Pending Home Sales Slip In July; Creates Buyer Opportunity

After 3 straight months of gains, the Pending Home Sales Index slipped 1 percent in July. The monthly report is published by the National Association of REALTORS® and measures the number of home under contract to sell nationwide.

The Pending Home Sales Index is closely watched by Wall Street and analysts because it's a forward-looking housing market indicator. Unlike most housing market data, though, Pending Home Sales forecasts a future housing market event. In this case, the Existing Home Sales report.

In its methodology, the Pending Home Sales Index states that 80% of homes under contract close within 2 months, with most of the remaining home going to closing within Months 3 and 4.

We would expect home sales data to taper into the fall buying season, but this year, they may taper more than normal. This is because, in a separate report, the National Association of REALTORS® said that contract cancellation rates are running high.
As compared to a 4 percent contract cancellation rate in May 2011, June and July both registered 16 percent. This means that fewer homes tallied as part of July's Pending Home Sales Index will show up as "closed sales" this fall.

Contracts can be canceled for any number of reasons including more stringent mortgage guidelines, appraisals falling short of the purchase price, and changing mortgage loan limits.

For home buyers in the New York City area, the Pending Home Sales Index may represent an opportunity. Not only are fewer homes going under contract nationwide, but with cancellation rates spiking, sellers may be more willing to "make a deal". Remember, all is local.

Note, though, like all real estate, the pace at which homes go under contract is a "local" statistic; you can't assume national data applies to all markets equally. Your home market, for example, may out-perform -- or under-perform -- the national average.

For a closer look at what's happening on your street including the speed at which homes are selling, talk to a local real estate agent.

In the New York City area. I am your housing expert. I have all the housing statistics.

Till next time

The New York Real Estate Nurse

How To Weatherize Your Home With Caulk

With seasons changing, it's a good time to look at weatherizing your home. Whether you live in a single-family home, a multi-family property, or a condominium, your home has windows and, through those windows, air escapes. Even with your windows closed.

In this brief tutorial from Lowe's, you'll learn how to use caulk to seal the gaps between your windows and doors and their respective framing to keep your home's inside air in, and the outside air out.

Weatherizing your windows and doors is a 3-step process:

1. Find the air leaks
2. Clean the surface of existing caulk and debris
3. Seal surface with new caulk, and clean-up

As shown by the video, there are no technical skills required to repair and replace your home's caulking. It may require a little bit of elbow grease, however. And, depending on your windows' locations, use of a ladder may be required.

If you'd like professional help weatherizing your home, please ask me for a referral in the New York City area.

Keep your home strong for the up-coming winter months.

Till next time

The New York Real Estate Nurse

Mortgage Rates Bounce Off All-Time Lows; The Start Of A Trend?

Low mortgage rates are terrific -- if you can get them.

One week after posting its lowest mortgage rate in 50 years, Freddie Mac reports that the 30-year fixed rate mortgage rose by an average of 7 basis points nationwide this week to 4.22%. To get the rate, you'll pay an average of 0.7 "points".

This week's rise in the 30-year fixed rate mortgage pulled rates off their all-time lows so either you locked last week's rock-bottom rates, or you missed it.

Mortgage rates are rising.

As a refinancing homeowner or home buyer in New York City area , rising mortgage rates are something to watch. This is because, as mortgage rates rise, so do the long-term interest costs of giving a mortgage, increasing your homeownership costs.

For example, if you failed to lock a rate last week when rates were bottomed, and then decided to lock-in only after rates had climbed 0.25 percent, at the new, higher rate, over the life of your loan, you would have responsibility for an extra $5,300 in interest costs for every $100,000 you borrowed.
Rising mortgage rates can be expensive.

For home buyers, rising mortgage rates pose a second problem -- they erode your purchasing power. A home that fits your budget at today's rates may not fit your budget at next week's rates. And because mortgage rates change quickly, you can sometimes feel ilke you're racing the clock.

The hard part about mortgage rates, though, is that we can never know what they'll do next. On some days they rise, on some days they fall, and on some days they stay the same. Instead of trying to "time the bottom", therefore, a good strategy can be to lock the first, low rate that fits your budget. Then, if rates are lower in the future, you can look to refinance at that time.

Mortgage rates remain at historical lows. It's a good time to lock a rate.

Its a better time to buy a home, rates won't stay this low forever.

