Real Estate New York

Market Update February 2010
2 Months Left to Use $6,500-$8,000 Buyer Tax Credit information

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U.S. Lags Behind in Real Estate Recovery.

While the forecast is for a return to an appreciating market this year,
other countries' real estate market are already booming or never declined.

Why do we care? Because real estate, once a local phenomenon. is now tied to the fortunes or the global economy. What happens elsewhere will usually happen here. The good news is that the U.S. real estate market will eventually follow suit with the rest of the world once we are clear of the specter of the Sub Prime lending debacle. If the rest of the world were faltering we might expect to follow that trend as well.

China while predictions abound of a looming bubble in China's economy,
GDP has far outreached the booming real estate market.

Read more from The International Business Times by Aireview

Canada Average home prices in Canada have risen 23% from their trough in January 2009. Home-sales volumes are up 70% over the same period.

Canada never had the kind of bubble created by risky "subprime" home loans that the U.S. had, thanks in part to conservative lending practices.

Read more from The Wall Street Journal

New Zealand house prices climbed for a fourth month in January, fueled by increased demand for property in the nation’s largest cities as the economy emerges from a recession.

Read more from Bloomberg.com by Tracy Withers

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FHA Remains the Mortgage Lifeline

FHA helped 2 million borrowers in its last fiscal year, double its volume the previous year. That’s a testament to the crucial role the agency is playing in housing markets, FHA Commissioner David Stevens said on Saturday on Real Estate Today, NAR’s national consumer radio show.

Stevens doesn’t talk about concerns among lawmakers and in the media about whether FHA is getting over-extended or whether the safety measures the agency rolled out about a month and a half ago are working. These include requiring borrowers with a credit score of 580 or less to put up a minimum 10 percent down (it remains 3.5 percent down for those with higher credit scores) and upping the mortgage insurance premium. No doubt it’s too soon to tell what impact those changes are having.

But he does reiterate what has always made FHA a remarkably stable agency over its seven decades, and that’s its focus on owner-occupant borrowers and its requirement that applications be fully documented. As he tells Gil Gross, the show’s host, “We don’t do investment properties. We only do 30-year, fully amortizing, fixed-rate mortgages, and every loan is fully documented, so when we approve a borrower . . . we know their ability to repay that loan has been verified.”

Read more by Robert Freedman, Senior Editor, REALTOR® Magazine

Listen to Stevens’ eight-minute interview on Real Estate Today: RET Radio interview with Commissioner Stevens

Design for Amateurs: Your Guide to Style

Can you still design a chic room without being a designer? I recently stumbled upon this article by Pedro Arrais, Guidelines for Home Design: Helpful Suggestions From the Experts, that breaks down good design for amateurs.

He offers several simple design principles for sprucing up interiors that might inspire you for your listings — he covers everything from where to place the furniture and artwork to how to bring balance to a room.

Among the tips:

Don’t match everything. Instead mix your colors, fabrics, and textures in a room to add more visual interest and make it more memorable. Also, vary the height of the furniture.

Beware of neutral overload. We love to reach for the beiges and tans to make homes move-in ready but you can also risk it being too blah. Mix neutrals with some vibrant pops of color.

Read more by Melissa Dittmann Tracey, REALTOR® Magazine

Home Tweat Home

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formerly: myReny, which is now the user name for
Capital Region Real Estate News

Each day Real Estate New York staffers pick the best
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and esthetics. Previous days Tweets are also available for a fast overview of the best
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Not Getting First Look Listings?

Most often this is caused by the clients spam filter stopping the email listing from arriving.

Usually this can be remedied by including: Email@ParagonMessaging.com as a Safe Sender or white listing the above email address as safe. If help is needed to do this you may contact:

Dennis Maier 518-312-4030 extension #1 or 888-749-3384 toll free

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Spring 2010: Housing's Crystal Ball

HOME buyers heading into real estate’s busy spring season face a tricky question: should they buy soon, before mortgage rates increase, or wait a few months, when housing prices are finally expected to hit rock bottom?

Of course, the assumptions at the core of that question could easily fall through. But rarely in recent years have economists from the mortgage and housing industries been so closely aligned in their short-term nationwide forecasts as they seem to be now.

Economists are generally predicting that mortgage rates will begin to edge up in late March, settling at about 5.5 percent, possibly as high as 6 percent, for a 30-year fixed-rate loan. The rate today is around 5 percent. They also expect that the inventory of foreclosed homes will grow through the summer, saturating the market with cheap properties and keeping overall prices low.

