The Federal Housing Administration has been focusing its efforts to shore up its finances on stricter rules for lenders, but in testimony before the House Financial Services Committee on Wednesday, Housing and Urban Development Secretary Shaun Donovan is expected to announce changes to rules for borrowers, requiring more skin in the game.
Changes expected to be announced at the hearings include:
•Borrowers will need to put more money up front. Right now borrowers can put down as little as 3.5 percent. One bill in Congress calls for that to be raised to 5%. Private lenders today require between 10% and 20%. Most want 20% unless your credit score is above 750.
•Borrowers may have to pay more in insurance premiums. Right now that premium is 1.75% of the loan value plus 0.5% or 0.55% per year.
•Sellers will be restricted by how much they can help the borrower. Right now a seller can pay as much as 6% of the home's value in closing costs. The maximum level is expected to be lowered to 3%.
•Borrowers may need better credit scores. Right now the score can be as low as 500. While that's the law, lenders don't usually accept scores that low. The FHA is expected to raise that minimum score. This may not be as noticeable as the other changes because most lenders do expect a higher score, but this change will prevent abusive lenders from lending to unqualified borrowers.
The take away: Change is coming and its time to make the purchase of your new home.
To read the entire article: FHA Finally Facing Reality
Tuesday, December 8, 2009
Tuesday, November 17, 2009
Pending Homes Sales Rise
Pending home sales rose again, marking eight consecutive monthly gains – the longest streak since measurement began in 2001, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in September, rose 6.1 percent to 110.1 from a reading of 103.8 in August, and is 21.2 percent higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.
Lawrence Yun, NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”
NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in September, rose 6.1 percent to 110.1 from a reading of 103.8 in August, and is 21.2 percent higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.
Lawrence Yun, NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”
NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”
Thursday, November 12, 2009
October 2009: Austin Market Stat's
The number of sold listings jumped almost 28% from this time last year which is good news for the Austin market. We are also seeing a reduction of Days on Market (DOM) which is also good for sellers. Time will tell on the impact of the extension & expansion of the Home-Buyers Tax Credit.
Wednesday, November 11, 2009
Homebuyer Tax Credit Extended and Expanded
Last week, a new Homebuyers Tax Credit bill was signed into law. The bill extends the tax credit for first-time homebuyers (FTHBs), as well as opens it up to current homeowners who are looking to buy. And even if you aren't looking to purchase - pass on this article to anyone you think might be in the market to do so.
Here is a brief overview of the Homebuyers Tax Credit - and its benefits - based on the new bill:
Tax Credit for First-Time Homebuyers
FTHBs (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Tax Credit for Current Homeowners
The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in the military do have some special extensions on the timelines available.
What's So Great About a "Tax Credit"?
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing. Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.
Remember, the new tax credit program includes a number of details and qualifications. Call or email today if you have questions or would like to see if you can benefit from the tax credit.
Here is a brief overview of the Homebuyers Tax Credit - and its benefits - based on the new bill:
Tax Credit for First-Time Homebuyers
FTHBs (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Tax Credit for Current Homeowners
The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in the military do have some special extensions on the timelines available.
What's So Great About a "Tax Credit"?
The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction", or reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing. Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.
Remember, the new tax credit program includes a number of details and qualifications. Call or email today if you have questions or would like to see if you can benefit from the tax credit.
Friday, November 6, 2009
Homebuyer Tax Credit
Both the House and the Senate have passed an unemployment insurance bill, which includes an amended that expands and extends the tax credit. The bill will be sent to President Obama for his signature in the next day or so.
Here is a comparison chart on the difference, most notable change its just not for first time home buyers.
Click Here
Here is a comparison chart on the difference, most notable change its just not for first time home buyers.
Click Here
Wednesday, October 28, 2009
2010 Census & Congress
I had an“ah ha” moment this afternoon regarding the upcoming 2010 Census.