Till next time

The New York Real Estate Nurse

New Home Supplies Remain Flat; Builders Not Over-Extending

Sales of newly-built homes slipped in July, falling 1 percent as compared to June. Home buyers closed on a seasonally-adjusted, annualized 298,000 units, the lowest reading since February. The supply of new homes, however, remained flat.

July's 6.6 months of supply equaled June's tally and remains near the multi-year low of 6.5 months set in May of this year. The figures suggest a new home market that's finding its balance. Builders are building to meet demand, and not much more.

The New Home Sales report may have read differently if not for the Northeast Region which doubled its sales units in July. The gains buoyed the broader data, re-affirming the importance of looking past national data and focusing on what's local; the national market is not reflective of any given town.
Broken down by region, July New Home Sales fared as follows:

• Northeast Region : +100.0% from June 2011 
• Midwest Region : +2.4% from June 2011 
• South Region : -7.4% from June 2011 
• West Region : -5.9% from June 2011 

It is important that we recognize the New Home Sales data's margin of error.
Although New Home Sales showed a 1 percent drop in July, the reported margin of error was ±12.9%. This means that the actual reading could have been as high as +11.9 percent, or as low as -13.9 percent. Because the range includes both positive and negative values, the Census Bureau assigned its July data "zero confidence".

New Home Sales appear to be stable, despite falling sales figures. Supplies remain flat and builder confidence does, too. The good news for buyers in the New York City and surrounding area , is that lower mortgage rates are making homes more affordable and New Home Sales are up in this area, which is local.
Mortgage rates are currently at 50-year lows.

If you are considering buying a newly constructed home. Do your homework and contact a local Realtor to guide you through the purchase.

Till next time

The New York Real Estate Nurse

Existing Home Sales Slip In July

Home resales slipped in July.

According to the National Association of REALTORS®, Existing Home Sales nationwide fell to 4.67 million units on a seasonally-adjusted annualized basis last month. It's the fourth straight month below the 5 million mark, and the report's lowest reading since November 2010.

An "existing home" is a home that's been previously occupied or owned.
In addition, the Existing Home Sales report showed home supplies rising nationwide. At the current pace of sales, in other words, the complete, national "For Sale" inventory would be exhausted in 9.4 months. This, too, is the worst reading since November 2010.

On a units basis, however, the number of homes for sale actually fell in July. As compared to June, home resale inventory dropped 65,000 units to 3.65 million.

From these figures, we can infer that, despite low mortgage rates and lagging home values, buyer activity is slowing in New York and nationwide. This may be seasonal, or it may be a long-term trend.
Either way, there's opportunity for today's home buyers.

With mortgage rates at all-time lows, home affordability is peaking. More households can afford housing payments than during any time in history and with the fall season approaching, buyers in Queens, and the New York City area may find contracts negotiations to be more "friendly".

This can mean lower sale prices and larger concessions from sellers -- the hallmark of a Buyer's Market.
It's a good time to look at your options. Talk to your real estate agent and see what's out there for you. Low home prices may persist, but low mortgage rates likely won't.

The Song Remains The Same. Statistical data with little improvement if any. By and large, all real estate is local.
There are great investments out there for the Buyer. You need to have vision to see down the road. That road may lead you to where your goals are aiming at.

Till next time

The New York Real Estate Nurse

Housing Starts Tick Lower; Building Permits Tick Higher

Single-Family Housing Starts fell to a seasonally-adjusted, annualized 425,000 units in July, according to the Census Bureau.
A "Housing Start" is defined as a home on which construction has started and ground has broken.

Furthermore, Single-Family Housing Starts were revised lower for both May and June of this year, by 6,000 units and 2,000 units, respectively.
The data may be worthless, however.

Like in most months, the government's official report states that the Housing Starts numbers have a margin of error exceeding their actual measurement. Mathematically, this renders the data statistically irrelevant.

• July Published Results : +4.9%
• July Margin of Error : ±8.9%

In other words, July Housing Starts made have increased by as much as 13.8%, or they may have dropped up to 4.0%. We won't know for certain until several months from now, when the Census Bureau gathers more data.

Regardless, the trend in Housing Starts has been flat since last summer. July's reading is in-line with the 12-month average and, not surprisingly, New Home Sales have been mostly flat over the same time span.

Also included in the Housing Starts report is the Building Permits tally. As compared to June, permits were higher by a half-percent nationwide, with varying results by region.

