Boise’s Best Realtors

Although the housing recovery continues to roll in most parts of the U.S., there were fresh signs last week about the bumps ahead.

Without question, the latest unemployment and new layoff numbers represent the biggest impediments in the way of a full, vigorous recovery in home sales and prices. Though some economists say the recession either ended in August, or will be over shortly, the latest jump in unemployment to 9.7 percent, the highest rate since 1983, is like a nagging pain that just won’t go away soon.

On the other hand, most housing indicators remain positive. Spending on residential construction — that’s single and multifamily housing — surged by seven percent last month, and is on track to post its first double-digit annualized rate of increase after 13 straight double-digit quarterly declines.

Housing prices in key local markets around the country also continued to show healthy increases.

Meanwhile, the mortgage market continues to beckon to home buyers with near record low rates. Applications for all new loans jumped by 17 percent last week, according to the Mortgage Bankers Association, including a nearly 10 percent increase in applications to purchases houses.

Rate quotes dropped to a flat five percent for 30-year fixed rate mortgages, and just four and a half percent for 15 year loans.

And remember, these are average rate quotes. People with superior credit or extra big downpayments are hearing quotes in the upper 4 percent range for 30 year and low four percent range for 15 year fixed.

It just doesn’t get much better than that.

For real estate questions please contact; Jake Conklin at (208) 866-7866 or  email: jake@jakeconklin.com

Savvy investors are always the first to jump in a potentially profitable housing market and a new survey indicates things are heating up.

More than 12 percent of homebuyers today plan to purchase a home as an investment, compared to less than half, only 5.6 percent, just seven months ago, according to a recent Move.com Homeownership Survey.

Foreclosure buyers account for 25.3 percent of consumers interested in purchasing a home and 42 percent of potential foreclosure buyers regard their purchases as investments, while 57.6 percent plan to live in the foreclosed home themselves.

“This latest Homeownership Survey validates what many had hoped to see in the housing markets — affordable prices and ample inventories are restoring the appeal of real estate to investors while providing opportunities for first time home buyers to enter the market,” said Move, Inc.’s chief revenue officer, Errol Samuelson.

Interest rates below 5 percent for much of the year and low home prices, which may be at or near market bottom, are also bringing investors back to the fold.

The new and improved home-buyer tax credit, no longer just for first time home buyers, can also be a boost for those taking the practical approach to investing by buying their own home first.

The survey of 1,004 consumers, conducted from October 16 to 18 this year, found:

• Foreclosure buyers are confident they will profit from discounted purchase prices, as well as healthy appreciation rates over the next five years.

• Most foreclosure buyers, 58.2 percent, expect to pay 20 percent or less than market price for a foreclosure, while 38.5 percent expect a 25 percent or greater discount.

• Expectations are high — 73 percent expect their properties to appreciate ten percent or more in five years, 28 percent expect their purchases to appreciate 20 percent or more.

Given the current market of flat and falling home prices, that may sound like high hopes, but RealtyTrac.com explains that lenders want to unload overhead-heavy inventories of repossessed and foreclosed home.

That forces lenders to list their homes below market and offer properties at a discount, giving the buyer some built in equity.

• Foreclosure buyers intend to convert their foreclosures into rentals (13.2 percent), fix them up for re-sale (11.3 percent), or house a family member until the home can be sold at a profit (17.4 percent).

In some markets, especially resort and vacation rental markets, where rents are higher, conditions bode well for investors who want to enjoy positive cash flow as they wait for equity to build.

“If you find a well priced property located in a healthy rental market and are able to manage and monitor the property and maintain a positive cash flow from the onset for a unit used strictly for income purposes, rather than being held with the expectation of price appreciation, this could be a good time to become a landlord,” said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Sure you can lose weight, get in shape, launch a business or find a new job.

But haven’t you also procrastinated long enough about buying a home?

How long has it been since you upgraded your home with a new roof, spiffed up landscaping or pulled some other home improvement?

And that post-World War II ranch home of yours could certainly use a few energy efficient do-overs.

Look to low mortgage interest rates, bargain home prices and other favorable market conditions to give you the resolve to consider home sweet home in your list of must-dos next year.