The number of Representatives in the U.S. House is set by law at 435 members. Based on new census numbers every ten years, the house districts are re-allocated between the states to create districts of even populations. Since some states have big increases in population while others may have declining populations, there is generally a shift in the number of congressional seats among the states, with some states gaining seats and others losing seats.
With record number of people are leaving states like California, New York, Michigan, and Pennsylvania for other parts of the country along with high foreclosure rates and unemployment, how is this going to impact redistricting? With the real possibility of these states losing congressional seats for them to be added elsewhere in the U.S.; it makes me wonder about elections in 2010 and 2012…
The number of Representatives in the U.S. House is set by law at 435 members. Based on new census numbers every ten years, the house districts are re-allocated between the states to create districts of even populations. Since some states have big increases in population while others may have declining populations, there is generally a shift in the number of congressional seats among the states, with some states gaining seats and others losing seats.
With record number of people are leaving states like California, New York, Michigan, and Pennsylvania for other parts of the country along with high foreclosure rates and unemployment, how is this going to impact redistricting? With the real possibility of these states losing congressional seats for them to be added elsewhere in the U.S.; it makes me wonder about elections in 2010 and 2012…
Tuesday, October 27, 2009
Real Economic Recovery
In my daily reading, I came across an article by James Gaine that, in my opinion, put in simple terms what needs to happen for a real recovery of the U.S. economy. As we all know, the U.S. economy functions on borrowed credit. In the not so distant past that came to an abrupt halt. We are currently in the 23rd month of a recession. The average length of a recession since the Great Depression is 15 months. To come out on the other side, several things must happen: business must make a profit, household debt must revert to normal level, employment and home prices need to stabilize and rise and investor confidence must return. When we reach the critical mix of the aforementioned, we will then see a true recovery. To read the article in is entirety there is the link (http://recenter.tamu.edu/pdf/1916.pdf).
Tuesday, October 20, 2009
NAR Economist's Outlook
Low inflation allows lenders to loan money at lower rates without much fear of loss in purchasing power.
Read more about the NAR Daily Forecast Update.
Read more about the NAR Daily Forecast Update.
Monday, October 19, 2009
September MLS Austin Stats
Austin in still holding steady in the current market. The most recent MLS stat's reflect the impact of the first time home buyers. The median home price rising by .5% and days on market dropping to 47.
Thursday, October 15, 2009
November Elections VOTE YES on Prop 2, 3, 5 & 11
There are four very important propositions on the November ballot that affect all Texas homeowners and property owners. VOTE YES for the following propositions:
(1) Proposition 2: Ensures that residential property is appraised as residential property, not a hypothetical value based on “highest and best use”
(2) Proposition 3: Allows the state to have oversight of central appraisal districts and enforce uniform appraisals standards across the state.
(3) Proposition 5: Allows two or more adjoining appraisal districts to have combined appraisal review board to ensure qualified and knowledgeable board members.
(4) Proposition 11: Provides private property owner protections by placing in the Texas Constitution clear restrictions on the use of eminent domain; Close a loophole that allows governmental entities to take well-maintain land on the grounds of “blight”; Prohibit the government from acquiring property through eminent domain with no clear plans to put the property to public use; And require a super majority vote of the legislature to grant new eminent domain authority to a new governmental entity.
Early Voting begins October 19 - 30. Regular voting November 3
http://www.sos.state.tx.us/elections/voter/where.shtml
(1) Proposition 2: Ensures that residential property is appraised as residential property, not a hypothetical value based on “highest and best use”
(2) Proposition 3: Allows the state to have oversight of central appraisal districts and enforce uniform appraisals standards across the state.
(3) Proposition 5: Allows two or more adjoining appraisal districts to have combined appraisal review board to ensure qualified and knowledgeable board members.
