The song remains the same. We are undulating along the economic winds. Existing Homes Sales seem to shadow the economy. The trend, which is usually are friend, is the way to follow along to make economic sense out of all this. You would think?
Shadow Inventory slowed during the Banker's Robo Signing mess and less inventory was released to the public for sale. The January 2011 low of 7.5 months was a result of that mess. Now, 6 months later we are at 9.5 months of inventory, their are other factors in-vowed, spring selling season for one, tightness in the mortgage market another and on and on. Now to the meat of this report.
Home resales slipped for the 3rd straight month, according to data from the National Association of REALTORS®.
The Existing Home Sales posted a 1 percent drop from May as the number of homes sold fell to a seasonally-adjusted, annualized 4.77 million units. It's the monthly report's lowest reading since November 2010.
The report also showed the national supply of homes for sales rising to 9.5 months -- also its highest reading since November 2010. Home Supply is the amount of time it would take to exhaust the complete home inventory at the current pace of sales.
June's Existing Home Sales data would have been stronger if not for a high contract cancellation rate. As compared to May's 4 percent rate, June's cancellation rate was 16 percent; an elevated figure that "stands out in contrast" to what's typical, according to the REALTOR® trade group.
By region, home resale activity varied:
Northeast : -5.2% from May
South :+0.5% from May
Midwest : +1.0% from May
West : -1.7% from May
This disparity from region-to-region highlights an important housing market concept. Namely, that all real estate is local. Because just as the Existing Home Sales varies on a regional level, it varies on a state-wide level, too.
What's true for California housing is not necessarily what's true for New York housing, for example. Each of the 50 states has its own trends, and within those 50 states, there are thousands of cities and neighborhoods, each with their own trends, too.
The "national housing market" doesn't exist, so national data is rendered somewhat useless.
For data in New York City or your local market, talk to your real estate agent.
According to the Census Bureau, Single-Family Housing Starts rose to 453,000 on a seasonally-adjusted, annualized basis in June -- a 9 percent spike from the month prior and the highest reading in 3 seasons.
A "Housing Start" is defined as a home breaking ground on new construction.
June's reading is largest one-month jump since June 2009. The reading surprised Wall Street despite that the Homebuilder Confidence survey may have foreshadowed the results.
Monday, the National Association of Homebuilders reported that builders are more confident about the future of the new home sales market, and forecast a large increase in sales over the next 6 months.
For buyers of new construction, the news is mixed. Rising confidence may mean that builders in Queens and Long Island are less willing to negotiate on upgrades and/or price, but rising construction levels add inventory to an already fragile market.
Adding to the nation's home supply without a corresponding increase in buyer demand shifts negotiation leverage away from builders.
The Census Bureau also reported on Building Permits.
In June, permits for single-family homes rose by 1,000 units nationwide on a seasonally-adjusted, annualized basis. This, too, bodes well for housing because 89 percent of homes with permits start construction within 60 days.
Momentum should carry forward into fall.
If you're buying new construction in New York , ask your real estate agent about local home supply, and how the market is trending. With mortgage rates low and the fall buying season approaching, you may find some of your best deals in the next few weeks.
Always remember, all Real Estate is local and all housing statistics are influenced by there locality.
So happy house hunting.
By the way, you can now follow me on a new Blog I have started called THE NY REAL ESTATE NURSE.
WWW.THENYREALESTATENURSE.COM
The S&P/Case-Shiller Home Price Indices are the leading measures for the US residential housing market, tracking changes in the value of residential real estate both nationally as well as in 20 metropolitan regions. The indices are calculated monthly and published with a two month lag.
The Case-Schiller Home Price Index fell to a new low in March,12 0f 20 cities tracked showed new lows. Take a look at these values. The proof is in the numbers. Double Dip!!!
With an index value of 138.16, the 20-City Composite fell below its earlier reported April 2009 low of 139.26. The March 2011 report confirmed a double-dip in home prices across much of the nation. In addition to the National Index, the 20-City Composite and 12 MSAs — Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland (OR) and Tampa — all hit their lowest levels as measured by the current housing cycle. The 20-City Composite’s March 2011 level is the lowest since March 2003. This cycle’s peak for the 20-City Composite was in July 2006. The index indicates home prices are now more than 33% below that level.