• Join the nearly 18 percent of Americans who say they’ve resolved to become a first-time homebuyer in 2010, according to a new Move.com survey. That’s both a smart move and a timely one. Mortgage rates are at record lows, prices are down and the $8,000 first-time home buyer tax credit has been extended until April 30, 2010. It’s also been expanded to include a $6,500 tax credit to move-up buyers.

• More than 15 percent of those who responded to the survey said saving money to purchase a new home is their top real estate resolution for the New Year. Resolve with them to learn the best way to budget, plan ahead and save money.

• Nearly 40 percent say No. 1 on their list of resolutions is starting a home improvement. Cheap home equity money should help them not only start, but also complete the job. Calabasas, CA-based Informa Research Services found home equity lines of credit (HELOCs) for $50,000, with an 80 percent loan-to-value note, were available in early December at an average variable rate of 4.98 percent. Some rates were as low as 2.74 percent.

• The Move.com survey also found 9.1 percent most wanted to fix their credit so they can buy a home next year. To get started all you need to do is take a look at your next credit card statement for a toll free number directing you to counseling help. That’s part of the new, but little-known mandated disclosure provisions in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act).

• Nearly 16 percent are wisely considering buying an investment property as their top resolution. The couldn’t have picked a better time in the last half decade. Another Move.com survey recently found more than 12 percent of homebuyers today plan to purchase a home as an investment, compared to less than half, only 5.6 percent, just seven months ago, thanks to more attractive investment conditions.

“If you anticipate inflationary conditions in the future, investment property could be a good bet to hedge against it,” said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Even the grumpiest, grinchiest economist would have to admit that New Year’s 2010 looks a whole lot more positive for real estate and housing than things did last year at the same time.

You may remember that dark and scary time. We had just come through the Wall Street financial panic, but it wasn’t yet clear what the federal government could - or would - be able to do to prevent a total collapse.

The outlook right now is a complete contrast: Home sales have been rising for months, thanks in part to the federal tax credit programs; low mortgage rates; new home starts and permits are up in most parts of the country; and prices generally are trending up in most of the markets that got shell-shocked in the bust.

Now new market data from last week point to continued growth just ahead, but with an ominous warning sign as well.

The latest pricing numbers released by the Federal Housing Finance Agency found home values nationwide up modestly in the latest month — by six tenths of a percent. That sounds really small, but annualized it comes to more than seven percent, which is not bad at all.

Consumer confidence has been trending upward nationally, by 7.5 percent during December, according to the University of Michigan’s bellwether survey.

But now to a sobering subject: Mortgage money is getting more expensive, week after week. At least one big player in the market — Freddie Mac — is projecting rates to move from just over five percent today for 30-year loans to 6 percent or higher later in 2010.

Freddie Mac’s deputy chief economist, Amy Crews Cutts, says the Federal Reserve’s scheduled phase-down of its multi-billion dollar purchases of mortgage backed securities, plus expected moderate growth in the economy, will force rates at least a percentage point higher.

Mark Zandi, chief economist for Moody’s Economy.com, agrees. He said last week that six percent for mortgages “sounds about right. I don’t think there’s any question rates are headed up.”

Bottom line here: If you care about rates, nail down financing sooner, not later. It could cost you if you wait.

Want to see what you qualify for? Call us! (208) 866-7866 or email us:  jake@jakeconklin.com

A government-incentivized program that acknowledges that not all homeowners are able to afford and keep their homes is intended to expedite the short sale process.

“The push right now is for servicers to avoid foreclosure and the push is coming not only from The Obama administration and the Treasury but also from the owners of the loans such as Fannie Mae and Freddie Mac. And the focus right now is on short sales. So, I think in 2010, you’re going to see a lot more short sales and hopefully reduced foreclosures,” says Travis Hamel Olsen, chief operating officer of Loan Resolution Corporation.

Guidelines issued earlier this month for the $75 billion housing plan include the potential for banks to get government incentive payments in cases where borrowers are allowed to sell their home at a loss, bypassing the foreclosure process.

“Essentially the way the program works is borrowers will have to go through the Home Affordable Modification Program (HAMP) and be denied and then they will be eligible to participate in the short sale plan which is called Home Affordability Foreclosure Assistance (HAFA),” explains Olsen.

Calculators are available at MakingHomeAffordable.gov to help you see how much of a mortgage modification you might qualify for as well as answer some typical questions that homeowners have regarding modifications.