(4) Proposition 11: Provides private property owner protections by placing in the Texas Constitution clear restrictions on the use of eminent domain; Close a loophole that allows governmental entities to take well-maintain land on the grounds of “blight”; Prohibit the government from acquiring property through eminent domain with no clear plans to put the property to public use; And require a super majority vote of the legislature to grant new eminent domain authority to a new governmental entity.
Early Voting begins October 19 - 30. Regular voting November 3
http://www.sos.state.tx.us/elections/voter/where.shtml
Tuesday, September 29, 2009
Run For The Water
Registration is now open for the 2009 Gazelle Foundation Run for the Water presented by Keller Williams Realty. Rapidly becoming the premier fall running event for Central Texas, Run for the Water’s offers everyone from kids to casual joggers to competitive runners a great event that supports a great cause. Retaining last year’s popular downtown and west Austin venue, events include a 5K run, 10-mile race and a Kid’s K. Details for the race and race registration are at www.runforthewater.com .
By simply entering the race, every runner, regardless of their level, basically enables a lifetime of clean water for one other person in Burundi.
The founder of the Gazelle Foundation is Gilbert Tuhabonye. You can read more about him and his surviving genocide "This Voice in My Heart".
By simply entering the race, every runner, regardless of their level, basically enables a lifetime of clean water for one other person in Burundi.
The founder of the Gazelle Foundation is Gilbert Tuhabonye. You can read more about him and his surviving genocide "This Voice in My Heart".
Monday, September 28, 2009
FICO 08 - New Credit Score Model
The credit scoring system is being tweaked again as Fair Isaac Corporation, developer of the FICO credit score rolls out a new model dubbed FICO 08.
The three major credit bureaus announced credit score packages of their own, probably having seen the success FICO was having in charging consumers for information on their credit scores. FICO, however, remains the product used by most lenders not only to grant credit but to set interest rates and other loan terms. FICO scores are also factored into credit decisions by insurance underwriters, cell phone, and utility companies and are sometimes used by employers to evaluate prospective employees.
FICO predicts that the new scoring system will help lenders reduce default rates on consumer loans between 5 and 15%. FICO 08 will supposedly go easier on consumers who make the occasional slip while coming down harder on those with multiple offenses. For example, it will give a slightly higher score than previously to a borrower who is late on one obligation but current on multiple other accounts. Those with several delinquent accounts could find their credit score has dropped.
To read more: http://tiny.cc/doCy2
The three major credit bureaus announced credit score packages of their own, probably having seen the success FICO was having in charging consumers for information on their credit scores. FICO, however, remains the product used by most lenders not only to grant credit but to set interest rates and other loan terms. FICO scores are also factored into credit decisions by insurance underwriters, cell phone, and utility companies and are sometimes used by employers to evaluate prospective employees.
FICO predicts that the new scoring system will help lenders reduce default rates on consumer loans between 5 and 15%. FICO 08 will supposedly go easier on consumers who make the occasional slip while coming down harder on those with multiple offenses. For example, it will give a slightly higher score than previously to a borrower who is late on one obligation but current on multiple other accounts. Those with several delinquent accounts could find their credit score has dropped.
To read more: http://tiny.cc/doCy2
Sunday, September 27, 2009
This Month In Real Estate: August 2009
Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to help combat the "doom and gloom" messages of the national print and television media with real information on real estate.
If you have any questions about the Austin real estate market, please contact me.
If you have any questions about the Austin real estate market, please contact me.
Saturday, September 26, 2009
Investing in Real Estate
It could be a good time to invest in real estate, given the abundance of foreclosures and other distressed properties with reduced prices. It could also be a bad time to invest in real estate, if you don't know what you are doing.
There's the rub.
It's a good time to invest, but it is difficult. Now when you go out to invest you are competing with a dozen offers. The investors are back. Just like buying a home to live in, taking the real estate investment plunge requires taking stock of your financial goals, planning and lifestyle before taking the plunge.
Pretty much like buying any property. If you've got the time, the money and the lifestyle that lends itself to managing a real estate investment, you are just about half way there.