New York prices slipped 0.9% from the 1st. quarter of this year, down 3.4% from a year ago. The New York area (MSA) is now down 25% from its peak June 2006 prices. Home values continue to slide, plain and simple. The trend is your friend.
If your buying a home, the Case-Shiller Index is indicating the trend in home values for you. All real estate is local. Enjoy the trend to the downside while it lasts. Prices are being reduced and home affordability is knocking on your rental doorstep.
ARE YOU READY TO KICK THE TIRES
If you can answer YES to these 4 questions, you will be licking your chops.
1. Do you have a job?
2. Do you have money for a down payment?
3. Do you have money for closing cost?
4. Do you have a FICO credit score breathing over 580?
Yes,Yes,Yes, and Yes. Stop paying your landlord, you can afford to buy a home.
The state of housing is in big trouble, but it doesn't have to be for you.
DISTRESSED HOUSING
There are approximately 2.25-2.40 million homes now in foreclosure, and another 2 million mortgages with payments more than 90 days past due. They are headed toward swelling the inventory further.
Mortgage servicers issued more public default notices in May than April. Realty Trac has said: Foreclosure filings were up 17% in the 5 Boroughs of New York City in May compared to April. Still foreclosure activity in New York has stalled due to the Robo-Signing mess.
There was a time when you could stop paying your mortgage, stay in your home for approximately 531 days before the Marshall came and kicked you out. Today, you can stay even longer because of the Robo-Signing mess. Put you feet up, relax, you can get about 2 years now. Housing problems still abound.
The Subprime Crisis and bursting of the housing bubble has had its profound effect on home sellers and buyers. The situation has not been pleasant for many people. People are hurting from the cause and effect of the housing crisis. There is too much blame to go around and I will leave it at that.
The American economy is slowly chugging along. Jobs are few and far for many. Congress is more interested in politics than they are helping the American people. I believe we will have a slow housing recovery, and I mean slow. Maybe by the end of this decade we will see a normalized housing market that your parents had over a decade ago. Wow, the economy is a mess.
I want you to buy a home today because it is cheaper than yesterday. Mortgage rates are at historical lows and home prices are cheaper than they were 5 years ago.
Finally, if you answered YES to the 4 questions earlier. You have no other choice. Go ahead and give your landlord 30 days notice. Grab those new keys and lay down that mat that says "Home Sweet Home".
WHO IS YOUR AGENT WORKING FOR?
You are meeting your real estate agent for the first time. You are buying, selling or leasing real property. The agent hands you a form and ask you to sign it before you begin this new and wonderful (working together) relationship. You just signed a disclosure form on how you are being represented. Did you understand what you were signing?
New York State Disclosure Form for Buyer and Seller. Reads like this:
THIS IS NOT A CONTRACT
New York State law requires real estate licensees who are acting as agents of buyers or sellers of property to advise the potential buyers or sellers with whom they work of the nature of their agency relationship and the rights and obligations it creates. This disclosure will help you to make informed choices about your relationship with the real estate broker and its sales agents.Throughout the transaction you may receive more than one disclosure form. The law may require each agent assisting in the transaction to present you with this disclosure form. A real estate agent is a person qualified to advise about real estate. If you need legal, tax or other advice, consult with a professional in that field.
Disclosure Regarding Real Estate
Agency Relationships
Seller’s Agent
A seller’s agent is an agent who is engaged by a seller to represent the seller’s interests. The seller’s agent does this by securing a buyer for the seller’s home at a price and on terms acceptable to the seller. A seller’s agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A seller’s agent does not represent the interests of the buyer. The obligations of a seller’s agent are also subject to any specific provisions set forth in an agreement between the agent and the seller. In dealings with the buyer, a seller’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.
Buyer’s Agent
A buyer’s agent is an agent who is engaged by a buyer to represent the buyer’s interests. The buyer’s agent does this by negotiating the purchase of a home at a price and on terms acceptable to the buyer. A buyer’s agent has,without limitation, the following fiduciary duties to the buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A buyer’s agent does not represent the interest of the seller. The obligations of a buyer’s agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer. In dealings with the seller, a buyer’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the buyer’s ability and/or willingness to perform a contract to acquire seller’s property that are not inconsistent with the agent’s fiduciary duties to the buyer.
