Real Estate Summer Market Predictions Are Sizzling

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More buyers are saying that summer is the best time to purchase a home.  For families, the kids are out of school for the summer so transition is easier into new schools.  For other buyers, summer is a great time to take time off from their jobs as management expects summer vacations.

More consumers say that the spring momentum will carry into summer, with the survey showing an eight-point jump over a year ago in those who view the summer as the best time to buy a home.

Overall, 77 percent of 2,500 consumers surveyed report having a favorable view of housing, a 12-point jump from one year prior. The Millennials segment show the most optimism, at 85 percent.

Nearly 70 percent of those surveyed say they are committed to buying or selling a home now, a six-point increase compared to a survey at the end of 2013.

Consumers understand that home valuations remain attractive and mortgage rates are still near historic lows. The optimism and enthusiasm we’re seeing through the survey shows consumer motivations and pent-up demand. As more homes come to market and lenders ease their stringent underwriting guidelines, there are busy times ahead in real estate.

Also among the survey’s findings:

  • 78 percent of potential buyers say it will be easier to buy a home this spring, since “home owners want to sell.”
  • 63 percent of sellers say the improving economy and their perception of motivated buyers are increasing their optimism.
  • 76 percent of consumers say pent-up demand will create more competition for existing homes this season.
  • 83 percent of buyers say they plan to buy a home sooner rather than later because they fear interest rates will rise.

 

Source – Realtor.com

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Beat the Summer Heat and Reduce Your Utility Bill

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As the temperature rises, so does the cost of cooling your home, especially if you use an air conditioner. Obviously, the best way to keep your home cool during the summer is to use an air conditioner to keep the temperature down, but there are other options that don’t raise your energy bill quite significantly. Here are some ideas that you can try in lieu of air conditioning your home.

Fans and Ceiling Fans

Fans can make a room feel 6 or 7 degrees cooler, and costs less than $10 a month to use if you keep it on for 12 hours a day. Good fans make it possible for you to raise your thermostat setting and save on air-conditioning costs. Fans don’t use much energy, but when air is circulating, it feels much cooler. Ceiling fans are best, but a good portable fan can be very effective as well.

Shades, drapes, or blinds

Install white window shades, drapes, or blinds to reflect heat away from the house. Close blinds, shades and draperies facing the sun (east-facing windows in the morning and west-facing windows in the afternoon) to keep the sun’s heat out and help fans or air conditioners cool more efficiently.

Internal Heat

The most common sources of internal heat gain are; appliances, electronic devices, and lighting. Be aware from where the heat is coming from. Don’t put lamps, televisions or other heat-generating appliances next to your air-conditioning thermostat, because the heat from these appliances will cause the air conditioner to run longer

Try to avoid heat-generating activities, such as cooking indoors.  Get outside and grill. If you are cooking indoors, use your range fan to vent the hot air out of your house.

Plants

Plant trees or shrubs to shade air conditioning units, but be careful not block the airflow. A unit operating in the shade uses less electricity. Trees planted on the south and west sides will keep your house cool in the summer and allow the sunlight to warm the house during the winter.

Roof

Paint your roof white – If you’ve got a flat roof, paint it with a specially formulated reflective paint or just paint it white. The reflective effect will help to keep the rooms under the flat roof much cooler.

Other things to remember

Humidity makes room air feel warmer, so reduce indoor humidity. Minimize mid-day washing and drying clothes, showering, and cooking. And when you must do these things, turn on ventilating fans to help extract warm, moist air.

If the attic isn’t already insulated or is under-insulated, insulate it NOW. Upgrading from 3 inches to 12 inches can cut cooling costs by 10 percent.

 

Source – Freshome

National Association of REALTORS® Report of Housing Market.

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Existing-home sales posted the first rise of the year in April as inventory levels of for-sale homes also showed improvement, the National Association of REALTORS® reports.

Existing-home sales rose 1.3 percent in April compared to March, reaching a seasonally adjusted annual rate of 4.65 million last month. Still, home sales are 6.8 percent below the 4.99 million-unit pace set in April 2013, NAR reports.

“Some growth was inevitable after subpar housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point,” says Lawrence Yun, NAR’s chief economist. “Annual home sales, however, due to a sluggish first quarter will likely be lower than last year.”

An Overview of Key Indicators

Inventory levels: Housing inventories soared 16.8 percent in April, reaching a 5.9-month supply at the current sales pace. That is up from a 5.1-month supply in March. Unsold inventory is 6.5 percent higher than a year ago. “We’ll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough sellers in many areas,” Yun says. “More inventory and increased new-home construction will help to foster healthy market conditions.”

