Monday, April 29 2013
When the Wall Street Journal or Forbes run mortgage rate stories as their lead items, those of us who keep an eye on the local real estate market pay close attention. I frequently share what they say here. But when even the non-financial outlets like USA TODAY and the cable TV news channels give top billing to real estate market news, it’s a real attention-grabber.
That’s what happenedlast week. USA TODAY’s online headline focused on the 15-year fixed mortgage rate, “at a record low 2.61%.” The cable news channels talked about record low rates, too (although if you hit the ‘pause’ button long enough to read the TV graphics, you saw that the national average for 30-year loans was still a shade away from the actual record low).
Never mind that; it’s still surprising that mortgage rates continue to linger at such tempting lows.
The reason is hardly a secret: the Federal Reserve is holding rates down to energize the real estate market — a key element of the overall economy. Yet, with existing home sales notching up in the first quarter at the briskest pace in four years, you would have thought that mortgage rates would have been loosened up at least somewhat. And with new home sales doing their best since 2008…
Of course, it doesn’t matter what anyone expects: the results of dipping mortgage rates is just plain good news for everyone in theEvansvillereal estate market: buyers and sellers alike. Those low mortgage rates act to offset the rising U.S. house price index. The result for buyers is a more valuable home without the expected increase in the monthly payment. What more of an inducement to enter the real estate market could there be?
In short, if you’re considering whether it’s time to buy (or to sell your current home and trade up without busting the household budget), last week’s national and local market signs are even clearer than they have been recently. There are definitely opportunities out there! Why not give me a call for an up-to-the-moment real estate market evaluation for your property? You can reach me on my cell phone at 812-499-9234 or by email Rolando@RolandoTrentini.com
Tuesday, April 23 2013
Over the past few months, I have been pretty optimistic about real estate sales. I have shared statistics based on local information to support my opinions. This month I’m going to share some national and statewide information that demonstrates that the real estate market has indeed shifted into high gear.
First on a national basis, according to the S&P/Case-Shiller composite index, average sale prices have increased 8.1% over the past year. In addition, the housing price index posted its largest gain in the last seven years from January 2012 to January 2013.
I have spoken to several Realtor friends in other geographic areas and inventory shortages and multiple offers seem to be the norm, not the exception. In addition to the decline in listed inventory, shadow inventory, (delinquent mortgages, properties in foreclosure and bank owned property) is down 28% from its peak. This decline in pipeline properties will continue to suppress inventory levels.
On a statewide level, the news is also very positive. Over the past year:
· The number of closed home sales increased 18.4%
· The median sale price of those homes increased 4.5%
· The number of pending home sales increased 11.8%
· The number of closed home sales has increased year-over-year for 20 consecutive months.
· The median sale price has increased for 15 consecutive months
· The number of pending home sales has increased for 17 consecutive months.
Locally the big story is still listing inventory. As an example the number of active listings on the market has been as follows:
Local Housing Inventory
# of Active Listings:
January 2010 3,034
January 2011 2,839
January 2012 2,532
January 2013 2,247
The absolute number of active listings is lower than at any point in at least 7 years and the month’s supply is lower than all but one month in the past 6 years.
All of this is good news, so what does it mean for you? It’s “time to get back in the housing game!” If you are considering selling your house, list it now. We have the best tools to market, sell and get you the home you want at the right price. Please note that we provide a free market analysis on your home. To order yours, please call me at 812-499-9234 or email me at Rolando@RolandoTrentini.com
Thursday, April 18 2013
David R. Leopold, owner of Pillar to Post Home Inspection in Fairfield County, Conn., says home sellers and their real estate professionals have an important role in preparing for a home inspection to help ensure it goes smoothly. Leopold offers up some of the following tips in a recent article in RISMedia, including:
1. Don’t hide what isn’t working: If an appliance isn’t working, leave a note that indicates what isn’t working and how you’re getting it fixed. Don’t try to conceal defects because it can make the inspector start to view you as dishonest and wonder what else you’re hiding.
2. Make things accessible: Ensure the location of the attic and crawlspace are identified and easy to access. Don’t make a home inspector move your belongings in order to gain access.
3. Check the lightbulbs: If a lightbulb isn’t working, the inspector will need to determine if the fixture is inoperable. Save them time by making sure all the lightbulbs in the home operate, including those in the crawlspace, attic, and furnace rooms.
