A Big Threat to the Spring Housing Market

Or what should be, is a sign saying… “Home Sellers Wanted”!

Daily Real Estate News | Friday, February 27, 2015

<!–

–>

Low inventories of homes for-sale threatens to dampen the spring selling season this year. Nearly 9 percent fewer homes were for sale in January of this year than a year ago, according to realtor.com® housing data. The tight inventories may mean buyers will face sticker shock with home prices.

“January’s inventory data suggest a continuation of the tightening trend we identified last month in the December data, and with a shortage of inventory typically comes increased home prices,” says Jonathan Smoke, chief economist at Realtor.com. “Half of the 200 markets realtor.com tracks experienced year-over-year price increases of at least 6 percent in January.”

The National Association of REALTORS® reported this week that January existing-home sales plummeted nearly 5 percent year-over-year, a nine-month low.

“This is a notable speed bump,” says Lawrence Yun, NAR’s chief economist, Lawrence Yun. He says home sales should be higher given the recent pick ups in the economy and job market and rising rental costs.

But despite the higher buyer demand, he says the weak supply has become a big issue.

Housing inventories are down by some of the largest amounts year-over-year in Las Vegas; Key West, Fla.; Colorado Springs, Colo.; Palm Bay, Fla.; and Columbus, Ohio, according to realtor.com’s January National Housing Trend Report. (Read: Inventories Tighten Up Again)

“Typically for a home seller in the past, they live in their home for seven years and then make a move,” Yun says. “Now we’re seeing home sellers are living in their home for 10 years

Are you looking to Sell and think that waiting will be better?

Not necessarily, not with inventory being as tight as it is.

Call me to find out your options and home market value.

Paula Allin – HomeSmart Professionals

401-241-2976 or PaulaSoldit@cox.net

Check out current market trends on my website: http://www.PaulaAllinRealEstate.com

Look for the “Market Insider” tab

Solid Start to the Year for Rhode Island Home Sales

Warwick, RI, February 26, 2015…The momentum that began building in Rhode Island’s housing market toward the end of last year has carried into this year, according to the Rhode Island Association of Realtors.  The median price of single family homes rose six percent in January from 12 months earlier to $206,000 and sales activity rose three percent.  The number of sales under contract also increased four percent, indicating that the market’s boost in activity won’t end any time soon. “If you’re someone who is ready and able to buy, you couldn’t ask for better conditions.  There’s a good supply of homes for sale that are priced well and mortgage rates are fantastic.  In many cases, it makes more financial sense to own rather than rent right now,” said Bruce Lane, 2015 President of the Rhode Island Association of Realtors. At $207,500, January’s median sales price in the condominium sector was even higher than that of the single family homes market.  Though median price remained stable, rising just one percent from a year earlier, sales activity dropped five percent.  Pending sales of condominiums also decreased ten percent last month, an indication that sales activity in the condo market may remain sluggish in the next few months. The investor-driven multi-family market showed the most significant gains in January.  Median selling price rose to $141,000, a 13 percent gain from January, 2014.  Even with the double digit rise in median price, sales activity flourished, rising 15 percent from a year earlier. All three property types are slightly oversupplied for the market place, tipping the scales slightly in favor of buyers.  The single and multi-family markets have a seven-month supply of homes for sale, while the condo market has a supply of more than eight months.  A six-month inventory is considered a housing market that is evenly balanced between seller supply and buyer demand.

Bruce Lane 2015 REALTOR® State President January 2015 Single Family Sales By Town —————— January 2015 Single Family Monthly Sales Comparison —————— January 2015 Multi Family Monthly Sales Comparison —————— January 2015 Condo Monthly Sales Comparison

About the Rhode Island Association of REALTORS® The Rhode Island Association of REALTORS®, the largest trade organization in Rhode Island with approximately 4,000 members in nearly 750 offices, has been serving Rhode Islanders since 1948. Advocating for Rhode Island ‘s property owners, the Rhode Island Association of REALTORS® provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property. The Association is one of more than 1,437 local boards and associations that comprise the National Association of REALTORS® (NAR). The National Association of Realtors®, “The Voice for Real Estate,” is America ‘s largest trade association, representing over 1.2 million members involved in all aspects of the residential and commercial real estate industries. REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.

Raise Your Home’s Value Instantly

 Your real estate professional is advising you to declutter, stage your home, plant new flowers, and make repairs and updates. You may be reluctant because of the costs, but according to HomeGain, your real estate agent is giving you sound investment advice that can actually make you more money when you sell your home.

Through its Home Sale Maximizer feature, HomeGain, an agent referral website, identified the top 10 home improvements under $1,500 that add the most to home sellers’ bottom line, as recommended by real estate professionals across the nation.

