Archive for January, 2012

Supply Of New Homes At 6.1 Months Nationwide

January 31, 2012

New Home Supply 2010-2011

New Home Sales slowed into the New Year but the market for newly-built homes remains strong. For home buyers in California and nationwide, December’s New Home Sales report is yet one more signal that the housing market recovery may be underway.

According to the Census Bureau, the number of new homes sold in December 2011 slipped 2 percent to 307,000 units on a seasonally-adjusted, annualized basis nationwide.

A “new home” is a home that is considered new construction; a home for which the buyer will be the first owner and tenant.

As compared to December 2010, last months’ sales volume fell seven percent. It’s a statistic that suggests housing market weakness. However, in looking at a different component of the New Home Sales report — the supply of homes for sale — we’re forced to reconsider.

At the current pace of sales, every new home for sale nationwide would be “sold” in a matter of 6.1 months. 

Economists believe that a 6.0-month supply defines a market in balance — anything quicker is termed a “seller’s market”. Statistics like that are enough to create urgency among today’s Oceanside home buyers. 

Unfortunately, the Census Bureau’s data may be wrong.

Although December’s New Home Sales report shows sales down 2 percent, the government’s data was published with a ±13.2% margin of error. This means that the actual New Home Sales figure may have been as low as -15.2 percent, or as high as +11.2 percent. And, because the range of possible values includes both positive and negative numbers, the Census Bureau had no choice but to assign its December data “Zero Confidence”.

It will be a few months before final revisions are made to December New Home Sales data. Until then, therefore, buyers should take cues from the market-at-large and the market-at-large hints at recovery. One example of this is homebuilders showing more confidence in their product than at any time in the last 5 years.

If your plans for 2012 call for buying new construction, therefore, consider using this lull to “make a deal”. As the year progresses, the great values in housing may be gone.

: Housing Analysis
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5 Simple Ways To Declutter Your Home

January 30, 2012

Declutter your home to help it sell fasterWhen a home is listed for sale, its “clutter” can be the difference between a rapid sale and no sale at all.

Clutter, in its strictest sense, is defined as anything untidy; or in a disorderly state. In real estate, the term is broadened to include unnecessary furniture pieces; unwieldy artwork or collections; stacks of papers and/or magazines; and anything that otherwise restricts the open flow of a home’s floor plan.

In other words, clutter is anything that distracts from your home’s natural footprint.

As a home seller in San Marcos , understanding how your home’s clutter can affect a buyer is paramount to helping your home sell faster, and at a higher contract price.

First, there’s the psychological angle. A potential home buyer may see clutter and think “mess”. Few people want to buy a house they find messy or otherwise disorganized.

Second, there’s the practical angle. A home that appears full of “things” also appears as if its lacking in storage space. This, too, can turn off buyers.

When you list your home for sale, here are basic tips to de-clutter your home. Some of this advice may not be practical with respect to your home, in particular, so make sure to ask your real estate agent for follow-up help.

  1. In each room, remove photos, trophies, plaques and other personal items on display.
  2. Remove large collections such as dolls, cars, miniature cans, and the like.
  3. Remove worn throw rugs
  4. Remove items from kitchen countertops, including small appliances
  5. Remove items from bathroom countertops

You should also consider removing distinctive artwork from your walls, or replacing pieces with items that are more bland.

The over-reaching goal of de-cluttering is to depersonalize and neutralize your home so a buyer can visualize himself/herself living there. De-cluttering your home can also make your home appear larger, accentuating the features of each room. 

It’s no wonder that minimally-cluttered homes tend to have a wider appeal among buyers.

: Around The Home
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HUD offers services to public in 175 languages

January 21, 2012

HUD recently announced the launch of the HUD Language Line, a telephone language service pilot that will offer live, one-on-one interpretation services in more than 175 languages. Accessible throughout the nation, the language line will help HUD staff to better communicate with Limited English Proficient (LEP) individuals and families about HUD housing programs, services, and activities.

The pilot program will run through September 2012. HUD staff across the nation will be able to use the HUD Language Line to provide non-English-speaking individuals and families with information about fair housing, homeownership, lead abatement, housing assistance, and other HUD programs and services. When a person with limited English proficiency contacts the Department, the HUD staff person taking the call will contact the Language Line and speak with a live operator, who will connect the caller and HUD staff person with an interpreter who speaks the caller’s language.