There's the rub.
It's a good time to invest, but it is difficult. Now when you go out to invest you are competing with a dozen offers. The investors are back. Just like buying a home to live in, taking the real estate investment plunge requires taking stock of your financial goals, planning and lifestyle before taking the plunge.
Pretty much like buying any property. If you've got the time, the money and the lifestyle that lends itself to managing a real estate investment, you are just about half way there.
Friday, September 18, 2009
Pending Homes Sales on Record Roll
Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.
Lawrence Yun, NAR chief economist, stated “other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,”
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.
Lawrence Yun, NAR chief economist, stated “other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,”
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.
Wednesday, September 16, 2009
Mortgage Credit Certificate Program (MCC)
How can your borrower...
1. Qualify for an additional $166 a month maximum?
2. Receive an additional $2,000 tax credit at the end of the year?
3. Pay a rate of 6% and it feel more like 4%?
4. Earn more income per month with a 1st time buyer program?
5. Receive an extra tax benefit for every year they own a home?
6. Reduce their monthly mortgage payment by $166 a month?
7. Buy a house for $0 out of pocket and still receive a Tax Credit?
8. Save at least $25,000 in interest over the life of their mortgage?
....with the MCC Program.
A Mortgage Credit Certificate Program (MCC) allows the homebuyer to claim a tax credit for some portion of their mortgage interest paid per year. It is a dollar for dollar reduction against their federal tax liability. The program is open to those individuals and families who:
• Meet income and home purchase requirements.
• Have not owned a home as a primary residence in the past 3 years.
• Meet the qualifying requirements of the mortgage loan.
• Will use the home as heir principal/primary residence.
1. Qualify for an additional $166 a month maximum?
2. Receive an additional $2,000 tax credit at the end of the year?
3. Pay a rate of 6% and it feel more like 4%?
4. Earn more income per month with a 1st time buyer program?
5. Receive an extra tax benefit for every year they own a home?
6. Reduce their monthly mortgage payment by $166 a month?
7. Buy a house for $0 out of pocket and still receive a Tax Credit?
8. Save at least $25,000 in interest over the life of their mortgage?
....with the MCC Program.
A Mortgage Credit Certificate Program (MCC) allows the homebuyer to claim a tax credit for some portion of their mortgage interest paid per year. It is a dollar for dollar reduction against their federal tax liability. The program is open to those individuals and families who:
• Meet income and home purchase requirements.
• Have not owned a home as a primary residence in the past 3 years.
• Meet the qualifying requirements of the mortgage loan.
• Will use the home as heir principal/primary residence.
Thursday, June 25, 2009
Monetizing the First Time Homebuyers Tax Credit
A new program that the Texas Department of Housing and Community Affairs (TDHCA) released on Monday, June 22nd. Many buyers may already know, the American Recovery and Reinvestment Act of 2009 provides a federal tax credit to first-time homebuyers that is equal to 10% of the purchase price of their home up to $8,000. In an effort to monetize the tax credit, TDHCA created the “90-day Down Payment Assistance Program.” If you have questions about this program, please contact me.
Bond Market & Interest Rates
Added supply has been one of the main culprits behind the recent sell-off in Bonds and corresponding climb in home loan rates. So where is that supply coming from? First, all those refinances you've heard about lately are actually turned into Mortgage Backed Securities after they're closed, which adds more Bonds to the market. Plus, government spending plans have to be paid, therefore, record levels of Treasury Securities are being auctioned off these days. Although the Fed has a program to purchase some of these Mortgage Bonds, the number of new Bonds simply outweighs what the Fed is able to buy - therefore driving Bond prices lower and home loan rates higher.
Thursday, June 18, 2009
This Month In Real Estate: June 2009
Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to help combat the "doom and gloom" messages of the national print and television media with real information on real estate.
If you have any questions about the Austin real estate market, please contact me.
