My, How Homes Have Changed!

      

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Homes have evolved drastically since the 1950s. Indeed, what excited home buyers decades ago may be in stark contrast to what gets today’s generation excited.

• 1950s: Homes in the 1950s tended to have more bathrooms (an average of 2.35) than bedrooms (1.5).
• 1960s: The average home size grew to 1,200 square feet as the bedroom and bathroom ratio flipped (an average of 2.5 bedrooms to 1.5 bathrooms).
• 1970s: One of the most popular trends were appliances in bold colors, like avocado and harvest gold.
• 1980s: More neutral tones entered into appliance color schemes with almond and beige. This decade also brought the first Macintosh 128K into homes.
• 1990s: The average home square footage (2,080) climbed 21 percent this decade compared to the 1980s (1,740). However, the number of rooms in the home remained the same.
• 2000: The kitchen takes on a futuristic feel with stainless steel appliances growing in popularity.
• 2010: Lot sizes mostly stay the same prompting more architects to build upwards with more floors and higher ceilings.
• 2016: Buyers show a preference for flexible spaces (wanting to customize spaces to fit their individual needs) and greater connectivity between indoor and outdoor living areas.

Source: Fielding Homes

What’s in Store for Housing in 2012?

Daily Real Estate News | Wednesday, December 28, 2011
The worst for the housing market may finally be over, according to housing experts in a recent article in Kiplinger. After median home price have dropped nearly 40 percent nationwide, a rebound is taking shape — although, housing experts say, the market may stay flat for awhile before gradually ticking up.

According to housing experts in a recent Kiplinger article, here are some predictions for the real estate market in the coming year:

Home prices stabilize: Mark Zandi, chief economist at Moody’s Analytics, predicts that home prices nationwide may still drop another 3 to 5 percent in 2012, but the new year will most likely finally bring a leveling off of home prices before gains start to take shape in 2013. When markets do begin to stabilize in the new year, “price appreciation tends to spread unevenly, creating a lot of confusion about where the recovery is occurring and when,” David Stiff, chief economist at Fiserv Case-Shiller, told Kiplinger. “Even within a single city, more desirable neighborhoods will stabilize first, while prices in other neighborhoods may fall at a rapid pace.”

Housing affordability high: Housing affordability — the ratio of median home prices to median family income — will likely remain at record levels in 2012. Homes in many cities are “substantially undervalued,” the Kiplinger article notes. That may even lead to a mini bubble with double-digit spikes in prices, such as an increase of 10 to 15 percent in a given year in some markets, housing experts say.

Low mortgage rates: Helping to keep affordability high, low mortgage rates are expected to continue on in 2012 — at least the first part of the year, economists predict. The 30-year fixed-rate mortgage, the most popular among home buyers, has been hovering under a 4-percent average the past few weeks, staying in record low territory. Rates are expected to stay between 4 to 5 percent in 2012, predicts Guy Cecala, publisher of Inside Mortgage Finance, an industry publication.

Sales increases: The National Association of REALTORS® has already been showing a tick up in sales taking shape with increases in existing-home sales during the summer and early fall of 2011. High inventories of homes continue to flood the market but a drastic slowdown in new-home building the past three years is “gradually easing the surplus,” the Kiplinger article notes.

Foreclosures: Foreclosures remain the problem and still plague many markets. After a slowdown with lenders processing the paperwork, foreclosures have began to pick up once again. About 1.84 million home loans are 90 days or more delinquent and 2.17 million have finished the foreclosure process but aren’t up for sale yet, according to RealtyTrac data. Alex Villacorta, director of research and analytics at Clear Capital, told Kiplinger that he predicts regardless of the downward price pressure caused from foreclosures, overall home prices won’t fall as long as lenders bring additional foreclosures to the housing market at a steady pace.

Source: “What’s Ahead for Home Prices in 2012,” Kiplinger (January 2012)

Home Purchase Tax Credit

The Internal Revenue Service has answered a couple of questions regarding documentation required to secure the first-time and move-up home buying tax credits. It is not common in all areas of the country to have seller and buyer signatures on the  HUD-1 form. 

The IRS clarifications says: “In areas where signatures are not required on the settlement document, the IRS will accept a settlement statement if it is completed and valid according to local law. The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.” 

Move-up buyers must provide documentation that shows they lived in their previous property five of the eight past years. This proof can be home owner insurance records, mortgage interest statements or property tax records.

The tax credit program is set to expire the end of April. Properties need to be under contract by April 30 and close no more than 60 days later. The first-time buyer credit is $8000.00 and move-up buyers recieve a $6,500.00 credit. There is “noise” today in Congress by some that want to extend these programs beyond their current expiration date.