HUD also offers a Limited English Proficiency website to promote equal access to housing programs by providing important HUD documents in 18 different languages. HUD’s expanded LEP website features factsheets, housing brochures and other HUD forms in Amharic, Arabic, Armenian, Cambodian, Chinese, Creole, Farsi, French, Hmong, Khmer, Korean, Lao, Polish, Portuguese, Russian, Spanish, Tagalog, and Vietnamese, in addition to English.

The site offers brochures on fair housing, model lease agreements, information about HUD’s Housing Choice Voucher Program (Section 8), and Resident Rights and Responsibilities. The larger LEP initiative is in response to Executive Order 13166, which requires all federal, local and state agencies that receive federal funding to ensure that people with limited language skills have meaningful access to government programs and services.

: Real Estate News
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Behind The Housing Starts Headlines, The Story That Matters

January 20, 2012

Housing Starts 2010-2011

When it comes to housing data, sometimes you have to look past the headlines. December’s Housing Starts data offers a terrific illustration of why.

Each month, the Census Bureau tallies Housing Starts for the month prior. A “housing start” is a home on which construction has started.

The Housing Starts report is separated by property type. There is a count for single-family homes; a count for 2-4 unit homes; and a count for buildings of 5 units or more, a category including apartments and condominiums.

In December, as reported by the government, Housing Starts fell 4 percent nationwide overall. This runs contrary to recent strength in housing and the story was quickly picked up by the press :

Now, although these headlines are factually true, they’re also are a little bit misleading.

Housing Starts did fall 4 percent last month but that was for all Housing Starts, across all three property types. Data like this is somewhat irrelevant to home buyers in California or anywhere else nationwide.

Few buyers purchase 2-4 unit homes, and almost nobody purchases an entire apartment building. Rather, it’s the Housing Starts reports’ “single-family” tally that matters because that’s the home type that the majority of home buyers purchase.

In December, for the fourth straight month, Single-Family Housing Starts increased.

Single-family housing starts climbed 4 percent last month to 470,000 units on a seasonally-adjusted, annualized basis. This is the highest number of Single-Family Housing Starts since April 2010 — the last month of last year’s home buyer tax credit.

The Single-Family Housing Starts data is the latest in a series of data that point to a housing rebound nationwide. New Home Sales, Existing Home Sales, Pending Home Sales and Homebuilder Confidence has each posted multi-month highs and all are poised for strong gains into 2012.

If you’re planning to buy a home in 2012, consider buying in between now and March rather than at some point later. San Diego home prices — and mortgage rates- are likely to move higher.

: Carlsbad Real Estate, Housing Analysis, Oceanside Real Estate
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Foreclosure Filings Fall To 49-Month Low

January 18, 2012

Annual Foreclosure Change, Top 10 States, December 2011

Foreclosure filings are fewer these days, according to foreclosure-tracking firm RealtyTrac.

In December 2011, the number of foreclosure filings nationwide fell 9 percent from the month prior. Not since November 2007 has foreclosure activity been this sparse across the country.

The drop does not appear to be seasonal, either.

Last month’s foreclosure filings were down 20 percent from December 2010 with “foreclosure filing” defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession. As a result of a unexpectedly strong year-end, 2011′s annual foreclosure rate was the lowest in 4 years.

One reason why the year may have closed so strongly is that Nevada, California, Michigan and Arizona — four states typically associated with high rates of foreclosures — each posted big drops in foreclosure filings between November and December, plus double-digit drops between December 2010 and December 2011.

In fact, among the country’s top 10 states for foreclosure activity, nine showed an annual foreclosure filing reduction.

Only Delaware worsened.

It’s also noteworthy that just 4 states accounted for half of last month’s total foreclosure filings.

  • California : 25.8 percent of all foreclosure filings
  • Florida : 12.0 percent of all foreclosure filings
  • Michigan : 6.4 percent of all foreclosure filings
  • Illinois : 6.2 percent of all foreclosure filings

Foreclosures are heavily concentrated, in other words. By contrast, the last 1% of activity is spread across 14 states.

As a Oceanside home buyer — first-timer or investor — foreclosures can be a great way to find value.

According to the National Association of REALTORS®, distressed homes typically sell at “deep discounts“ as compared to like, non-distressed homes. However, when you buy a foreclosure home from a bank, it’s different from buying a home from a “person”. Purchase contract negotiations are different and months may pass before your closing is approved.

