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Exterior Remodeling- Bang for your buck

December 24th, 2009 8:05 AM

RISMEDIA, December 24, 2009—Despite a slow market and a slight decrease in the resale value of most remodeling projects, Realtors report that the smartest home improvement investments may also be some of the least expensive. Results from the 2009 Remodeling Cost vs. Value Report show that small-scale exterior projects are the most profitable at resale, according to estimates by Realtors who completed a recent survey.

On a national level, eight out of the top 10 projects in terms of costs recouped were exterior replacement projects that cost less than $14,000. Certain types of door and siding replacements, as well as wood deck additions all returned more than 80% of project costs upon resale. A steel entry door replacement–a new addition to this year’s list–recouped 128.9% of costs, followed by upscale fiber-cement sliding replacements at 83.6%. Wood deck additions recouped 80.6% of costs.

“Once again, this year’s Remodeling Cost vs. Value Report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “With exterior projects returning a high percent of project costs upon resale, Realtors can help give your home curb appeal while adding value to the real estate transaction.

The 2009 Remodeling Cost vs. Value Report compares construction costs with resale values for 33 midrange and upscale remodeling projects comprising additions, remodels and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 12th consecutive year that the report, which is produced by Hanley Wood, LLC, was completed in cooperation with Realtor Magazine, as Realtors provided their insight into local markets and buyer home preferences within those markets.

On a national level, the project with the biggest improvement from 2008 was the attic bedroom addition, recouping 83.1% of remodeling costs compared to 73.8% in 2008. The only other interior project that landed in the top 10 was a minor kitchen remodel with 78.3% costs recouped.

Other exterior projects in the top 10 include midrange vinyl and upscale foam-backed vinyl sliding replacements, which returned more than 79% of costs. In addition, several types of window replacements–midrange wood, midrange vinyl, and upscale vinyl–all returned more than 76% of costs upon sale.

Similar to last year’s report, the least profitable remodeling projects in terms of resale value were home office remodels and sunroom additions, returning only 48.1% and 50.7% of project costs.

Regionally, cities in the Pacific states of Alaska, California, Hawaii, Oregon and Washington once again outperformed the rest of the nation in terms of remodeling costs recouped upon resale. The West South Central region of Arkansas, Louisiana, Oklahoma, and Texas; the East South Central region of Alabama, Kentucky, Mississippi and Tennessee; and the South Atlantic region of the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia also performed relatively well.

The regions that generally returned the lowest percentage of costs were New England (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont), East North Central (Illinois, Indiana, Michigan, Ohio and Wisconsin), West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota), and the Middle Atlantic (New York and Pennsylvania).

Golder commented that remodeling projects are just one of many factors that contribute to a home’s overall resale value. “As the first, best source for real estate information, Realtors are experts in providing insight into what projects and investments will make a difference in your house. It’s important to consult with a Realtor who can explain the variety of factors that affect a home’s value, such as location, condition of surrounding properties and the regional economic climate,” she said.

Posted by Brad Phillips on December 24th, 2009 8:05 AMPost a Comment (0)

Fannie and Freddie info

December 30th, 2009 9:15 AM

Topping the list of institutions under fire are the familiar faces of Fannie Mae and Freddie Mac, the poster children for good intentions gone bad. The government entities faced renewed federal scrutiny earlier this year. What to do with the troubled HUD groups, however, is still up in the air. The issue is delayed until after the current federal bank restructuring effort is completed, which is anticipated by year-end.

Reformation is definitely on the horizon for these two lenders. The Treasury Department is considering an expansion of options on guidelines officials released in June regarding both lenders. Privatization, nationalism, hybrid strategies are all being measured for reform.

Fannie and Freddie were taken into conservatorship by the federal government last year as the financial crisis spread. Governmental control seemed inevitable. If the two were to collapse, it was thought that the damage would be irreparable and more widespread and devastating than even the Lehman Brothers' failure.

Reform is critical, since these entities provide the majority of home loans in the U.S. The U.S. Treasury Department was authorized to purchase Fannie and Freddie mortgage securities through the end of this year. Legislation is anticipated to extend the Treasury's conservatorship through the end of 2010.