“I wouldn’t rush,” said Mark Zandi, the chief economist at Moody’s Economy.com, “but if I found a house I was excited about, I wouldn’t wait. You might not be buying at the very bottom, but you’ll still get a great rate, and if you stay for more than a few years, you’ll be rewarded.”

By that time, he added, home values will have appreciated.

Two factors could push rates higher, economists say. First, the Federal Reserve is set to stop subsidizing the mortgage market sometime next month, when it exhausts the roughly $1.25 trillion earmarked for mortgage-backed securities sold by Fannie Mae and Freddie Mac. The government stepped in as a buyer during the mortgage market crisis, when most investors had rejected these securities. Economists expect investors to re-enter the market, but only if rates on the securities become more attractive.

Mortgage rates also typically move in lockstep with the long-term economic outlook. Economists generally believe that the nation is in the early stages of a slow recovery, and that as the recovery proceeds, interest rates will go up.

Mr. Zandi and Jay Brinkmann, the chief economist for the Mortgage Bankers Association in Washington, are both predicting that rates will not exceed 5.5 percent this year. If they rose beyond that level, Mr. Brinkann said, the federal government would very likely resume its subsidies rather than risk damaging the real estate market.

But Cameron Findlay, the chief economist for LendingTree.com, predicted that rates could go as high as 6 percent without any government intervention.

Mr. Findlay also studied the mortgage burden of households across the nation, as a guide to how quickly particular states could recover from the recession.

In New York state, for instance, the average mortgage payment is $1,326, or about 34 percent of the average household’s income ($47,349), Mr. Findlay said. The state’s unemployment rate is 9 percent, which is slightly lower than the national average of 9.7 percent. Mr. Findlay’s data did not separate New York City from the rest of the state.

Read more from The New York Times by BOB TEDESCHI

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Northeast Home Sales Up From Year-Ago Levels

Home sales in the Northeast tumbled from December to January, but were still 17 percent above year-ago levels, the National Association of Realtors said Friday.

The median sales price in the nine-state region was $245,300, up nearly 9 percent from January 2009.

The Northeast suffered a bigger decline from December than the nation as whole, but yearly comparisons looked stronger. Nationwide, home sales were up 7 percent from January last year, without adjusting for seasonal factors.

Nicholas Retsinas, director of the Joint Center for Housing Studies at Harvard University, sees signs the Northeast housing market has bottomed out, though the future remains uncertain.

''The more likely prospect is a stabilized housing market ... but not necessarily a recovering housing market,'' Retsinas said, adding that the government intervention that has helped prop up the flagging market cannot be sustained long term.

Sales in most of the nine major Northeast cities tracked by the Associated Press-Re/Max Monthly Housing Report were sharply lower compared to the month of December, yet improved when compared with January 2009. The report, also released Friday, analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Read more from The New York TImes by Associated Press

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Get Ready for Higher Mortgage Rates

Even though signs of a housing recovery are uneven at best, the Federal Reserve is about to take off the training wheels it has had in place for more than a year to help the battered market.

The Fed has been buying mortgage-backed securities, the bundling of home loans that are used to fund mortgage lending, since late 2008. But next month it plans to complete its purchase of $1.25 trillion in mortgages.

That could be bad news. There is wide agreement that the removal of this support will mean higher mortgage rates, which could hit housing prices and sales hard. Some even worry that this could cause the broader economic recovery to stall.

The program was the largest single injection of cash into the economy by the Fed during the financial crisis, and it will be the longest-lasting source of funds as well. Even though the Fed intends to stop buying mortgages, few expect the central bank will start selling them to private investors any time in the next few years.

Read more from CNNMoney.com by Chris Isidore

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Mortgage Rates and Trends

The link to up to the minute New York State mortgage information seems to work better than presenting the actual graph. Click for up to the minute mortgage rate information

Buyers' versus Sellers' Market Report

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The graph above shows the number of sales in a given month divided by the number of homes on the market in the four main counties of the Capital Region.

February sales figures show a continued path into strong buyer territory. This is typical of this time of year and presents an excellent buying opportunity for those willing to brave the cold for a bargain.

*This ratio can be used to determine whether we are in a buyers' or sellers' market as indicated in Dennis Maier's article on Market Timing featured in eZine Real Estate. In general, if it would (theoretically) take less than 6 1/2 months to sell the current inventory it's a sellers' market. If it would take more than 9 months to sell all the homes on the market it's a buyers' market.

Market Statistics as of March 1, 2010

The average list and sale prices for the month of February 2010 show a significant reversal of trend and a level well above February 2009 prices. This is further indication of a return to a normal market in 2010.

The average asking price to sale price has increased slightly from 96.07% in January to 96.89% for February. The number of sales at 280 is slightly up from 265 last month as is typical for this time of year.

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