If you have any questions about the Austin real estate market, please contact me.
Saturday, June 6, 2009
Report: Austin will be 5th fastest growing U.S.metro in coming years
The population of the Austin metro area will grow to more than 2.7 million by the year 2025, according to an analysis of government data by bizjournals.
The projected growth rate of Austin and its suburbs ranks 5th among 250 U.S. metropolitan areas studied in the report.
Bizjournals forecasts that the Austin-Round Rock area will grow nearly 87 percent from its 2005 estimated population of nearly 1.5 million to a 2025 projected population of 2.7 million, an increase of nearly 1.3 million residents.
Austin will see the most growth of any Texas city, according to the bizjournals analysis. The McAllen-Edinburg area will be the second-fastest growing metro in Texas, ranking 22nd on the list with an estimated 56 percent growth in population.
Among the major Texas cities:
• Dallas/Fort Worth ranks 26th with a projected 50 percent population increase to 8.8 million people.
• Houston ranks 27th with a projected 48 percent population increase to 7.9 million people.
• San Antonio ranks 40th with a projected 41 percent population increase to 2.7 million people.
Source: Austin BizJournal, June 2 2009
The projected growth rate of Austin and its suburbs ranks 5th among 250 U.S. metropolitan areas studied in the report.
Bizjournals forecasts that the Austin-Round Rock area will grow nearly 87 percent from its 2005 estimated population of nearly 1.5 million to a 2025 projected population of 2.7 million, an increase of nearly 1.3 million residents.
Austin will see the most growth of any Texas city, according to the bizjournals analysis. The McAllen-Edinburg area will be the second-fastest growing metro in Texas, ranking 22nd on the list with an estimated 56 percent growth in population.
Among the major Texas cities:
• Dallas/Fort Worth ranks 26th with a projected 50 percent population increase to 8.8 million people.
• Houston ranks 27th with a projected 48 percent population increase to 7.9 million people.
• San Antonio ranks 40th with a projected 41 percent population increase to 2.7 million people.
Source: Austin BizJournal, June 2 2009
Wednesday, June 3, 2009
Pending Home Sales Rise in April
The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in more than seven years, a sign that sales are finally coming to life after a long and painful slump.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.
Are we at the bottom of the market? It may be too soon to tell. We will have to watch the next 45 to 90 days to see if these pending sales turn in to closed sales/transactions.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.
Are we at the bottom of the market? It may be too soon to tell. We will have to watch the next 45 to 90 days to see if these pending sales turn in to closed sales/transactions.
Monday, June 1, 2009
The Austin Economy
When the Texas Legislature adjourns next week, this is certain: Texas will have a balanced budget with no tax increases and there will a big increase in its Rainy Day Fund “savings account.” Look around you. No other major state can make those claims.
Members of the Texas House and Senate will leave Austin this week after adjourning 06/01/09. They will not re-convene in Austin in regular session until January 2011. Many of them will watch other states raise taxes, cut their budgets and plea with Washington for help.
The release last Friday of the April 2009 workforce numbers show that Austin’s net job gain was 0.4% over April 2008, while Texas job totals are down 1.6% and nationally, the comparative numbers show a 3.8% loss. In pure numbers, the Austin metro gained 3,400 jobs.
An analysis by Beverly Kerr, VP/Research for the Austin Chamber, shows that Austin’s April-over-April net gain in jobs is due to a 3,900 gain in the government sector that compensated for 500 jobs lost in private industry.
Admittedly the increase in jobs in the Austin metro is small and the number of unemployed is higher than a year ago. But, hey, it’s the best job situation in the nation. Given this, an examination of how this has occurred is timely.
Which Austin private sector segments are losing the most jobs? Kerr said the highest rate of losses occurred in these three categories: natural resources and construction, manufacturing and wholesale trade.