Home prices: The median existing-home price was $201,700 in April – 5.2 percent higher than year ago levels. “Current price data suggests a trend of slower growth, which bodes well for preserving favorable affordability conditions in much of the country,” Yun says.

Distressed sales: The decrease continues in distressed homes, which includes foreclosures and short sales. Distressed homes accounted for 15 percent of April sales, down from 18 percent a year ago, NAR reports. Broken out, in April, 10 percent of sales were foreclosures and 5 percent were short sales.

Time on market: For the fourth consecutive month, homes sold faster. Four out of 10 homes nationwide sold in less than a month in April. The median time on the market for all homes was 48 days in April, down from 55 days in March.

In the South here’s how existing-home sales and prices fared in April,  rose 1 percent to an annual level of 1.94 million in April, but remain 3.5 percent below year ago levels. Median price: $173,200, up 3.2 percent from April 2013 levels.

Source: National Association of REALTORS®

Move Up Buyers – It’s Time to Move Up!

move up buyers

Here’s the dilemma, at the time you bought your current home, it was the right place for your family’s needs. It was the perfect home that fit your finances, located in a great school district, and cozy enough to be relatively low-maintenance. That was three kids and several promotions ago. With the passing of time, you’re wondering where all the space went?

Longing for More Room or An Upgraded Home?

Like many growing families, that cozy feeling of your current home has gradually drifted into wishing there were more room. You realize it’s time for more space and an upgrade. You figured it’s worth tackling the challenges involved in moving even if it’s just across town. This much we know – it makes no difference if you’re moving across town or across the country, moving is never easy. Plus you have to work through the logistics of selling the home you live in and purchasing a new one, preferably  at the same time. That’s when it gets real complicated and you know you need an expert real estate professional who has experience managing two transactions at the same time.

Here are some tips we recommend to clients moving into a more expensive home.

Preparing for Moving Up

Before you think about buying a more expensive home (that doesn’t necessarily mean bigger), begin by prioritizing your home buying needs. Things have changed since you last bought your current home, so your needs have changed dramatically.

First and foremost, select an experienced real estate professional to help protect your interest and guide you through the real estate transaction.  Interview several before making your choice.  This is one of the most important decisions you will make during the process.

Get loan pre-approval or at least pre-qualified for a mortgage.

Make a budget for the total costs of your new home including the funds for the down payment and funds for your transition.

Ask your Realtor about the available housing inventory and the type of market your area is experiencing.

Get your current home ready for the market.

Price it right!

What if you find a new home for yourself before selling your current home?  Again ask your experienced Realtor the way to broach this in the offer.

America – The Real Estate Market Is Back!

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Realtors will tell you that the market is improving.  But what exactly changed to drive American’s back to the real estate market?  Americans’ outlook on the economy is improving and they’re ready to make more purchases, especially regarding real estate. The latest Pulte Group Home Index Survey discovered 67% of the 1,004 adults surveyed say they plan to purchase a home in the upcoming future.

Overall, the two main drivers to buying are the need for more space and the view that owning a home is a smart financial investment.

The survey found that the most engaged consumer segments are the Millennials and move-up buyers. 85%of Millennials and 71% of move-up buyers say they intend to purchase a home in the future, according to the index. 50% of those aged 55 and older said they’re looking to purchase a home in the future.

70% of home shoppers say they intend to spend more—or as much—money on their next home, not only to increase the size of the home but also to upgrade the finishes. 64% say they prefer to spend more on a home that’s move-in ready, rather than spend less and then renovate a home.

“For the first time in years, Americans have a growing sense of optimism that the housing market is improving, and that these positive changes may be sustainable,” says Margaret Gramann, senior vice president of sales for Pulte Group, Inc.  “This favorable outlook is giving them the confidence to pursue more meaningful, big-picture life opportunities they may have otherwise put on hold.”

 

Source – Pulte Group

Different Types of Mortgages

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In the past there were three mortgage loan types available to a home buyer. Buyers could get a fixed-rate conventional mortgage, a FHA loan or a VA loan. Times have definitely changed. Now there are now seemly unending different types of mortgage loan types available.

Fixed-Rate Mortgage

This is may in fact be the most common mortgage; it is also called a conventional loan. Today you can choose from 5-year, 10-year, 15-year, 20-year-, 30-year, 40-year and even 50-year fixed-rate mortgages, all of which are completely amortized.

FHA Loans

FHA mortgage loan types are insured by the government through mortgage insurance that is funded into the loan. First-time home buyers are ideal candidates for a FHA loan because the down payment requirements are minimal and FICO scores do not matter.

