxes can be used only by MLS and association members, reducing the likelihood of unauthorized entries.

“It’s the local association’s choice to do what it wants to do — to provide the package that it thinks members like,” Zahn added. If members don’t like it, “they can find another association … it’s board of choice.”

But Jim Haisler, CEO of the Crystal Lake, Ill.-based Heartland Realtor Organization, worried that large regional MLSs might adopt policies that not all of the associations they serve would agree with.

“I’m part of a large regional (MLS) serving 11 associations,” Haisler said, referring to Lisle, Ill.-based Midwest Real Estate Data LLC (MRED), one of the nation’s largest MLSs. “I’m worried our MLS might be dictating to the 11 associations, (and) have some sort of governance over the associations.”

Cathy Libby, operations manager of Maine’s statewide MLS, Maine Real Estate Information System Inc., suggested that if NAR is considering whether to allow MLSs and associations to classify lockboxes as required services, it should also review whether other recent innovations like transaction management software, e-signatures and agent websites could also be classified as basic, required services.

Rather than recommend policy changes on lockboxes alone to NAR’s board of directors, the committee adopted a motion Saturday to review whether more sweeping changes to the 1996 policy statement are warranted.

The committee informed the board of directors that MLS Policy Statement 7.57, “Categorization of MLS Services, Information and Products,” will be “reviewed and revised, taking into account changes in technology and the real estate business” since the policy was adopted in 1996.

“Integral to this process will be consideration of whether, and how, the costs of providing lockbox equipment to MLS participants and subscribers (where lockboxes are an activity of MLSs) or to association members (where lockboxes are an activity of associations of Realtors) can be included in whole or in part in MLS dues and fees, or in Realtor dues,” the committee said in a report to the board Monday. “This analysis will also take into account the existing prohibition in the NAR bylaws on including the costs of property optional services in association dues.”

Last year, NAR boosted its majority stake in SentriLock LLC, a lockbox company that had about a 20 percent share of the market at the time, becoming sole owner of the company.

NAR’s staff liaison to the Multiple Listing Issues and Policies Committee, Cliff Niersbach, said that the lockbox issue presents a good opportunity to take a look at other services, and find “the best way to balance MLSs’ financial well-being with the rights of participants to decide what they really need to best serve their customers.”

via inman.com

3 Steps When the Appraisal Comes in Low | Pound Ridge NY Real Estate

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Whether you are buying or selling, waiting for an appraisal to come back can be a nerve-racking process, especially in an economy where home values are not what they used to be, despite the perceived value of a home. Because there are great deals out there and prices are increasing, buyers and sellers need to make quick decisions when the appraisal doesn’t make the cut, and it’s important to be prepared in advance for this scenario.

With this in mind, here are the three main steps to take when the appraisal comes in low:

Read the report for accuracy

Appraisal reports can be long, complicated documents, but they can be very revealing if you take the time to read them thoroughly. Make a note of anything that looks off, and verify that the information is correct, not only for the property itself but also for the comparables. Confirm that ALL comps are accounted for — some may not be listed on the MLS, and your real estate agent will have to research. Your agent will work with the buyer’s mortgage professional to ensure the information is relayed to the appraiser.

While there is no guarantee that the report will change, it certainly helps to clarify any errors and understand why an appraisal came in low. Appraisals also point out if there are any secrets lurking within the property’s walls, such as unpermitted additions that add square footage but cannot contribute toward the property’s value. For this reason it’s important that sellers are honest and upfront from the beginning and that buyers do their research before making an offer.

Renegotiate

Just because the appraisal is low doesn’t mean the sale will not close. However, in a low-inventory market, sellers may not want to conduct a second appraisal, which means that buyers and sellers have to decide if they want to work together to seal the deal — whether the seller adjusts the price to the appraised value or the buyer and seller renegotiate a new price. You’ve worked together this far, and it may have taken you both some time to get to this point. Keep in mind that you both have something to lose by not moving forward after investing time and money in the purchase. If a compromise can be made, it most likely will be. On the flip side, if the property is in demand, the seller may opt out of negotiating down as they may want to take a chance on someone else paying the difference or having a cash buyer.

Show them the money

While adjusting the price up or down may not feel good for the buyer or the seller, it may be the smart move, depending on your situation. For buyers, if the long-term value is there and the home is the “love of your life,” it will truly benefit you in the end. For sellers, if you need to make the sale and are running out of time, a compromise may be essential. Buyers may also have to spend even more because a decrease in equity could cause you to fall below the lender’s required down-payment threshold, requiring the purchase of private mortgage insurance.