If, however, a modification isn’t possible, Olsen says that’s when this latest government move may play a role.

“If the short sale is completed then the borrower [homeowner] can receive up to $1500 in relocation assistance and the servicers can get up to $1000 compensation,” says Olsen.

“I think it’s a big step in the right direction,” However, he says the success of the program is dependent on the buy-in of the subordinate (second-mortgage) lien holders.

“You have a primary lien holder and they’ll love this program because the servicers will get paid an additional $1000 for completing the short sales. On the other hand, you have all the subordinate lien holders in a short sale who also need to give their approval for the short sale in order for it to happen. The problem, though, is that the subordinate lien holders are the ones that are getting totally wiped out and under the program they would receive $3000 for their lien and in exchange they would have to write off the remaining balance of the loan and give up any rights that they would normally have to pursue the borrower thereafter for the remaining balance,” says Olsen.

Olsen’s company works with mortgage servicers and institutional investors to handle and expedite the short sale process. He says about one in five homeowners is underwater (owing more on their mortgage than their home is worth).

“The traditional timeline out there is anywhere from 60 days to six months to get an approval. Ours is typically around 15 days,” says Olsen.

He says the new guidelines may help troubled homeowners get out from under faster and get their lives back on track.

“With the short sale closed, [homeowners] can move on with their lives a lot faster. From the real estate agents’ point of view, they spend less time doing short sales and then can go about getting other listings and making more money, and from the banks’ point of view, they’re happy because the volume of short sales that they have going on decreases because we’re resolving so many more so much faster,” says Olsen.

In the end, Olsen says, if you need out of your mortgage a short sale far outweighs a foreclosure. “From the homeowners’ point of view, they have reduced credit damage as compared to a foreclosure. On the flip side, for Fannie Mae or any investor of the loan, their losses are reduced. So they want to avoid the foreclosure and the Real Estate Owned (REO) at all costs and so they incentivize homeowners to do the short sale by reducing the credit damage to homeowners’ credit.”

According to the National Association of Realtors, approximately one in 10 homes sales this year was a short sale.

If the latest numbers on credit card delinquency is any indicator, U.S. consumers are starting to get a handle on their credit card debt.

The Associated press reports: “The decline is significant because of its timing. Delinquency rates usually rise in the third quarter from the prior period as people spend on summer vacations and back-to-school shopping,” said Clifton O’Neal, a TransUnion spokesman.” How you handle your debt affects your credit score and rating, which is what affects your ability to get a loan to purchase a home. The good thing about credit scores is that they are merely a snapshot of your credit at a given time. Missed payments, high credit vs. limits, too much credit, et. al., can all be corrected and cleaned up and your credit score return to a new high level.

Tim McLaughlin, senior vice president of Weichert Financial Services, answers the question – what dings on your credit affect your score and why it seems all the good loans (low rates, low/zero point, and even product availability), seem to favor those with good credit.

The Fair Isaac Corporation maintains the most popularly used score (referred to as the FICO score) and it ranges from 300 to 850. They also have a great resource on how to understand the score: What I like about McLaughlin’s information from his Market Monitor newsletter is that he provides the number of points your score will drop or increase with these items in place or cleaned up.

“There are five major ‘dings’ that impact your DCS (Decision Credit Score, or FICO score) the most, some obvious, some not so obvious:

• Maxed out credit cards: Doesn’t seem like a big deal in the grand scheme of things, right? Oh, it is: a maxed out credit card can reduce your DCS anywhere from 10 to 45 points, according to Fair Isaacs, a hefty price to pay for accumulating debt.
• 30 Day late mortgage payment: In addition to the late fees, this occurrence adversely impacts your DCS by 60 to 110 points … a whopping impact for being late on your mortgage.
• Debt settlement: Also known as debt arbitration or debt negotiation, it is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The downside, a 45 to 125 point drop in your DCS.
• Foreclosure: Unfortunately, an occurrence we are seeing far too often as of late. In addition to the event, it will reduce your DCS 85 to 160 points.
• Bankruptcy: The event that would have the single biggest negative impact on your DCS, reducing your score 130 to 240 points; an almost irreparable event.”

FICO has its own web site dealing with the scoring prices and it’s a good starting place for those trying to repair their credit rating.