• Northeast : +2.9 percent from June
• Midwest : +0.0 percent from June
• South : -1.4 percent from June
• West : +4.9 percent from June

When permits are issued, 86 percent of them start construction within 60 days. This means that new home sales and housing stock should follow the Building Permits trend, but on a 2-month delay.

Housing  inventory is rising here in the New York City area, and Shadow Inventory will be released at a rapid pace when the banks settle the law suits and get the green light from the litigation. An increase in starts could further slow the housing resale market.

It remains a great time to buy a home. You got the job. You got the down payment. You got closing cost, then you got the power to purchase a home at a time in American History when the Buyer is in charge.

Till next time

The New York Real Estate Nurse

Foreclosures Sink To 4-Year Low

Foreclosure activity continues to slow.

According to RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings nationwide fell 35 percent as compared to July 2010, a statistic suggesting that the housing market continues to improve.

"Foreclosure filing" is a catch-all term encompassing default notices, scheduled auctions, and bank repossessions.
Filings fell to a 44-month low in July 2011.

For all the improvement, though, activity remains concentrated in just a few states. More than half of all bank repossessions last month occurred in just a handful of states.

In July, 6 states accounted for 52% of activity.

1. California : 19% of all repossessions
2. Georgia : 8% of all repossessions
3. Florida : 7% of all repossessions
4. Texas : 6% of all repossessions
5. Michigan : 6% of all repossessions
6. Arizona : 6% of all repossessions

At the other end of the spectrum is Vermont. With just 11 repossessions for all of July, Vermont accounted for 0.016% of repossessions nationwide.

Distressed homes are in high demand with today's home buyers. According to the National Association of REALTORS®, they account for 30% of all home resales. That's no surprise, either.
Distressed homes typically sell at 20 percent discounts as compared to non-distressed ones.

But, if buying a foreclosure is in your agenda, be sure to do your homework. Buying bank-owned homes is different from buying from "people". The contracts are different, the negotiations are different, and the homes are sometimes sold with defects.

If you plan to purchase a foreclosure in the New York, Long Island and the surrounding counties , be sure to speak with a licensed real estate agent first. There's plenty of available information online but when it's time to buy, have an experienced agent on your side.

I will say it again. BUYER BEWARE when purchasing Distressed Properties. The deals are out there, but not for the faint of heart. Cash buyer's top all, and the process can be slow.

So what are you waiting for, go get that property.

Till next time

The New York Real Estate Nurse

First-Aid Guide For Furniture to my Buyer's

I want to thank all you new home owners. I hope your transition into your new living space is not too stressful. I know you had a lot of fun shopping
for that new furniture. Don't be yelling at the kids to stay off it. Be prepared for the usage.

When furniture arrives in your home, it's factory-issued, perfect and clean. From that day forward, however, accidents can happen, causing damage to your pieces. Sometimes the damage is permanent.

Know how to react when the inevitable spill or scratch occurs and you can "save" your furniture and extend its useful life.
From Martha Stewart, these "first-aid for furniture" tips should come in handy.

Wood

• Moisture "rings" : Pour table salt on the white rings/haze and cover with a terry cloth. Apply hair dryer on low setting until rings are gone.
• Alcohol spills : Blot spills immediately, do not rub. Apply small amounts of ammonia to damage.
• Wax spills : Allow to cool and harden, then freeze the wax with an ice cube in a sandwich bag. Use a butter knife to gently scrape off wax.

Fabric

• Red wine stains : Cover wine with table salt and let sit until salt has wicked up the wine. Vacuum salt and repeat, as necessary. Blot remaining stains with damp cloth and dish soap.
• General spills : Repeatedly blot with a damp white cloth. Use white cloths to prevent dye transfer.
• Oil spills : Cover spill with baking soda and vacuum once absorbed. Blot remaining stains with rubbing alcohol

Leather

• General stains : Blot with all-purpose household cleaner. To prevent fading in the upholstery, avoid products with bleach or bleach alternatives.
• Scratches : Apply saddle soap to a damp cloth and rub the scratch to help it "blend in". It won't go away.

The tips on leather furniture also makes mention that you should never bother with touch-up kits or colored markers. It's nearly impossible to match leather colors and your repair work will only make the scratch more noticeable.

I am just full of tips. What can I say. Go lay on that couch.

Till next time

The New York Real Estate Nurse

Mortgage Rates Make New 2011 Lows

Mortgage rates in New York plunged to new 2011 lows this week.