Source: Volume 31, Number 9 of The Neal Spelce Austin Letter
Members of the Texas House and Senate will leave Austin this week after adjourning 06/01/09. They will not re-convene in Austin in regular session until January 2011. Many of them will watch other states raise taxes, cut their budgets and plea with Washington for help.
The release last Friday of the April 2009 workforce numbers show that Austin’s net job gain was 0.4% over April 2008, while Texas job totals are down 1.6% and nationally, the comparative numbers show a 3.8% loss. In pure numbers, the Austin metro gained 3,400 jobs.
An analysis by Beverly Kerr, VP/Research for the Austin Chamber, shows that Austin’s April-over-April net gain in jobs is due to a 3,900 gain in the government sector that compensated for 500 jobs lost in private industry.
Admittedly the increase in jobs in the Austin metro is small and the number of unemployed is higher than a year ago. But, hey, it’s the best job situation in the nation. Given this, an examination of how this has occurred is timely.
Which Austin private sector segments are losing the most jobs? Kerr said the highest rate of losses occurred in these three categories: natural resources and construction, manufacturing and wholesale trade.
Source: Volume 31, Number 9 of The Neal Spelce Austin Letter
Saturday, May 30, 2009
HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.
To read the entire news release click here.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.
To read the entire news release click here.
Wednesday, May 27, 2009
Short Sales
Many sellers in today’s market have little or no equity, or simply, the seller owes close to or more than the property is worth. In these situations, lenders are apt to accept less than the full amount due, commonly referred to as a ‘short pay’ or ‘short sale’.
Many folks who are ‘upside down’ on their mortgage opt to simply ‘walk away’ from their home, and allow it to foreclose. The short sale offers a much better solution and provides a win-win for the lender and home owner.
From the lender’s perspective, a short sale saves many of the high costs associated with the foreclosure process: attorney fees, the eviction process, delays from borrower bankruptcy, damage to the property, costs associated with resale, etc. In a short sale scenario, the lender gets their money faster and is able to cut its losses.
The bottle line, if your home is worth less than you owe, you can still sell it via a short sale – without bringing any money to the closing.
If you have any questions about this process, please contact me.
Many folks who are ‘upside down’ on their mortgage opt to simply ‘walk away’ from their home, and allow it to foreclose. The short sale offers a much better solution and provides a win-win for the lender and home owner.
From the lender’s perspective, a short sale saves many of the high costs associated with the foreclosure process: attorney fees, the eviction process, delays from borrower bankruptcy, damage to the property, costs associated with resale, etc. In a short sale scenario, the lender gets their money faster and is able to cut its losses.
The bottle line, if your home is worth less than you owe, you can still sell it via a short sale – without bringing any money to the closing.
If you have any questions about this process, please contact me.
Wednesday, May 20, 2009
Austin Down-Payment Assistance Program
The Down Payment Assistance Program (DPA) provides qualified, first-time homebuyers, with a zero interest loan to assist with purchasing a home located within the Austin City Limits. DPA funds cover the down payment and eligible closing costs and pre-paid expenses associated with buying a home.
The DPA Program options are as follows:
Standard DPA: Up to $10,000 in a deferred, forgivable, 0% interest loan for 10 years. Up to $1,000 additional for borrowers in a Mortgage Credit Certificate Program and up to $4,999 for people with disabilities. The loan is forgiven if the borrower remains in the home ten (10) years without transferring title. Otherwise the loan is due and payable if the borrower sells, leases, transfers title, refinances, gets a home equity loan, or pays off the first lien within ten (10) years.
(NEW) Shared Equity DPA: Up to $40,000 in a deferred,0%-interest loan for 30 years. Borrowers must pay back the DPA loan plus a percentage of their equity (that is the same percentage as AHFC's contribution) when the borrower sells, leases, refinances, gets a home equity loan, pays off the first lien, or otherwise transfers title within 30 years. When selling the home, the borrower agrees to give AHFC the chance to purchase the house at market rate ("right of first refusal").