Real Estate Headlines

My thoughts about today’s headlines in the real estate world.   Secure a Lender Quickly for Tax Credit Those house hunters looking to take advantage of the home buyer tax credit need to line up financing from lenders who work in a timely manner. My thought. This is probably a good idea. BUT, it is always a good idea, tax credit or no tax credit. Information learned from good financial counseling is invaluable in negotiating for property! Shadow Inventory Unlikely to Hurt Market Experts believe that strong investor demand for foreclosures will keep prices from falling more. My thought. By “shadow,” this writer means foreclosed! The idea that investors are licking their chops to purchase foreclosed real estate is stretching what we see in our market place! Buyer types are not usually the first consideration of a Seller when placing property on the market. Any way you cut it, all proerty, forclosed or otherwise, that is for sale at the same time as yours, is competition. A Seller should be mindful of any and all! Analyst Predicts Improvement in Home Building Dan Oppenheim, a home building analyst with Credit Suisse, believes 2010 will be a good year for building, though there are still strong threats to the housing recovery. My thought. This is one man’s opinion and there are as many oopinions available as there are people who will give one! For my building industry friends, I want this guy to be right. This might be one comback it would be safer to be “part of” rather than “lead.”   Any thoughts?

Five Reasons to Sell Now

 Selling a property in this tough market can seem like a challenge. Here are five factors that actually make this a good time to post a For-Sale sign.

Sell low and buy low. Because all property values are down, the loss on the property a home owner sells is really only a paper loss because the next property he buys also will be a bargain. If he buys smartly, when prices come back up in a few years, he’ll be in better shape. Down-payment help is widely available. While nothing-down loans have disappeared, it is easy to find down-payment assistance for lower-income and first-time home buyers. Programs vary all over the country, but one good way to find them is to search online for “down-payment assistance programs” and the name of your region.

Your uncle has money to share. Besides the $8,000 first-time home buyer tax credit and the $6,500 move-up credit, there are an array of energy tax credits that can make home improvements pay off in cash. Good help is available. Really talented real estate practitioners, contractors, and designers are available and eager for business. Interest rates would very well begin inching up as the end of next month approaches and brings with it the central bank scaling back its purchases of mortgage-backed securities

Source: McClatchy Tribune, Kate Forgach (02/07/2010); Terry Jacobs

What Are Your Plans?

The Wednesday morning edition of the Kerrville Daily Times, www.dailytimes.com, has a small block given to asking readers to let the paper know what they think they might do in a market like today’s? Buy, sell, rent? Of course, the reader’s who respond are left to their own perceptions as to what market conditions exist and I think it would be impossible to draw any scientific conclusions. None the less, the results, when and if they are published will be very revealing for those of us “in” the business. I would expect a better approach to getting out the word about real estate market conditions in our own area (real estate is local, after all) to be the number one lesson drawn from the results. Following closely will probably be the exposing of a large group of frustrated would be buyers who are not feeling the love of the local market prices as noted in national news media outlets. Values have dropped! But not at a west coast pace; and, while the tax credit is extended both time wise and in inclusiveness, the difficult maneuvering through a more complicated financing process still confronts would be homeowners and investors alike.

Seems to me this adds more impetus to seeking out the services of a true real estate professional. Sellers and buyers are both entitles to and should seek the benefits of representation when it comes to their dealing in today’s market place.

Would anyone care to post a response to the questions posed in today’s Daily Times and add comments? I would love to have direct input from you and offer help if you like.

FHA Relaxes Anti-Flipping Rule

Beginning Feb. 1, the Federal Housing Administration will provide mortgage insurance for some purchases in which the seller bought the property and held it for fewer than 90 days.
The agency is changing what is known as the “anti-flipping rule” to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes, says FHA Commissioner David H. Stevens.
Waiving the 90-day rule will encourage private investors to buy vacant properties, fix them up, and quickly sell them to buyers who will be eligible to buy them using FHA financing.

Source: Washington Post (01/30/2010)

Want to Buy the White House?

Have you ever thought about the market value of the property at 16 Pennsylvania Ave., Washington, D.C.? I have to admit it never crossed my mind! No one has said it is going to be listed for sale; but, I saw a report this morning that said the market value for the White House declined 5.1% in 2009. Let me know if you would like to have that kind of information about your area.

Houses Shrink, But Some ‘Must Haves’ Remain

Houses are getting smaller, according to data released last week by the National Association of Home Builders. The association said that the average size of a new home in 2009 was 2,480 square feet, down from 2,520 square feet in 2008. Despite smaller home sizes and tightening credits, there are still some features that are expected in new houses. Builders say the following are most likely to be standard in homes built in 2010:
Walk-in closets in the master bedroom.
Laundry rooms.
Insulated front doors.
Great rooms.
Energy-efficient windows.
Linen closets.
Programmable thermostats.
Energy-efficient appliances and lighting.
Separate shower and tub in master bathrooms.
Nine-foot ceilings on the first floor.
Source: MarketWatch, Steve Kerch (10/22/2010)

Building in our area seems to be in the higher price ranges and all these amenities are almost always included plus a more. We are just not seeing an increase in building or resale activity yet. I saw a report last night that suggested real estate as an industry you would not want to get into now! Thanks! Challenging markets are opportunities for those who can stick it out!

Mortgage Rate Expectations

Mortgage rates are lower than they have been in 40 years, thanks to the Fed’s purchase of mortgage-backed securities and a global consensus that U.S. inflation will remain low. Once the economy begins to recover, the Fed will stop purchasing mortgages and mortgage rates will increas. All this means that homes are more affordable than ever!