According to Freddie Mac's weekly Primary Mortgage Market Survey, the national, average 30-year fixed rate mortgage fell to 4.39% this week -- the lowest 30-year fixed reading since November 18, 2010.
The 0.16 drop from last week is the largest one-week rate drop in more than 2 years, and, although the 30-year fixed remains above its all-time lows from November 2010, two other benchmark products made new records this week.

Both the 15-year fixed rate mortgage and the 5-year ARM are reporting lower than at any time in recorded history.

Freddie Mac puts those average rates at 3.54% and 3.18%, respectively.
Mortgage rates are dropping for several reasons, including :

• U.S. economic growth is slower-than-expected
• The U.S. government plans to curb its spending
• Global investors seek the safety of U.S.-backed bonds

The first two items are unfavorable for business and, as a result, stock markets have sold off all week. The Dow Jones Industrial Average posted an 8-day losing streak and Thursday it made its biggest one-day loss since 2008.

When equities lose, bonds tend to gain. This leads mortgage rates lower.
Mortgage rates also fell on "safe haven" buying; bond buys made because of their relative safety to risky assets.
Mortgage bonds are considered "safe" so when economies and geopolitics are uncertain, mortgage rates improve.

Going forward, there are reasons for mortgage rates to fall again. The economy won't rebound overnight and neither will investor confidence. However, markets can be fickle and rates have been known to reverse quickly.
With rates as low as they've been history, it's an advantageous time to refinance your home loan, or purchase a new property.

Do you have the job, down payment and closing cost? Buy your home now.  Maybe by 2020, you will look back and say, 2009 and 2011 were great years to purchase a home, and glad I did.

Till next time

The New York Real Estate Nurse

Closing At The Start Of September? Watch Out For Labor Day.

Home sales have heated up, according to the National Association of REALTORS®. I am a member.

More homes are going under contract this summer than went during the winter or spring seasons. Many of these homes are scheduled for late-August/early-September closings. So follow the trend and watch the monthly statistics.

If your home is among them, plan ahead.

Like for the rest of the U.S. workforce, Labor Day is a popular vacation time in the real estate, title and mortgage industries. Closings come together more slowly when the parties involved are on holiday. In addition, when issues arise, they are often slower to resolve because not everyone is "present".
Therefore, if you're under contract to buy or sell your home, or have a refinance in-process with a lender, get proactive with your home and your loan. Finalize your approval as quickly as possible.
Here are some tips to help your loan clear faster:

1. Prepay your first year of homeowners insurance, effective your closing date. Provide proof of payment to your lender.
2. Document and deposit all gifts and retirement withdrawals to be used at your closing as early in the process as possible.
3. Get Power of Attorney forms signed by all parties, and lender-approved, if applicable.
4. When your lender makes a paperwork request, fulfill the request within 24 hours.
5. Always check with your Realtor because all States have different rules and regulations. 

There are steps you can take to make your closing go more smoothly, too.
First, if your transaction is purchase, don't leave your walk-through for the last-minute. Schedule it for as early as reasonable. This way, if there's an issue, there's ample time to resolve it. Remember, it's harder to solve problems when one or more parties to the transaction is away on vacation.

Second, if you have planned time off between now and your closing, make it known, and be reachable in the event of emergency by phone, email or both.

Lastly, if possible, avoid scheduling your closing for the Friday before Labor Day or the Tuesday after. Real estate, title and lender offices are notoriously short-staffed and overworked on these two days. Routine tasks take longer than usual.

You can't stop people from going on vacation, but you can plan for it. It would be foolish not to.

So it goes to be prepared.

Till next time

New York Real Estate Nurse

A Mortgage Rate Strategy For July's Jobs Report

At 8:30 AM ET Friday, the Bureau of Labor Statistics will release the July 2011 Non-Farm Payrolls report. Mark it in your calendar. If you've been watching mortgage rates fall to new all-time lows this week and fear a mortgage rate reversal, Friday could be the day.