For more information you can visit: http://www.ci.austin.tx.us/ahfc/first_dpa.htm
The DPA Program options are as follows:
Standard DPA: Up to $10,000 in a deferred, forgivable, 0% interest loan for 10 years. Up to $1,000 additional for borrowers in a Mortgage Credit Certificate Program and up to $4,999 for people with disabilities. The loan is forgiven if the borrower remains in the home ten (10) years without transferring title. Otherwise the loan is due and payable if the borrower sells, leases, transfers title, refinances, gets a home equity loan, or pays off the first lien within ten (10) years.
(NEW) Shared Equity DPA: Up to $40,000 in a deferred,0%-interest loan for 30 years. Borrowers must pay back the DPA loan plus a percentage of their equity (that is the same percentage as AHFC's contribution) when the borrower sells, leases, refinances, gets a home equity loan, pays off the first lien, or otherwise transfers title within 30 years. When selling the home, the borrower agrees to give AHFC the chance to purchase the house at market rate ("right of first refusal").
For more information you can visit: http://www.ci.austin.tx.us/ahfc/first_dpa.htm
Thursday, May 14, 2009
Credit is Key to Real Estate Recovery
Improving the availability of credit and access to capital are essential to recovery in the real estate market. Addressing these challenges was the focus of the "Financing Real Estate for Tomorrow" session, part of the National Association of Realtors®' day long “Real Estate Summit: Advancing the U.S. Economy.”
“As the leading advocate for housing issues and homeownership, NAR knows that real estate is the road to economic recovery,” said NAR President-Elect Vicki Cox Golder. “It is vital for the health of both the residential and commercial real estate markets to improve the flow of credit, and we look forward to identifying paths toward a successful resolution of this current credit crisis."
In his keynote address to the attendees, former Federal Reserve Board Chairman Alan Greenspan identified two major problems confronting a housing recovery and ultimately an economic recovery in the near-term – falling home prices and increased inventory. Falling home prices decrease homeowners’ equity, and when mortgage debt exceeds equity, defaults increase. To exacerbate the problem, increased inventory of unsold single-family homes continues to depress prices.
For more information http://www.realtor.org/press_room/news_releases/2009/05/re_recovery
“As the leading advocate for housing issues and homeownership, NAR knows that real estate is the road to economic recovery,” said NAR President-Elect Vicki Cox Golder. “It is vital for the health of both the residential and commercial real estate markets to improve the flow of credit, and we look forward to identifying paths toward a successful resolution of this current credit crisis."
In his keynote address to the attendees, former Federal Reserve Board Chairman Alan Greenspan identified two major problems confronting a housing recovery and ultimately an economic recovery in the near-term – falling home prices and increased inventory. Falling home prices decrease homeowners’ equity, and when mortgage debt exceeds equity, defaults increase. To exacerbate the problem, increased inventory of unsold single-family homes continues to depress prices.
For more information http://www.realtor.org/press_room/news_releases/2009/05/re_recovery
Wednesday, May 13, 2009
This Month In Real Estate: May 2009
I thought you would want to see the latest in a series of news reports on real estate trends. It's called "This Month in Real Estate."
We understand how hard it is to escape the national media's dire predictions for home buyers and sellers in today's market.
But there's another side to the real estate story: this market offers amazing opportunities for buying and selling real estate right now -- in your area.
Get the Flash Player to see this video.
We're not missing those opportunities, because we're in the market every day, working for our clients to make the most of this market. And we can't wait to do the same for you!
If you would like the best deals on the market, then please email me at cyndi_bell@kw.com.
We understand how hard it is to escape the national media's dire predictions for home buyers and sellers in today's market.
But there's another side to the real estate story: this market offers amazing opportunities for buying and selling real estate right now -- in your area.
Get the Flash Player to see this video.
We're not missing those opportunities, because we're in the market every day, working for our clients to make the most of this market. And we can't wait to do the same for you!