4. Note septic systems: If you have a septic system in the yard, be sure to leave a sketch that includes the location of it. It’ll avoid home inspectors, buyers, and real estate professionals having to conduct prolonged searches for it, Leopold says.
5. Keep appliances clear: Don’t leave dirty laundry in the washing machine or dryer because the inspector will need to test the appliances, and he doesn’t want to have to pull out dirty clothes in front of everybody, Leopold says. “Also, make sure your oven and stovetop are clear and clean, so we can easily test them without setting off the smoke alarm,” he adds.
Source: “Ask the Experts: What Should Home Sellers Do to Prepare for a Home Inspection?” RISMedia (April 16, 2013)
Monday, April 15 2013
According to the latest from the U.S. Census Bureau, renters comprise about 35% of all households. That’s a pretty healthy portion of the nation’s population — and a pretty encouraging market-share statistic for investors considering properties capable of generating income to build long-term wealth.
More than just an investment, the own-to-rent model is actually a simplified small business. It has a financing part, an accounting part, and (the time-consuming element): a management part. Effective management means dealing with labor (maintenance personnel), customers (the renters), and a Board of Directors (the ownership: in this case, you!). Not a surprise that many income property owners decide to make themselves the Board, and hire out the rest of property management.
Some business truisms point to sound reasons for that decision:
A local income property should let you be in control of your investment — not become a time slave to it. Some properties seem to want to be tough bosses themselves — with needs to be addressed on an unpredictable timetable. By employing a company specializing in local property management, you divert the 2 a.m. phone calls and headaches to them. Sleep tight!
As with any business enterprise, identifying and limiting risk is smart planning. A management company will help you work through Fair Housing obligations as well as the legal requirements you need to address. Even small mistakes in this department can cost, so prudently and professionally limiting liability is just good business.
Naturally, the major offsetting factor is cost. At somewhere in the neighborhood of 6%-12 of rental income, it is definitely an issue. Yet some veteran investors find that professional property management actually saves money in the long term. A reputable area property management company may be able to spot ways to reduce operating costs and maximize rental amounts, as well as shorten costly downtimes between tenants.
If you are looking to purchase an income property in our area, it’s important to assess all aspects of the investment — and property management is one that’s well worth investigating. I’m happy to offer vetted local references for my clients anytime. You can reach me in my cell phone at 812-499-9234 or by email Rolando@RolandoTrentini.com
Wednesday, April 10 2013
Lenders are more optimistic about the direction of the housing recovery, with 71 percent recently surveyed saying home prices are “rising at a sustainable pace,” according to a quarterly survey of U.S. bank professionals conducted by FICO.
Nearly 60 percent of the bankers surveyed say they expect the supply of credit for residential mortgages to meet demand over the next six months.
What’s more, 39 percent say they expect mortgage delinquencies to fall in the next six months, while 45 percent of those surveyed say they expect delinquencies to remain flat. According to FICO, that represents the most optimistic data on delinquencies in the 12 quarters since the survey began.
"The latest survey results, combined with data that indicates the real estate market is improving in many regions, paint a positive picture for a sector of the economy that has been slow to join the recovery," says Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. "Mortgage lenders have been understandably guarded over the past five years. The improvement in their sentiment should be welcome news, and I wouldn't be surprised to see lenders cautiously expanding their mortgage and home-equity lending businesses."
Monday, April 08 2013
Flooring is a major component of a house — and its real estate value.
Whether it’s carpet, tile, marble, or hardwood, the flooring of the home serves as an important financial and practical asset. Quality flooring can increase the home’s value, and it’s vital to take proper care of it.
Some ways to accomplish this:
Tile: Many people have tile in bathrooms, laundry rooms, and kitchens. However, the material is not limited to these areas and it’s important to maintain them. Particularly in high traffic places such as kitchens — regular maintenance is essential.
One way to maintain tile quality is to mix baking soda and water as a make-at-home cleaning option, or simply find a cleaner with a very neutral pH level.
With tile, it’s crucial to avoid harsh and abrasive chemicals. They can alter the polish and stain the tile.
Carpet: If you have carpet in your house, make sure to keep up on the cleaning. This floor material is very dependent on the environment of the house. Do you have pets? Do you live in a climate with snow? Do you have children? Is your kitchen table on carpet?
There are so many factors that this category is going to naturally be subjective, but the principle is the same: Stay up to date, regardless of how often it’s required.