The top 10 home improvements are listed by the greatest return on investment (ROI):

1. Cleaning and de-cluttering ($290 cost / $1,990 price increase / 586% ROI)

2. Lightening and brightening ($375 cost / $1,550 price increase / 313% ROI)

3. Home staging ($550 cost / $2,194 price increase / 299% ROI)

4. Landscaping ($540 cost / $1,932 price increase / 258% ROI)

5. Repairing electrical or plumbing ($535 cost / $1,505 price increase / 181% ROI)

6. Kitchen and bathroom ($1,265 cost/$3,435 price increase/172% ROI)

7. Replace or shampoo carpets ($647 cost/$1,730 price increase/169% ROI

8. Paint interior ($1,012 cost/$2,112 price increase/109% ROI)

9. Repair floors ($931 cost/$1,924 price increase/107% ROI)

10. Paint exterior ($1,467 cost/$2,222 price increase/51% ROI)

What’s interesting is how consistently listing agents recommended the same home improvements. Nearly 100% of listing agents recommend cleaning and de-cluttering, while 97% recommended lightening and brightening and 80% recommended staging. These top three categories cost just a little over $1,000, yet netted sellers as much as $5,734 at closing.

As defined by HomeGain, the top three money-makers for sellers are:

Cleaning and decluttering: Remove personal items; wash and clean all areas inside and outside of house; freshen air; remove clutter from furniture, counters and all areas of the home; organize closets; polish woodwork and mirrors, etc.

Home staging: Add fresh flowers; remove personal items; reduce clutter; rearrange furniture; add new props or furniture to enhance rooms; play soft music; hang artwork on walls, and more.

Lightening and brightening: Open windows; clean windows and skylights inside and outside; replace old curtains; remove other obstacles from windows that block out light; repair lighting fixtures; make sure windows open easily, among other suggestions.

It takes money to make money, and that’s never been truer than when you’re selling your home.

Let’s get it done!

Call me: Paula Allin – HomeSmart Professionals

Cell #: 401-241-2976 or email: PaulaSoldit@cox.net

Check out Market trends on my website: http://www.paulaallinrealestate.com/mimarket/zip/02822/

 

Written by Blanche Evans on Wednesday, 18 February 2015 10:00 am  

I Have Unpaid Debt on My Credit Report. Can I Still Get a Mortgage?

Now is a perfect time to get together with a Loan Officer to see what your whole credit picture looks like. Are there and derogatory reports lingering? Is there anything on your credit report that you were unaware of? It’s a great time to find all of that out so you can move when the time is right!

Also, even if you don’t think you are “credit worthy” of purchasing a home for yourself, you may be surprised by your score (in a good way) and how simple it is to repair (with the right direction) once you are aware of everything.

Just like you don’t need perfect credit to land a home loan, you don’t need to be debt-free, either. Credit card bills, collections and charge-offs – you can have some or all of these and still make a mortgage work.

Of course, it’s never quite that simple. It’s often a question of what kind of debt, how much you have and what type of lenders and loan types you’re considering.

Lenders can have different requirements and caps for things like debt-to-income ratio and derogatory credit. Here’s a closer look at how your bad debts can come into play during the home loan process.

Looking at Your Debt-to-Income Ratio

This is a big metric in the mortgage industry. Lenders may calculate two different ratios, one that looks only at the relationship between your potential housing costs and your gross monthly income and another that considers your total monthly debts and payments. You’ll hear these called “front-end” and “back-end” ratios.

Lenders will typically pull in your major monthly debts from your credit reports, including things like student loan payments, car loans and, of course, the new mortgage payment. But they can also include expenses that don’t hit your reports, like childcare, child support or alimony.

In December, the average back-end DTI ratio for a conventional purchase loan was 34%, according to Ellie Mae. For VA loans, it was 39%, and for FHA purchases it was 47%.

DTI caps will vary by lender, loan type and more. Generally, conventional borrowers usually encounter a max 50% DTI ratio, while VA and FHA borrowers may be able to push to 65%.

But remember these kinds of figures represent a ceiling – you’d need an incredibly strong loan application (sterling credit, solid assets and more) in order to close with DTI ratios that high. But it is possible.

How Much House Can You Afford?Before you consider buying a home, check out how much you can afford. Plus, see how changes in your finances will affect the result.
Find Out Now >>>

Dealing With Derogatory Credit

Lenders may also have a cap on the total amount of derogatory credit you have. This is a blanket term that can include things like collection accounts, charge-offs, liens and judgments.

Whether it’s $5,000, $20,000 or more, these caps can vary by lender. They may offer exceptions or give additional breathing room for things like medical collections or bad accounts that borrowers are actively trying to repay.

Lenders don’t typically factor collections and charge-offs into your DTI ratio calculation unless you’re actively making payments on those accounts. In fact, some lenders will essentially ignore a collection if you can show at least a 12-month history of on-time payments.

Charge-offs are debt accounts at least six months past due that creditors have for accounting purposes deemed unlikely to be paid. Some lenders will count charge-offs toward their bad credit cap, while others ignore them.

Much like with DTI ratio, lenders may grant exceptions for derogatory credit if a borrower has solid compensating factors.

Tax liens and judgments will usually need to be paid or otherwise satisfied before a loan can close. Prospective borrowers with a tax lien may still be able to move forward if there’s a repayment plan in place and at least 12 months of on-time payments. Lenders will also count those payments toward your DTI ratio.