The monthly Non-Farm Payrolls data can swing a big stick in mortgage markets.
More commonly called "the jobs report", Non-Farm Payrolls details the U.S. workforce, providing sector-by-sector analysis of workforce, as well as the national Unemployment Rate.
The jobs report affects mortgage rates because of how important jobs are to the U.S. economy.
When there are more working Americans:

1. There's more consumer spending, a boost to businesses
2. There's more tax collection, a boost to governments
3. There's more personal savings, a boost to households

In July, analysts anticipate 85,000 new jobs created. This would be a 4-fold increase from June's 18,000 figure.
The Unemployment Rate is expected to remain unchanged at 9.2%.
For rate shoppers and home buyers in new york , these Wall Street expectations can be as important as the actual data itself. Right now, traders placing bets, expecting 85,000 new jobs in July. If the final tally is more than 85,000, traders will load up on equities at the expense of bonds. This is because job growth is good for the economy.

When bonds sell off, rates rise.
Conversely, if jobs growth is less than 85,000, mortgage rates should drop.
Mortgage rates are near all-time lows this morning. By Friday, they could rise. The safe move is to lock your rate today. Rates may fall when the jobs report is released, but there's much more room for rates to rise.

It's always a crap shot. Don't roll the dice. Lock and load your historical mortgage rate.

Till next time

The New York Real State Nurse

16 of 20 Case-Shiller Cities Show Improvement In May

Standard & Poors released its May 2011 Case-Shiller Index this week. The index measures change in home prices from month-to-month, and year-to-year, in select U.S. cities.

May's Case-Shiller Index showed a 1 percent increase from April 2011. Home values rose in 16 of the Case-Shiller Index's 20 tracked markets. Only Detroit, Las Vegas and Tampa fell. Phoenix was flat.
Don't look too far into the findings, though. Like the FHFA's Home Price Index, the Case-Shiller Index is rife with flaws.

The first flaw of the Case-Shiller Index is its limited geography. Despite being positioned as a national housing index, Case-Schiller Index is sourced from just 20 cities nationwide. There are more than 3,100 municipalities nationwide. As I said before, its about location, location and location.

The Case Shiller Index's second flaw is that it ignores all home types excepts for single-family, detached homes in its findings. Condominiums, multi-family homes, and new construction are not included in the Case-Shiller Index. We have a lot of Condo and Co-Op Buildings.

In some markets, these excluded home types outnumber the included ones.

Furthermore, the Case-Shiller Index is flawed in that it takes 60 days to release.
The Case-Schiller Index reports on a housing market from 2 months ago -- hardly helpful for today's buyers and sellers in Queens, Brooklyn and the New York area , trying to make sense of today's real estate market data.

When you want real-time housing market data, therefore, for Queens or anywhere else, look past the Case-Shiller Index and talk to a real estate professional instead. It's where you'll get your best information.

The New York Real Estate Nurse has the Vital Statistics. Who's monitoring your Vital Signs?

Till next time

The New York Real Estate Nurse

What Will The Debt Ceiling Agreement Do To Mortgage Rates?

The United States is projected to reach its legal $14.294 trillion debt limit today. The limit was set by Congress February 12, 2010. The U.S. Treasury may not issue new debt beyond the debt ceiling.
Since April 2011, Congress has debated ways to remain below the nation's $14.292 trillion borrowing limit. The debate commenced with the passage of the 2011 U.S. Federal Budget which featured a $1.645 trillion deficit.
This multi-trillion dollar deficit ensured that the debt ceiling would be touched at some point during the current fiscal year.
That date was May 16. It took an intervention from the Treasury Secretary to temporarily extend the limits; an "extraordinary measure" meant to keep the U.S. government from defaulting on its debt.
With additional room to borrow, then, the U.S. Treasury's new debt ceiling date was moved to August 2. Congress has been debating the federal budget since mid-May with the dual-goal of (1) Remaining below the federal debt limit, and (2) Creating a budgetary surplus for the future.
An agreement is expected today.
For home buyers and rate shoppers in new york city , this is an important development. The debt ceiling agreement will influence mortgage markets and, as a result, require amendments to home affordability calculations. As mortgage rates change, your purchasing power does, too.
Unfortunately, we don't know in which direction mortgage rates will go.
Since the prospect of a deal was first hinted Friday, mortgage rates have been improving. Conforming, 30-year fixed rates are down nearly 0.250 percent, lowering a $150,000 mortgage payment by $22 per month.
The final deal terms of a deal, however, could lead rates higher.
As always, the safest play is to lock your mortgage rate if you are comfortable with its proposed payment. Yes, mortgage rates may move lower in the future but, then again, maybe they'll move higher.

Congress remains a mess, the bickering continues. Whats a country to do? VOTE!!!

Till next time

The New York Real Estate Nurse