If you would like the best deals on the market, then please email me at cyndi_bell@kw.com.
Forbes ranks Austin No. 8 on best places for biz list
Forbes.com ranks Austin the 8th best place for business and care-ers in its latest list.
Texas' Capital City rose significantly from 47th on last year's list. Austin was behind cities such as No. 1 Raleigh, N.C. And No. 4 Fayetteville, Ark. The list was ranked according to factors such as cost of doing business and projected employment growth.
Forbes.com cited Austin's projected annual job growth rate of 2.3 percent--the fifth fastest in the country, and its relatively low sub-prime mortgage exposure.
For its reporting on Austin, Forbes.com spoke with the Charles Schwab Corp., which expanded its Austin presence in 2007 when it purchased the 401(k) Co. "The city of Austin is extremely business-friendly. They have bent over backwards to accommodate us," Glenn Cooper, head of real estate at Schwab, told the news site.
The top 10 cities on the list were as follows:
Raleigh, N.C.
Fort Collins, Colo.
Durham, N.C.
Fayetteville, Ark.
Lincoln, Neb.
Asheville, N.C.
Des Moines, Iowa
Austin, Texas
Boise, Idaho
Colorado Springs, Colo.
"Source: Austin Business Journal; Friday, March 27, 2009 "
Texas' Capital City rose significantly from 47th on last year's list. Austin was behind cities such as No. 1 Raleigh, N.C. And No. 4 Fayetteville, Ark. The list was ranked according to factors such as cost of doing business and projected employment growth.
Forbes.com cited Austin's projected annual job growth rate of 2.3 percent--the fifth fastest in the country, and its relatively low sub-prime mortgage exposure.
For its reporting on Austin, Forbes.com spoke with the Charles Schwab Corp., which expanded its Austin presence in 2007 when it purchased the 401(k) Co. "The city of Austin is extremely business-friendly. They have bent over backwards to accommodate us," Glenn Cooper, head of real estate at Schwab, told the news site.
The top 10 cities on the list were as follows:
Raleigh, N.C.
Fort Collins, Colo.
Durham, N.C.
Fayetteville, Ark.
Lincoln, Neb.
Asheville, N.C.
Des Moines, Iowa
Austin, Texas
Boise, Idaho
Colorado Springs, Colo.
"Source: Austin Business Journal; Friday, March 27, 2009 "
Monday, May 11, 2009
The Economy
"Reality is the leading cause of stress amongst those in touch with it". Lily Tomlin
The reality of our current economy is stressful for many of us, is there some good news out there? This past Friday's job report shows we lost 539,000 jobs in April. The expectation had been 610,000. This represents the smallest job loss since October. Even as the unemployment rate hits a 26 year high, this might be an indicator that the worst could be over for the job market and possiblely lessen the stress in this area.
The reality of our current economy is stressful for many of us, is there some good news out there? This past Friday's job report shows we lost 539,000 jobs in April. The expectation had been 610,000. This represents the smallest job loss since October. Even as the unemployment rate hits a 26 year high, this might be an indicator that the worst could be over for the job market and possiblely lessen the stress in this area.
Experian FICO Credit Scores No Longer Available
As of February 14, information on Experian credit scores will be more difficult for consumers to obtain. Experian will no longer sell its information through MYFICO.com or any other external credit reporting agency. Consumer may still receive the free credit report that they are entitled to by law through the Annual Credit Report request service and may purchase a credit report and score directly from Experian. However, these score may vary from the scores used by lenders. According to The New York Times and Tom Quinn, vice president for scoring at Fair Issac (the company that formulated the FICO score), “Experian cannot distribute its FICO scores to consumers itself or though other outlets. Experian does produce another propriety three-digit credit score and make it available to consumers, but it is not the one that lenders base their decisions on.” Lenders will still have access to the complete FICO scores, including FICO scores from Experian. It will be increasingly important for consumers to check for errors on their credit reports.
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