Stats & Trends - November 2009

The November 2009 residential highlights have been release from the Regional Multiple Listing Service (RMLS) and it shows some areas of improvement:

• Closed sales were up 72.4% compared to November 2008 (largest on record for the area)
  
• Pending sales rose 19.9% and new listings dropped 7% over the same period

And some areas of decline were noted:

• The average sales price was down 11.4% compared to November 2008
• The median sales price dropped a bit from October 2009 ($239,000 v. $245,000 in October)

Overall, the activity levels are up due in part to the extension and expansion of the Homebuyer Tax Credit which allows for and $8,000 first-time home buyer tax credit and a $6,500 move-up buyer tax credit.

The holidays are typically a slower time in real estate but tend to get busy once the New Year arrives so if you are thinking of making the move now may be a good time to start the ball rolling by contacting me to get a plan in motion.  Remember, even if you are outside the Portland metro area I can still help you by finding just the right professional to assist you.

Gearing Up for 2010

Have you begun to see the light at the end of the tunnel (otherwise known as 2008-2009)?  Based on the trends over the past six months and what the projections are for the upcoming six months it looks like the worst is over.  The residential markets are seeing more activity, inventory levels are dropping and prices seem to be stabilizing.

I'm no Carnac the Magnificent but I have a pretty good feel for how the market will react.  The first quarter of 2010 should remain stable with the Homebuyer Tax Credits of $8,000 for first-time buyers and $6,500 for move-up buyers fueling the surge.  Once the tax credits expire (April 30, 2010 is the deadline for being under contract) we should see a slight seasonal uptick.  What does this mean to you?  At some point the prices are bound to start going up.  Interest rates are at historic lows hovering near 4.75% and prices are at "OMG that's a great deal" levels.

This should tell you something.  Don't kick yourself in the butt 3-5 years from now because you didn't buy your first home, a move-up home or and investment property in one of the greatest buying opportunities you will see. 

I'm telling you now: DON'T WAIT! 

New Short Sale Guidelines Announced

The US Treasury Department has decided it is taking too long for short sales to be approved or rejected by mortgage servicers.  Several changes have been made and were announced last night that could greatly impact home owners facing foreclosure.

Realtors have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.
Among the changes designed to help homeowners:

• Mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt
• Borrowers would receive $1,500 for relocation expenses
• Mortgage servicers will receive a $1,000 incentive for completing a short sale and investors will receive incentives up to $1,000 for signing off on payments to subordinate lienholders.

The effective date has not been announced as of yet but I will make the leap and guess it will be right away.  This should help stem the tide of foreclosures and reassure homeowners that they have alternatives to simply letting their home go back to the bank.  By selling the home, even on a short, homes will have new owners living in them rather than remaining vacant for long periods of time.  This helps to stabilize neighborhoods and in the long run will help home values.

Top 10 Reasons to Sell NOW

1.  People who look for a home during the holidays are more serious buyers.
   
2. Serious buyers have fewer houses to choose from during the holidays, so you have less competition.
   
3. Houses "show better" when decorated for the holidays.
   
4. Buyers are more emotional during the holidays.
   
5. Buyers have more time to look for a home during the holidays.
   
6. Many people want to buy before the end of the year for tax reasons ($8,000 & 6,500 Tax Credit).
   
7. January is traditionally the month for transfers. Transferees can't wait until spring to buy. You must be on the market to capture that market.
   
8. You may still restrict showings during your personal family events.
   
9. You can always sell now, but specify a delayed closing or extended occupancy until early next year if you so desire.
   
10. By selling now you have an opportunity to buy during the spring, when many houses are on the market.

So What's The Bottom Line?

You may have fewer actual showings during the winter months, but more qualified and motivated buyers.
The reason is you have less competition, resulting in a quicker sale and a better price for you!

As always, I am here as your real estate resource, whether you live in my neighborhood or across the country.

Have a WONDERFUL holiday season!

Loan Modification Help

For homeowners who are being ignored by their banks regarding a loan modification, here is something I received from my in-house counsel at RE/MAX Equity Group that should help.

Call the Office of Controller of the Currency (OCC) 1-800-613-6743 or go to their website  http://www.helpwithmybank.gov/. They control the money to the banks. File a complaint.  You have 45 minutes to type and a few thousand characters only.  Within a few days you will get a call from the Bank President's Office. They get your information once and for all.  You get a letter that they have everything. Then you get a letter of forbearance with your new terms for period of 3 months. That's where we are now. If you stick to the plan you should get a new policy with these terms.