The main question to ask yourself … is it really worth it?

via zillow.com

3 things to consider before starting a remodel | Pound Ridge Realtor

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Q: I am contemplating remodeling my kitchen and was thinking of perhaps including the formal dining room space by opening a wall between the kitchen and dining room. Have you done any research or know of any completed on the significance of doing away with formal dining rooms and its effect on resale value?

I know that a lot of newer homes are being built without formal living rooms, as these are not being used as a part of the new family/social dynamics.

A: I think you’re smart to consider the issue of resale value as you embark on a home remodeling journey, especially one that might impact the floor plan in the way your envisioned kitchen open-up will.

Remodeling ROI is tough to prove

In terms of the data, studies shows that there aren’t many remodeling projects that truly create major return on investment (ROI) for homeowners, in terms of actually generating a “profit,” so to speak. That said, it’s tough to account for the value of some home upgrades.

For instance, if your kitchen is very out of date and the nearby homes have new kitchens, your home might sell at a discount — or not at all — compared to neighboring listings unless you have remodeled it prior to listing it for sale.

Further, the kitchen and bathroom remodels that buyers love can be pricey to pull off, also making it difficult to show a financial upside to them in hard numbers. I can tell you from my experience that losing a formal dining room, if done in trade for an upgraded, open kitchen with an island and space for a large, holiday dinner-style table, does not have the same impact of depreciating a home that, say, knocking down a wall between two small bedrooms might have.

Talk to your agent about what local buyers prefer

Just because you can’t prove that you’ll make your money back and make some on top of that doesn’t mean a remodeling project won’t make your home more attractive to buyers when the time comes to sell it. Truth is, opening up a kitchen wall to make a wide-open, eat-in-kitchen-dining-room combo is one of the most frequent changes house hunters say they’d like to make to the homes they are viewing!

But buyers are different everywhere — if I were you, I’d shoot an email over to the broker or agent who sold me the place, and chat with him for a few minutes about what he thinks buyers in your neck of the woods would prefer, by and large: a formal dining room or an open, eat-in kitchen. If you’re thinking about any other options, like upgrading the kitchen, but keeping the wall in place, run that past him, too.

Financial impacts are only one piece of the story

All that said, there’s one major consideration you should factor into your remodeling decision-making that neither looking at the data on remodeling ROI nor talking to your agent can capture: the use and enjoyment you and your family will get out of the opened-up kitchen in the years before you sell the place.

When I sold my first home, I put off doing a much-needed kitchen remodel the entire time I lived in the home; only after I’d already moved out and was preparing to put the place on the market did I have the whole kitchen gutted and upgraded.

And the moment I saw the finished product, I kicked myself for not having done it sooner — so we could have enjoyed it!

Your home is your largest financial asset, but it is not purely an asset — it’s primarily the place where you live and conduct the most intimate moments of your family’s life. If you’re planning to be in the home for a number of years and opening the kitchen wall is going to make you and your family happier and you can afford it, go for it — even if the numbers suggest otherwise. (And if you’re not planning to be in the home long, I’d advise against expecting to recoup all that you’ve invested in a kitchen remodel when you resell. Rather, you might just want to do a basic upgrade instead of a full remodel if you don’t plan to be in the home for long.)

via inman.com

Social Media Marketing Has a Major Influence on Moms’ Buying | Pound Ridge Realtor

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Want to market to socially-savvy moms? 92% of them buy products based on social media recommendations.

moms and social media Social Media Marketing Has a Major Influence on Moms’ BuyingData from a new study by Child’s Play Communications, specialists in connecting companies with moms, shows that moms are increasingly using social networks to research products. Presented at the Marketing to Moms Conference in Chicago,“How Moms are Using Social Media Right Now — and How You Can Make the Most of It”, also found that Facebook and blogs have the largest impact on their purchasing decisions.

1200 moms who are active on social media sites were asked these questions:

  1. What social media platforms do you currently favor?
  2. How has that changed?
  3. Why?
  4. What social media platforms impact your purchase decisions?
  5. What products do you buy as a result of social media recommendations?

Takeaways:

  • Facebook, Twitter, and blogs are the three most popular social media platforms among social moms.
  • 63% of moms tried Pinterest for the first time this year.
  • 28% would like to try Instagram.
  • Moms are early adopters of social media: Polyvore and Olioboard are among the new services they’re using.
  • 64% of moms are spending more time on Facebook than in the past.
  • 33% of them use Twitter less.
  • 92% of moms buy products as a result of a social media recommendation.
  • 80% say that blogs influence their purchasing decisions more than any other social media sites.
  • Toys are the
via pamorama.net