High debt levels, tax liens and other financial issues are all likely to complicate your homebuying picture. They’ll usually mean additional scrutiny from lenders, which often translates into tougher requirements and the need for an otherwise stellar application.

The other consideration is whether it really makes financial sense to stretch your debt burden even further with a home loan. To be sure, DTI ratio doesn’t tell the full picture when it comes to mortgage affordability. (You can get an idea of how much house you can afford using this calculator.)

Make sure you’re putting yourself on solid financial footing regardless of what a lender’s exceptions and guidelines allow. It can help to start pulling your credit reports and credit scores far in advance of when you know you want to buy so you can assess your credit standing, and create a plan to improve it over time. You can get your free annual credit report from each of the major credit reporting agencies. You can also get a free credit report summary, updated monthly, at Credit.com.

Would you like some help deciphering all of this?

Contact me: Paula Allin – HomeSmart Professionals

401-241-2976 or PaulaSoldit@cox.net

I work with several lenders that are in the business of helping people get their credit in order to move forward into their dream of homeownership. Give me a call, I can help!

http://www.PaulaAllinRealEstate.com

The Best Seasons to Sell a Home

I thought that this article was interesting. Especially in light of the fact that everyone seems to think that Spring is the best time to Sell or Buy.

 

Daily Real Estate News | Monday, February 09, 2015

<!–

–>

Spring is traditionally considered the best season to list a home, but it doesn’t inch out the other seasons by much, according to a new analysis

 

Redfin’s research team analyzed 7 million homes listed from 2010 through 2014 to gauge how important the season is in listing a home. It examined how many of the homes went under contract within 30 days and how often they sold for more than their list price.

Here’s how the seasons stacked up:

• 39% of the homes listed in the spring (between March 21 and June 20) in the past five years went under contract within 30 days, and 15 percent sold for more than the list price.
• 38% of homes listed in the winter (Dec. 21 – March 20) sold within 30 days and 14 percent sold for more than the list price.
• 36% of homes listed in the summer (June 21 – Sept. 20) were under contract within 30 days and 12 percent sold above the list price.
• 34% of homes listed in the fall (Sept. 21 – Dec. 20) went under contract within 30 days and 11 percent sold at a premium.

“Just as buyer demand follows a seasonal pattern, so do home prices,” says Nela Richardson, Redfin’s chief economist. “Over the past five years prices have increased by an average of 3 percent month over month in the spring and ticked down by about 1 percent each month during the fall. To get the best of both worlds, sellers need be informed on both local buyer demand and recent sale prices in their neighborhoods before deciding when to list their homes and for what price.”

Regardless, the report noted that there doesn’t appear to be a huge advantage or disadvantage to listing in any season, since the variance in prices is only by a few percentage points.

Also, the best season to sell can vary greatly by market. For example, in Los Angeles, Orange County, San Diego, and San Francisco, spring and winter were tied for the best home-selling performance. In Sacramento, Calif., winter beat out spring with 10 percent of listings in the winter under contract within 30 days compared to 8 percent in the spring months. On the other hand, in Seattle, 18 percent of the listings were under contract within 30 days in the spring, compared to 16 percent in the winter and 14 percent in the summer and fall months.

See the chart below for market-by-market home-selling performance data for homes listed from 2010 through 2015.

 

Have Questions about Selling or Buying? Contact me:

Paula Allin – HomeSmart Professionals

401-241-2976 or PaulaSoldit@cox.net

Check out my website for more information: http://www.PaulaAllinRealEstate.com

5 Reasons You Shouldn’t For Sale By Owner

Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies which work for the buyer and will almost always find some problems with the house.
• The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

• 43% on the internet
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Excellent Advice!

If you are considering selling your home in the near future, Contact Me:

Paula Allin – HomeSmart Professionals

401-241-2976 or PaulaSoldit@cox.net

Check out Market Trends in Your Area at: http://www.PaulaAllinRealEstate.com  use the “Market Insider” tab.

No Matter What the Groundhog Says… You Should Sell Before Spring!

 

<!– Want to share the articles without ads? Learn how! –>

Is spring closer than we think? Depending on which Groundhog you witnessed today, you may have less time than you think to get your home on the market before the busy spring season.

Many sellers feel that the spring is the best time to place their home on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages.

Here are five reasons to sell now.

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at homes right now. The latest foot traffic numbers show that there are currently more prospective purchasers looking at homes than at any other time in the last 12 months, which includes last spring’s buyers’ market. These buyers are ready, willing and able to purchase… and are in the market right now!

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing supply just dropped to 4.4 months, which is under the 6 months’ supply that is needed for a normal housing market. This means, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.

Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).

The choices buyers have will increase in the spring. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. There is less overall business done in the winter. Therefore, the process will be less onerous than it will be in the spring. Getting your house sold and closed before the spring delays begin will lend itself to a smoother transaction.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 23.5% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate below 4% right now. Rates are projected to be a full point higher by the end of 2015.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Need Help? Contact me:

Paula Allin – HomeSmart Professionals Real Estate

401-241-2976 or PaulaSoldit@cox.net

Look at what is trending in your zip code: http://www.PaulaAllinRealEstate.com