Broker’s Agents
A broker’s agent is an agent that cooperates or is engaged by a listing agent or a buyer’s agent (but does not work for the same firm as the listing agent or buyer’s agent) to assist the listing agent or buyer’s agent in locating a property to sell or buy, respectively, for the listing agent’s seller or the buyer agent’s buyer. The broker’s agent does not have a direct relationship with the buyer or seller and the buyer or seller can not provide instructions or direction directly to the broker’s agent. The buyer and the seller therefore do not have vicarious liability for the acts of the broker’s agent. The listing agent or buyer’s agent do provide direction and instruction to the broker’s agent and therefore the listing agent or buyer’s agent will have liability for the acts of the broker’s agent.
Dual Agent
A real estate broker may represent both the buyer and seller if both the buyer and seller give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, and the buyer and seller. An agent acting as a dual agent must explain both the buyer and seller that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation. A seller or buyer may provide advance informed consent to dual agency by indicating the same on this form.
Dual Agent with Designated Sales Agents
If the buyer and seller provide their informed consent in writing, the principals and the real estate broker who represents both parties as a dual agent may designate a sales agent to represent the buyer and another sales agent to represent the seller to negotiate the purchase and sale of real estate. A sales agent works under the supervision of the real estate broker. With the informed consent of the buyer and the seller in writing, the designated sales agent for the buyer will function as the buyer’s agent representing the interests of and advocating on behalf of the buyer and the designated sales agent for the seller will function as the seller’s agent representing the interests of and advocating on behalf of the seller in the negotiations between the buyer and seller. A designated sales agent cannot provide the full range of fiduciary duties to the buyer or seller. The designated sales agent must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship with designated sales agents before agreeing to such representation. A seller or buyer may provide advance informed consent to dual agency with designated sales agents by indicating the same on this form.
This form was provided to me by____________________(print name of licensee) of___________________(print name of company or brokerage), a licensed real estate broker acting in the interest of the: Seller or Buyer
Remember this. THIS IS NOT A CONTRACT. It is just a disclosure of who is working for whom in a Real Property transaction and how.
BIG QUESTIONS?
Do you know what you’re signing?
Do you know who is working for whom?
Is the agent working for the seller?
Is the agent working for the buyer?
Is the agent working for both buyer and the seller?
Is their a SECRET AGENT?
Lets answer some questions.
Q: What is Agency Disclosure?
A: It's The Law! As of January 1, 2011 a revised real estate licensees disclosure law went into effect in New York. As of 1/1/2011 the law requires real estate agents to have clients/customers sign a form stating that they understand whom the agent represents, and to whom the agent will give or won't give "undivided loyalty," when they enter into a relationship. It also covers advance dual agency disclosure.
The disclosure law is designed to clarify the roles of buyers and sellers agents, in order to help you make informed choices about your relationship with the real estate broker and its sales associates. There are multiple role's the buyer and seller agent can play.
MORE QUESTIONS?
Q: Are you a Client or Customer?
A: Only you can make that decision when purchasing or leasing real property.
Q: What is a Client?
A: Someone who is paying for a service and being represented as a Principle. Someone who has agency or a legally recognized relationship with the real estate broker and their agents.
Q: What representation do they get?
A: The Client/Principle gets six Fiduciary Duties.
1) Confidentiality
2) Undivided Loyalty
3) Reasonable Care
4) Obedience
5) Duty to Account
6) Full Disclosure
These duties are contained in the Code of Ethics for Realtors.
Q: What is a customer?
A: Someone who has no contractual relationship with the real estate broker or its agents. Someone who is not paying for a service.
Q: What representation does the customer get?
A: 1) They are entitled to fair and honest treatment.
2) Disclose known material facts.
Q: How do you want to be represented?
A: Client or Customer?
You must decide how you want to be represented in a real property transaction. If you don't understand the disclosure, please ask you real estate agent to clarify their role. Do not allow for SECRET AGENTS.
For your entertainment only, please enjoy the music video. Lyrics by Steve Barri and P.F. Stone. Performed by Johnny Rivers.
For any questions concerning New York State Agency Disclose Law. Please contact:
***NEWLY CONSTRUCTED ONE AND TWO BEDROOM APARTMENTS FOR SALE***
Custom-built Cabinets, Energy-Efficient Windows, Dishwashers in every unit. Private Outdoor Terraces, Patios, and Laundry Room. Amenities galore, to numerous to type. You get the idea.