If you’re buying foreclosure, therefore, seek the help of a professional real estate agent. Real estate agents have experience working in the process-heavy world of foreclosures and can help you come out ahead.

: Carlsbad Real Estate, Housing Analysis, Oceanside Real Estate
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Will Home Values Rise This Year

January 13, 2012

Will your home gain value over the next 12 months? Nobody can know for sure, of course, but should recent housing trends continue, there’s concrete cause for optimism.

The housing economy has suffered since 2007, knocking home values down nearly 20% nationwide. And while some areas have fared better as compared to others but, in general, home values are down. 

Mortgage rates are down, too, and that’s good news for buyers in Carlsbad. The combination of low rates and low prices has led home affordability to an all-time high. As you’ll hear in this 4-minute interview with NBC’s The Today Show, carrying a mortgage costs 25% less per month as compared to just 3 years ago.

Some other notes from the interview include :

  • There are more buyers out looking for homes today, which leads to more sales
  • The housing market is expected to get gradually better, month-by-month, in 2012
  • Foreclosures will continue to be a big part of the housing market

With housing supplies shrinking, buyers throughout California may find their best “deals” today — before the Spring Buying Season begins in February.

However, we can’t forget that housing markets are local — not national. Each town and neighborhood has its own market drivers and prices where you live may have already started to climb.

For accurate, up-to-date data on the housing market, talk with a local real estate agent. 

: Personal Finance
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Fed Minutes Show An Improving U.S. Economy Threatened By The Eurozone

January 12, 2012

FOMC Minutes December 2011The Federal Reserve has released the minutes from its most recent Federal Open Market Committee meeting. The Fed Minutes are a detailed meeting recap; the companion piece to the more brief, more well-known press release.

As a comparison, the minutes of the last FOMC meeting contained 60 paragraphs and 7,027 words. The post-meeting press release was just 5 paragraphs and 382 words.

December’s Fed Minutes shows Fed members with a positive, cautious, take on the economy.

Recent data suggests that the U.S. economy is expanding, the Fed said, but “strains” in global financial markets pose “significant risks” to the downside. This tell us that the Fed believes its economy-stimulating programs are working, but that officials remained concerned by events in the Eurozone.

The U.S. economy could be impacted by fallout.

Other meeting consensus included :

  • On growth : The economy is expanding, despite slowing in “global economic growth”
  • On housing : Data suggests the “depressed” market “could be improving”
  • On inflation : Prices are stable, and remain within tolerance levels

The Fed’s analysis was of little surprise to Wall Street, and going forward, Fed Chairman Ben Bernanke wants to keep it that way. The Fed Minutes contained a passage regarding market communication, and how the Fed will be more pro-active about it in the future.

With the release of its minutes, in a section called “Market Policy Communications”, the Federal Reserve showed its plans to release 4 times annually its economic forecasts, and plans for the Fed Funds Rate. This signals in a shift in Federal Reserve transparency.

The Federal Reserve will begin including the forecast in its economic projections beginning after its next policy meeting, January 24-25, 2012.

Mortgage rates in California were little changed after the release of the Fed Minutes.

: Federal Reserve
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Home Affordability Set To Worsen On Thursday’s Retail Sales Data

January 11, 2012

Retail Sales Growth (2008-2011)

Consumer spending continues to rise nationwide, fueled by jobs growth and a rosier outlook for the U.S. economy. Unfortunately for mortgage rate shoppers |*STATE in % STATE**|, it may also lead to higher mortgage rates later this week.

Thursday morning, the Census Bureau will release its U.S. Retail Sales data for December. The report is expected to show an 18th consecutive monthly increase, with analysts projecting sales volume higher by 0.4 percent from November.

This would be double the increase from last month, which saw a 0.2 percent increase in Retail Sales.

The Retail Sales report tallies receipts collected by retail and food-service stores nationwide. When the sum of these receipts rise, it puts pressure on mortgage rates to do the same. The connection is straight-forward.

Retail Sales are the largest part of “consumer spending” and consumer spending accounts for the majority of the U.S. economy — up to 70 percent, by some estimates.

As the economy goes, so go mortgage rates.

Remember: today’s ultra-low mortgage rates have been partially fueled by weak economies — both domestic and abroad — going back 4 years. Stock markets have sold off as economies have faltered worldwide, leading investors to seek refuge in the relative safety of U.S.-backed mortgage bond market. The new-found demand for mortgage-backed bonds has helped drop mortgage rates to levels never seen in history.