USDA Loans

A USDA loan is a no down payment home financing option for buyers in rural areas.  Qualification is based on zip code and on the # of dependents when compared to your income.   To see if you live in a USDA eligible area visit http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

VA Loans

This type of government loan is available to veterans who have served in the U.S. Armed Services and, in certain cases, to spouses of deceased veterans. The requirements vary depending on the year of service and whether the discharge was honorable or dishonorable. The main benefit to a VA loan is the borrower does not need a down payment. The loan is guaranteed by the Department of Veteran Affairs, but funded by a conventional lender.

Interest-Only Mortgage Types

Calling a mortgage loan type an “interest-only mortgage” is a bit misleading because these loans are not really interest only, meaning the borrower pays only interest on the loan. Interest-only loans contain an option to make an interest-only payment. The option is available only for a certain period of time. However, some junior mortgages are indeed interest only and require a balloon payment, consisting of the original loan balance at maturity.

Combo / Piggyback Mortgage Loan Types

This type of mortgage financing consists of two loans: a first mortgage and a second mortgage. The mortgages can be adjustable-rate mortgages or fixed-rate or a combination of the two. Borrowers take out two loans when the down payment is less than 20% to avoid paying private mortgage insurance.

Adjustable-Rate Mortgage Types

Adjustable-rate mortgages (ARMs) come in many flavors, colors and sizes. The interest rate fluctuates. It can move up or down monthly, semi-annually, annually or remain fixed for a period of time before it adjusts.

Mortgage Buydowns

Borrowers who want to pay a lower interest rate initially often opt for mortgage buydowns. The interest rate is reduced because fees are paid to lower the rate, which is why it’s called a buydown. Buyers, sellers or lenders can buy down the interest rate for the borrower.

Specialty Mortgage Loan Types

Streamlined-K Mortgage Loans

Like the 203K loan program, FHA has another program that provides funds to a borrower to fix-up a home by rolling the funds into one loan. The dollar limits for repair work are lower on a Streamlined-K loan, but it requires less paperwork and is easier to obtain than a 203K.

Bridge / Swing Loans

These types of mortgage loans are used when a seller has put a home on the market — but it has not yet sold — and the seller wants to borrow equity to buy another home. The seller’s existing home is used as security for a bridge (also called swing) loan.

Equity Mortgage Loan Types

Equity loans are second in position and junior to the existing first mortgage. Borrowers take out equity loans to receive cash. The loans can be adjustable, fixed or a line of credit from which the borrower can draw funds as needed.

Reverse Mortgages

Reverse mortgage are available to any person over the age of 62 who has enough equity. Instead of making monthly payments to the lender, the lender makes monthly payments to the borrower for as long as the borrower resides in the home. The interest rate can be fixed or adjustable. Get independent advice from a trusted advisor before taking out a reverse mortgage.

Biggest Regrets Home Buyers Experience

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Though buyer’s remorse is never fun, there’s usually something we’d change if we could go back and do it again.  In a new survey, Chase Bank found out what some recent home buyers would change about their real estate purchase if given a second chance.

Here’s what home buyers say they would do in hindsight.

Get Smarter About Financing

While nine out of 10 buyers surveyed say they felt prepared at the time they bought their home. 56 % say that in hindsight, they should have known more about financing.

22% say they weren’t as educated about the closing process.

19% say they weren’t efficient enough on making an offer and negotiating.

15% say they needed more guidance on the overall financing of a home.

Choosing the right Realtor and Mortgage Lender is key here. So make sure you interview several in your area and ask for referrals from friends and family members before making your choice of who will handle your transaction.

Pick a Different-Size House/Area

39% of respondents, who say they would choose a house of a different size or a different price — or even in a different neighborhood — if they could redo their purchase.  Spend some time going to the area you are the neighborhood you are looking to move into at different times of the day and even different times of the week.  This will give you a feel of what the neighborhood is really like.

Adjust Expectations

A good chunk of buyers weren’t expecting the home-buying process to take as long as it did, with 40 % saying it took longer than they thought it would. 16% say they got a “pleasant surprise on timing,” according to the survey.  The length of the  home buying process varies from one extreme to another.  Stay in touch with your Mortgage Lender and your Realtor to get updates on where you are in the process.

Be More Prepared to Spend on Maintenance

Home ownership can be expensive. 34% of surveyed said that home-maintenance costs ended up being more than they expected.  80% of survey respondents say they considered their home move-in ready when they bought it, but 76% have since completed or planned renovations.  First time home owners are usually the most shocked due to the fact they just have never done it before.

 

Source – Realtor Magazine