Wells Fargo, the receiver of $25 billion in bank bailout money, was the primary lender on two recently shuttered businesses in Alabama. Wadley company Plantation Patterns and Anniston corporation Anniston Sportswear both filed for bankruptcy, and Wells Fargo was the primary lender for both companies. According to federal statistics and a local mayor's report, a total of more than 660 jobs were lost in both closings. Birmingham-based Meadowcraft is the parent company of Plantation Patterns. Chicago-based Hartmax Corporation is the parent company of Anniston Sportswear.

Wells Fargo's apparent refusal to work with either business brought federal scrutiny. In two separate incidents, the lender was named by over 40 members of Congress in complaints written to Treasury Secretary Timothy Geithner.

Not unfamiliar to federal scrutiny, Countrywide came under the federal microscope again last year, this time by a federal bankruptcy court official. Accused of destroying, losing or misplacing $515,000 in checks issued by homeowners, the home lender was further accused of adding inappropriate charges to the bankruptcy debt of homeowners.

Countrywide eventually worked out a deal with the court; however, the Justice Department challenged the settlement due to some unsavory terms presented by the mortgage lender. A non-disparaging clause was included, which caused the judge in the case to approve a probe of Countrywide's entire systems by the U.S. trustee.

Many mortgage lenders letting loans for reverse mortgages are now being examined under federal scrutiny. Some lenders responsible for predatory lending have now turned to high-pressure tactics and broad-yield premiums intended to rip off elderly homeowners. Michael S. Blume, U.S. Attorney, noted a dramatic increase in reverse mortgage loan numbers.

Bank of America and Wells Fargo, along with insurers like MetLife and Genworth, heavily invest in reverse mortgages worth about $17 billion annually. The FHA insures most reverse mortgages. Lenders are approved by HUD. Borrowers are required to meet with HUD-approved counselors prior to being approved for the reverse mortgage loan. New certification requirements have resulted in a reduction of counselors available nationwide, alongside an increase in the number of reverse mortgage loans.

The similarities of subprime loans to reverse mortgages are eerily similar in their predatory lending practices. Senior homeowners are strongly encouraged to avoid high-pressure sales that involve add-on products and services for reverse mortgages.

For more mortgage lenders under federal scrutiny, check out the Federal Trade Commission website at FTC.gov. You'll find formal complaints and current cases being prosecuted by the federal government.

Courtesy of Broker/Agent Social

Posted by Brad Phillips on December 30th, 2009 9:15 AMPost a Comment (0)

Home price reduction info

December 11th, 2009 1:31 PM

RISMEDIA, December 11, 2009—Trulia, Inc., a real estate search site, has announced that 22% of homes currently on the market in the United States as of December 1, 2009 have experienced at least one price cut, the lowest level since Trulia started tracking price reductions in April 2009. The total amount slashed from home prices also dropped from $28.1 billion in November to $24.7 billion in December, representing a 12% decrease. The average discount for price-reduced homes slightly increased to 11% off of the original listing price compared to 10% in the previous four months. The number of listings on Trulia also decreased by 9% from the previous month.

South Reports Least Amount of Homes Reduced
The South has the lowest levels of price reductions, with 19% of current listings experiencing at least one price cut, a 21% decrease from the previous month. Kentucky, Louisiana, Arkansas Oklahoma and Mississippi are all seeing less than 15% of listings with price reductions. (Regions according to the U.S. Census Bureau)

-South – 19% of listings with price reductions
-West – 20% of listings with price reductions
-Midwest – 22% of listings with price reductions
-Northeast – 25% of listings with price reductions

“We saw some of the highest levels of reductions last month, as home owners raced to sell their homes in advance of the November 30 expiration of the tax credit,” said Pete Flint. “We are now seeing fewer reductions at the low end of the market as those sellers are increasingly in sync with market prices. With the expansion of the tax credit to repeat home buyers and extension to April 30, we expect to see an increase in price reductions at the higher end of the market in the first quarter of 2010.”

For the first time since Trulia started tracking price reductions in April 2009, one major U.S. city has reached 40% of listings with price reductions- Minneapolis. This is the second straight month that Minneapolis has held the top spot for highest percentage of price reductions.