Carpet in nice condition not only makes a house more comfortable, but helps hold the value of the house together.
Marble: Due to its permeability, marble doesn’t react well to acid, the care of marble floor is extremely important in holding not only value, but appearance. Stained marble is very noticeable and unattractive in a house.
It’s best to mop with strictly warm water and be gentle. With marble floorings, it’s even more imperative to regularly clean, as dirt can — and will — scratch the surface.
Inside each door, make sure to have a mat. These small practices can go a long way in maintaining the surface and increasing longevity.
Hardwood floor: Similar to marble, it’s important to maintain hardwood floor. If this type of material isn’t regularly and correctly cleaned, seals break and cleaning then becomes detrimental as water seeps in the cracks.
This is a very common floor material option for home owners across the country, and it’s easy to tell when an area of wood floor is cared for. A neutral product is best when mopping and make sure to sweep the floor before cleaning to avoid dragging sediments around the finish.
The flooring of a house covers the entire walkable surface, and it’s important to keep it clean. Flooring is an expensive and significant part of a property, and it should carefully be looked after. Don’t underestimate how well-maintained flooring can help home owners maintain their home’s value during resale.
Friday, April 05 2013
Changes in the availability and pricing of technology have brought the "smart home" from the richest tiers of homeownership to a quickly growing group of users.
According to the Atlanta Constitution-Journal, smartphone and tablet apps let homeowners "turn lights on and off, let in a delivery person or see whether their kids are doing their homework — from anywhere in the world."
The Digital Life system developed by AT&T Mobility, now available in eight markets, lets you do everything from operate the garage doors to make sure your children are doing their homework, company executives say. And Comcast's XFinity package offers features from home security to Internet features like Facebook and Internet radio service Pandora on your TV.
Insurance companies are even getting into the act, giving users of these systems discounts on their insurance, with the amount based on the type of monitoring service and features, industry officials say.
"The moment that the savings are really showing (on insurance and utility bills), that's when this really becomes a no-brainer," says telecommunications analyst Roger Entner.
Source: "New technology monitors home from phone" (Chicago Tribune, 3/31/2013)
Thursday, April 04 2013
February pending home sales flattened with limited buyer choices, but remained at the second highest level in nearly three years, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 0.4 percent to 104.8 in February from a downwardly revised 105.2 in January, but is 8.4 percent higher than February 2012 when it was 96.6. Contract activity has been above year-ago levels for the past 22 months; the data reflect contracts but not closings.
Before January, the last time the index showed a higher reading was in April 2010 when it was 110.9, shortly before the deadline for the home buyer tax credit.
Lawrence Yun , NAR chief economist, said limited inventory is holding back the market in many areas. "Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels," he said. "Most local home builders are small businesses and simply don't have access to capital on Wall Street. Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market."
The PHSI in the Northeast declined 2.5 percent to 82.8 in February but is 6.8 percent above February 2012. In the Midwest the index rose 0.4 percent to 103.6 in February and is 13.2 percent higher than a year ago. Pending home sales in the South slipped 0.3 percent to an index of 118.8 in February but are 12.1 percent above February 2012. In the West the index increased 0.1 percent in February to 101.4 but is 0.8 percent below a year ago.
Yun projects existing-home sales to rise about 7 percent in 2013 to approximately 5 million sales, which is near the current level of activity. "The volume of home sales appears to be leveling off with the constrained inventory conditions, and the leveling of the index means little change is likely in the pace of sales over the next couple months," he said.
The national median existing-home price is forecast to rise nearly 7 percent this year, while mortgage interest rates should remain historically low, but trend up slowly and reach 4 percent in the fourth quarter.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visit www.houselogic.com and http://retradio.com.
Tuesday, April 02 2013
More home owners are planning to renovate their houses this year, according to Houzz, a remodeling Web site. The company recently surveyed approximately 100,000 home owners, and 53 percent of them reported that now is a good time to remodel.
More home owners getting motivated to increasing the values of their houses by improving the “look, flow, and layout” of these residences.
The most popular renovation projects were centered around bathrooms and kitchens. Twenty-eight percent said they were planning a bathroom remodel or addition, while 23 percent of those surveyed said they were planning a kitchen remodel or addition in the next two years. Over the last five years, home owners have spent $28,030 on average to remodel their kitchens, according to the Houzz survey.
Source: “Interest in building, remodeling homes picks up,” Inman News (March 28, 2013)