In other words, if you are trying to modify your loan and are getting nowhere fast with your current efforts - complain!  Make your bank hear you!  I would love to hear back from people that have gone this route and have successfully received a quick response.  Let me know!  If you need assistance with anything you know I am here to help.

Streamlining The Short Sale Process

When you owe more on your home than it is valued at and you need to sell you run into a situation called a Short Sale.  You've probably heard this term on the news or have read about it online or read it in the (gasp) newspaper.  If you are in the real estate business this term has been burned into your vernacular because of the slow economy and the decline in real estate values.

Short sales can be an arduous, forest-clearing (lots of paperwork), time consuming task.  The owner needs to fill out various forms, their Realtor needs to fax a ton of paperwork and makes lots of calls to the mortgage holder, and then everyone waits for a response from the bank.  And waits.  And waits.  And waits.  But maybe, this will all change shortly.  The US Department of the Treasury will be announcing plans shortly that should help to speed up the short sale process by quite a bit.

Now, the details are not out yet (and when they are I will let you know) but the main thing to focus on is that the it looks like the initial response time from the mortgage holder(s) may be cut down from weeks or months to 48 hours.  This is because the use of standardized forms and cash incentives to the mortgage holder will help streamline the process.  This is great news for all parties involved in a real estate transaction that is subject to a short sale.  A faster turnaround time, a possible allowance to help the seller move, and buyers that don't walk away from a short sale because it's taking too long to close.  As more information is released on this I will pass it on to you!

A Matter of Perspective

Have you decided to hold off selling your current home and buying a new one because your home may not be worth what it once was?  Why?  Investing in a down market can be very advantageous.

Suppose your home was worth $200,000 in 2008 but has lot 20% because of the sluggish economy.  That would make the value at $160,000.  I know you are thinking, "But I just lost $40,000.  How is this a good thing?".  Well, the same market that dipped your value 20% also caused the home you are going to buy to drop by the same amount.  It's all a matter of perspective.  So, let's say you want to buy a bigger home to accommodate the growing family (remember those two weeks last winter when no one could leave their home???).   The house that fits you perfectly was on the market in 2008 for $350,000 but because of the same sluggish economy, the price is now 20% lower at $280,000.  Taking the $40,000 you "lost" on the sale of your home and factoring in the $70,000 drop in purchase price of a larger home in the same market you now have a net gain of $30,000!  And, when the market recovers (and it will recover), your new home will appreciate at a higher dollar amount (10% appreciation on a $200,000 home is only $20,000 while 10% appreciation on a $280,000 home is $28,000).

You can choose to look at the market in one of two ways.  I say, let's look at it in a positive way.  As I said before...it's all a matter of perspective.

Investors Delight

A few years ago when someone would call my office from out of state looking for an investment purchase under $150,000 I had to tell them that there really wasn't any such thing in the Portland metro area.

Oh, how the times have changed.

As of this writing there are 232 single-family, detached homes currently available under $150,000 (35 of those being under $100,000).  There are also and additional 843 single-family, detached homes currently available between $150,000 - $200,000.

I know that not everyone is able to take advantage of these investment opportunities because they don't feel secure enough in their current job or have lost some of their investing zeal with the drop in the Dow.  But, if you are ready, willing and able to make the commitment to invest and hold for the long term you will be in a much better place years down the road when this recession has long been forgotten.

Expanding the Extension

While Congress vacillated on the finer points of modifying the Homebuyer Tax Credit, they did do the one thing that was necessary: they passed it!  Now, not just first-time homebuyers are eligible for a tax credit.  Move-up buyers now can get in the game if they meet certain requirements.  Take a look at the following explanation of how the newly revised tax credit could affect you (Tax Credit Info).  If you have even thought of getting into the real estate market to take advantage of these remarkable times please remember that you only have a limited time.  In order to qualify for the either the $8,000 first-time buyer tax credit or the $6,500 move-up buyer tax credit you need to be under contract to purchase a home by April 30, 2010.

Not only does this expanded version of the tax credit benefit a multitude of buyers its reach also extends to everyone involved in home building/remodeling all the way to appliance manufacturers, cable companies, home decor retail stores and carpet cleaners (just to name a few).

Interest rates are still below 5% for the majority of home loans and the requirements for loans now is different than it was just one year ago.  Make sure you talk with a professional about all your options.