Cities experiencing significant increases in percentage of listings with price reductions from June 2009 to December 2009 include:
-Kansas City, MO – 40% increase in price reductions
-Omaha, NE – 39% increase in price reductions
-Houston, TX – 32% increase in price reductions
-Minneapolis, MN – 29% increase in price reductions
-Arlington, VA – 28% increase in price reductions

Cities showing signs the highest percentage of declines for listings with price reductions from June 2009 to December 2009 include:
-Las Vegas, NV – 30% decrease in price reductions
-San Jose, CA – 30% decrease in price reductions
-Long Beach, CA – 25% decrease in price reductions
-Honolulu, HI – 23% decrease in price reductions
-Albuquerque, NM – 22% decrease in price reductions

Luxury Market Still Hardest Hit
Luxury homes (those listed at two million dollars and above) continue to bear the brunt of discounts being offered with an average of 14% being slashed from the original asking price compared to 10% for homes listed under $2 million. Additionally, luxury homes represent less than 2% of all current listings on Trulia, but are responsible for 26% of the $24.7 billion in home price reductions.

Posted by Brad Phillips on December 11th, 2009 1:31 PMPost a Comment (0)

New Foreclosure info

December 10th, 2009 7:05 AM

WASHINGTON -The number of homeowners on the brink of foreclosure fell in November, the fourth straight monthly decline, as mortgage companies evaluated whether borrowers were eligible for help.

Nearly 307,000 households, or one in every 417 homes, received a foreclosure-related notice in November, down 8 percent from a month earlier, RealtyTrac Inc. said Thursday. Banks repossessed about 77,000 homes last month, down slightly from October.

Millions of borrowers are still being evaluated for the Obama administration's foreclosure prevention effort. States are also trying to delay the foreclosure process, temporarily lowering foreclosure numbers. <script language='JavaScript1.1' SRC="http://ad.doubleclick.net/adj/N4674.azcentral.com/B3677202.141;abr=!ie;sz=160x600;click=http%3A//gannett.gcion.com/adlink%2F5111%2F334834%2F0%2F154%2FAdId%3D358763%3BBnId%3D1%3Bitime%3D453810969%3Blink%3D;ord=453810969?"> </script> <noscript> <a HREF="http://gannett.gcion.com/adlink/5111/334834/0/154/AdId=358763;BnId=1;itime=453810969;nodecode=yes;link=http://ad.doubleclick.net/jump/N4674.azcentral.com/B3677202.141;abr=!ie4;abr=!ie5;sz=160x600;ord=453810969?"> <img SRC="http://ad.doubleclick.net/ad/N4674.azcentral.com/B3677202.141;abr=!ie4;abr=!ie5;sz=160x600;ord=453810969?" BORDER=0 WIDTH=160 HEIGHT=600 ALT="Click Here"></a> </noscript>

But the foreclosure crisis is likely to get worse before it gets better.

"We don't really believe the underlying problems have been resolved," said Rick Sharga, senior vice president at the Irvine, Calif.-based foreclosure listing service. Many borrowers, he said, "simply aren't going to qualify" for help.

Foreclosure filings were still up 18 percent from a year ago, and a new wave is expected next year as unemployment remains high and borrowers fall out of loan modification programs.

Nevada's posted the nation's highest foreclosure rate, followed by Florida, California, Arizona and Idaho. Rounding out the top 10 were Michigan, Illinois, Utah, Maryland and New Jersey.

Among cities, Merced, Calif. had the highest rate, with one in 83 homes receiving a foreclosure filing. It was followed by fellow California cities Stockton and Modesto, and Cape-Coral-Fort Myers, Fla.

Las Vegas, which had been No. 1 on that list for four-straight months, fell to No. 5. Nevada recently adopted a program that requires mediation before banks can seize a property.

Nationwide, a report Wednesday showed only about 10,000 homeowners received permanent loan modifications this fall under the Obama administration's mortgage relief plan, more evidence of serious failings in the government's effort.

Elizabeth Warren, chair of a watchdog panel, told reporters that the program is "not working" and that it had failed to make a dent in the record level of foreclosures. More than 14 percent of homeowners with a mortgage are either late on their payments or in foreclosure, and that number is expected to keep rising as unemployment remains stubbornly high.