Have you ever seen this advertisement? Will it make you want to read more? Have you been searching for that home that you can't afford in New York City? Maybe you have not been searching in the right place?
Your income is middle of the road, your credit score and credit history is good. You have the means to reasonably meet monthly debt obligations, because you have the job. You have a little savings for a small down payment and some closing cost. Then step right up, this may be for you.
Welcome to the land of Affordables. The New York City Department of Housing Preservation and Development (HPD) is the largest municipal developer of affordable housing in the nation. Over the years, HPD and their sister agency the New York City Housing Development Corporation (HDC), have created or preserved the volume of Affordable Housing in the 5 Boroughs. They have a big job to do. They have homes for you.
You can find all this information at www.nyc.gov/. housing and buildings. Also see what is available for buying and renting. Just peruse their website. The city has a ton of information for the person seeking affordable housing. It may just fit you.
Freddie Mac said Thursday the average rate on a 30-year fixed mortgage rose to 4.83 percent from 4.61 percent in the previous week. Last month, the rate hit a 40-year low of 4.17 percent.
The average rate on the 15-year loan also increased to 4.17 percent from 3.96 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
I will try not to talk about rates much more. They can move up and down fast, depending on which way the economic winds are blowing, and who is in and out of the Bond Market. Did I mention Mr. Bernanke's name? I must of forgot. Always, speak to your mortgage banker concerning mortgage rates.
I just hope some home buyer will be able to close their new rate and have enough purchasing power as they had at a lower rate. Rising rates can be deal killers. Lock your rate so you know your payment.
Home affordability is dependent on low mortgage rates. Most median incomes don't provide enough income to produce that median priced home. Uncle Sam we need more help. Can you hear me?
Want to buy a home? You don't have the 20% down payment. Your FICO score is not up to the Buffett's and the Gate's, did I forget the Rockefeller's? You have come to the right place. Uncle Sam is the man. He is doing all he can to keep the housing market afloat. The innovation of programs and ways to help the general public don't stop. I say climb aboard for the ride. This is the best time to purchase a home. Home price's and mortgage rates are low and Uncle Sam is here to help. Go to the FHA. Go to the VA if you are a Veteran. Just go, the money is there. See your Mortgage Banker soon.
The Federal Housing Administration, generally known as "FHA", is the largest government insurer of mortgages in the world. A part of the United States Department of Housing and Urban Development (HUD), FHA provides mortgage insurance on single-family, multifamily, manufactured homes and hospital loans made by FHA-approved lenders throughout the United States and its territories. While borrowers must meet certain requirements established by FHA to qualify for the insurance, lenders bear less risk because FHA will pay the lender if a homeowner defaults on his or her loan. FHA has insured over 38 million home mortgages and 47,205 multifamily project mortgages since 1934.
Get a FHA mortgage, they are the best game in town. They are backing about 40% of all purchase mortgage loans nationally in 2010. The banks do the lending and Uncle Sam does the insuring.
Go for it. They are hot. They will lend you a lot. Because you live in the New York City, Long Island and the Westchester area. You live in a so-called “higher cost” area where the limits will be:
One-Unit — $729,750
Two-Unit — $934,200
Three-Unit — $1,129,250
Four-Unit — $1,403,400
If you can make the payments, collect a little rent; be knighted a Landlord.
You are surely on your way to becoming a Housing Guru. No more staying up late to watch all those real estate infomercials. Side note: buyer beware.
If your wanting information, be sure to go to the government's website: http://www.hud.gov/.
The Federal Housing Administration (FHA) is loaded with information, list of frequently asked questions (FAQ ). Topics include:
New Construction
Wood Destroying Insects/Termites
Utilities – Well and Septic
Inspections ; Certifications
Cost Approach
Accessory Dwelling Units
Manufactured Housing
Two Unit Properties
HECMs
Lender Concerns
Reconsideration of Value
203(k)
Appraisal Portability
FHA Appraisals
Title Concerns
And much, much more.
Reading government websites can inform you. You can also play "Google That Word", it helps when you don't understand something. You should always call a professional for all your real estate needs.
This is the silver lining of the housing crisis. Thanks to low FHA mortgage interest rates, low down payments and reduced home prices, buying a home is more affordable than ever. This bodes well for the future of working and middle class families. You go America!!!