When economic recovery is apparent, therefore, we should expect a mortgage rate reversal, and should expect for it to happen quickly. Stock markets should rise; bond markets should fall. Mortgage rates will climb. Rate shoppers will lose.

Last week’s strong jobs report sparked hope for the U.S. economy. If Thursday Retail Sales data reveals similar strength, the risk in “floating” your mortgage rate may be too great. The safer play is to lock your rate today.

The Retail Sales report will be released at 8:30 AM ET.

: The Economy
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Lock Your Mortgage Rate New Loan Fees Expected Within Days

January 10, 2012

Payroll tax fees for new loansStarting soon, nearly all home buyers and refinancing households throughout California and nationwide will pay higher mortgage loan fees. Congress has made it law.

13 months ago, as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Congress enacted a one-year cut to FICA payroll taxes.

FICA stands for Federal Insurance Contributions Act. Taxes collected under FICA fund such programs as Social Security and Medicare.

The stimulus plan temporarily lowered tax rates for salaried workers from 6.2% to 4.2%; and for self-employed persons from 12.4% to 10.4%. Effective January 1, 2012, “regular” tax rates were to return.

That is, until late-December 2011. In one of its last moves of the year, Congress passed a temporary, two-month extension to the payroll tax cut, extending it through February 29, 2012. The expected cost to the U.S. Treasury is $33 billion.

To recoup those costs, Congress has turned to Fannie Mae, Freddie Mac and the FHA.

Each entity has been ordered to collect news fees on each new mortgage is backs, and has been told to forward said fees to U.S. Treasury directly. There’s no “workaround” allowed or forgiveness applied — each new loan is subject to the payment.

The rules are listed on page 17 of the law’s final draft, in a section unambiguously titled “Title IV — Mortgage Fees and Premiums”.

According to the law :

  • Fannie Mae and Freddie Mac must collect an average fee of no less than 10 basis points (0.1%) per new loan
  • The FHA must raise its monthly mortgage insurance premiums 10 basis points for all new loans

The expected cost to consumers is no less than $10 monthly per $100,000 borrowed. Some analysts, however, expect Fannie Mae and Freddie Mac to collect more than is minimally required. This could add an additional $30-50 to your monthly mortgage payment per $100,000 borrowed.

Therefore, if you’ve been shopping for a home or for mortgage rates in Oceanside , take advantage. Within days, lenders are expected to start collecting Payroll Tax Extension fees from mortgage applicants — a move that will cost you money.

Lock today to avoid the big fees. Save yourself money.

: The Economy
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How To Clean Your Microwave Without Harsh Chemicals

January 9, 2012

Clean microwaves, organicallyMicrowaves are often well-worn. Spills and splatters dot their ceilings; splattered food stuffs line their walls.

To clean your microwave, you can use the harsh chemicals on sale at supermarkets and hardware stores, or you can apply an all-natural approach which yields the same results, with only slightly more preparation time.

The extra time may be worth it, too, considering that the chemicals of an over-the-counter cleaner may seep into your foods over time.

To keep your microwave fresh and clean, using organic materials only, here’s what to do :

  1. Unplug your microwave from the wall for safety.
  2. Gather a microwave safe bowl; 1 1/4 cups of water; a lemon; baking soda; white vinegar; and cleaning cloths.
  3. Slice the lemon and place the slices into your bowl. Add the water.
  4. Heat the bowl in the microwave for 7 minutes. Leave the microwave door closed for an additional 5 minutes.
  5. Remove the bowl (CAUTION : Bowl will be hot).
  6. Remove the microwave’s glass cooking surface and wheel system. Hand wash and set aside to dry.
  7. Dip a clean cloth in the lemon water mixture.
  8. Wipe down the microwave’s exterior and interior surfaces, remoistening the cloth as required.
  9. Moisten a clean cloth with vinegar. Wipe down the microwave door’s interior surface.
  10. Replace glass and wheel system, and plug the microwave back in to the wall.

If you find lingering stains in your microwave, mix baking soda with water to form a thick paste. Dip a corner of your cleaning cloth into the paste and apply it to the stain directly, gently rubbing in a circular motion until the stain is gone.

Microwaves should be cleaned at least once weekly for optimal performance.

: Around The Home
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