The Treasury Department is expected to release updated figures Thursday, but data through October showed that fewer than 5 percent of homeowners who completed the trial periods had their mortgage payments permanently lowered to more affordable levels

Under the program, eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as 2 percent for five years. They are given temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete the required paperwork, including proof of income and a hardship letter.

Posted by Brad Phillips on December 10th, 2009 7:05 AMPost a Comment (0)

Federal Tax Credit info

December 9th, 2009 7:23 AM

http://rismedia.com/2009-11-18/tax-credit-expands-home-buyer-economic-opportunities-on-pace-to-help-70-of-potential-home-buyers/

Great article and a reference to the national site.

Posted by Brad Phillips on December 9th, 2009 7:23 AMPost a Comment (0)

2010 Real Estate Forecast

December 1st, 2009 7:15 AM

Region: Maricopa County
The Age of the Short Sale
By Mike Orr

The impact of lender-owned homes reached a peak in the winter season 2008-2009. While these were available in large quantities and at falling prices, buyer interest was focused almost entirely on them. Supply was sufficient to keep REO prices declining until early April 2009. After the second quarter of 2009, REOs became much harder to find, and as competition for them grew fierce, short sales have become more important. Given the large number of homes still in distress and the banks’ desire to avoid foreclosure if possible, we expect short sales to become the most important segment in the market over the next few years.

In October 2009, short sales and pre-foreclosures constituted about 39% of the active listings on the Arizona Multiple Listing Service (ARMLS), with normal sales at 48% and lender-owned properties at 13%. Short sales and pre-foreclosures constituted about 50% of the listings under contract on ARMLS, with normal sales at 20% and lender-owned properties at 30%. Lender-owned properties are declining in market share, and normal sales are stable while short sales and pre-foreclosures are increasing.

The demand for short sale properties is now strong, particularly for the more affordable homes. However, a large proportion of the listings are still failing to close in a timely fashion. For example, the monthly sales rate for September was only 1,458 - less than 16% of the listings under contract. However patience is eventually paying off for a lot of buyers since the listing success rate has improved dramatically over last year. The success rate for short sales improved from about 15% in January to over 50% in October, just below that for normal sales, though far less than for lender-owned properties.

The growth in short sales has been most dramatic in the price ranges up to $200,000. The most important range in dollar volume terms is that between $100,000 and $200,000, with a trebling of monthly volume between January and September and a monthly dollar value now over $90,000,000. The price range below $100,000 has also shown dramatic growth although this is of much less significance in total dollars spent. Although the more expensive sectors have relatively low unit sales, when measured in dollar volume, they also show very significant growth in short sales.

When we analyze the 48,000 residential properties in Maricopa County that have received a Notice of Trustee Sale, we find that fewer than 1 in 5 are listed on ARMLS. Given that we are now seeing considerable success among the short sales, it is a little surprising that so few owners attempt a short sale. We anticipate that this percentage will increase over the coming year, as more homeowners understand the benefits compared with foreclosure. We believe that many lenders will postpone a trustee sale if there is any sign of a short sale taking place, so homeowners should not be deterred by the belief that they don’t have enough time within the 90-day notice period.

In Maricopa County, 47% of the short sales and pre-foreclosures listed on ARMLS have not yet received a Notice of Trustee Sale. So a large number of homeowners are clearly attempting a short sale long before they receive a notice, which seems like a sensible strategy. As lenders appear to be getting more flexible in their consideration of what constitutes hardship, it seems likely that more of these short sale listings will achieve success as long as the pricing is not too low to be acceptable to the lender.

Greater Phoenix suffered a very significant price decline between May 2006 and April 2009, so many homeowners who wish to sell their home and have a deed of trust on their property are going to find themselves in a short sale situation for the foreseeable future. Fortunately, lenders are now devoting more effort and resources to short sales, and many REALTORS® are learning the tools and techniques to bring them to a successful conclusion.

As properties get purchased by new buyers at the new lower prices and prices stabilize and then increase, we will eventually see a peak in short sales and a long slow decline in their importance. However, that peak is still ahead of us, and the next several years are likely to be remembered as the “Age of the Short Sale.”

Posted by Brad Phillips on December 1st, 2009 7:15 AMPost a Comment (0)