Here are the three credit reporting agencies that use the FICO score:

Equifax (www.equifax.com)

TransUnion (www.TransUnion.com)

Experian (www.Experian.com)

With all the talk about the price and value of real estate these days, you might be wondering how you know when it’s a good time to jump on the bandwagon and buy a new home. While some people have no problem knowing when it is a good time to move into a new home, sometimes residents linger in a home long after it has ceased to fulfill their needs.

There are quite a few ways that you can tell that you should look for a new home instead of staying in an environment that isn’t comfortable to your lifestyle or your family. One big hint that you’d be happier living elsewhere is if you find yourself daydreaming about living in a different area, a different type of home, or even a different country. Do you find yourself watching real estate television or reading the real estate section of the newspaper on a regular basis? If any of these options are valid options, then maybe you should pursue them.

There is nothing of interest for you in your present location and you need to travel for all of your hobbies or activities, you might want to consider moving closer to that area. Even if a home closer to your work or hobbies is a bit more expensive, you’ll likely save money on commuting costs and have more free time as well.

Sometimes the reason that you would be better off buying a new home is that your old home doesn’t fit your requirements anymore; this can be for a variety of reasons like a change in your family or work life. Many people buy a new house after having a baby so that they can have more space after living in a home that was ample for two people. Other people might buy a new home because they have an elderly parent or a college-aged child move back in with them for financial reasons. Changing jobs is a good reason to buy a new house in a different area or even buying a smaller, less expensive home if your family will have a smaller income as a result.

Another good reason to buy a new home is when your old home doesn’t meet the needs of one or more of the residents physical needs. If you or someone else in your home has mobility problems that require an on-level entrance or doorways that can allow a wheelchair access then it’s likely that if your current home doesn’t provide that, a new home might be a good idea.

Last, but not least, if your neighbourhood is changing in a way that you’re finding makes you not enjoy living in the area, then you might want to search out a new residence elsewhere. It’s not uncommon, when you own a home over a long period of time, that the neighbourhood that you have been living in changes. Sometimes these changes are due to rezoning; sometimes a neighbourhood will develop a higher crime rate, especially if there are a high percentage of homes that have become vacant in the area.

Any of these reasons are a good reason to look for a new home, though you might have other reasons that are all your own to look for a new home. When you look for a new home, take the time to make sure that you research what you and your family will need out of a home and a neighbourhood before starting your search so that you can ensure that you find a location that will suit your needs for years to come.

Start Your Home Search Now:  www.jakeconklin.com

$8,000 Tax Credit For New Home Buyers

• As of Friday, November 6, 2009, President Obama has signed an extension & expansion of the popular first-tim homebuyer tax credit.
   
• Must not have owned a home for the past 3 years to qualify as a first time buyer.
   
• The extension takes the current tax credit and moves the deadline from November 30, 2009 until April 30, 2010.
   
• A sales contract must be signed by April 30, 2010 and buyers have until June 30, 2010 to close on a home.

$6,500 Credit For Move-Up Buyers
 

• $6,500 Expansion for Current Homeowners who sell their current property and purchase another home.
   
• The bill has been expanded to include current homeowners who have lived in their primary residence for 5 of the past 8 years.
   
• Current homeowners who close on a new primary residence will receive a $6,500 tax credit if they sign a sales contract by April 30, 2010 and close by June 30, 2010.
   
• The new home does not have to be more expensive than the current home to qualify.
   
• The $6,500 expansion is not retroactive and includes only homes closed on between November 6, 2009 and June 30, 2010. 

INCOME LIMITS RAISED!

The new bill raised income limits for those eligible

• Individuals can now make up to $125,000/year
   
• Couples can now make up to $225,000/year 

OTHER POINTS OF INTEREST

• The home cannot be more than $800,000 to be eligible for the credit in either case.
   
• Individuals/couples must live in the new home for at least 3 years otherwise the IRS recaptures the tax credit. 

WHAT’S NEXT?

• First find a lender who is familiar with the tax credit and can pre-qualify you for a loan.
   
• Have your lender provide you with a pre-authorization letter stating the loan amount and type of loan. You will need this when submitting an offer.
   
• Once pre-qualified, contact a professional real estate agent to find you a home (that would be me….Jake Conklin….866-7866). 

Click here to start your home search!

FREE Money to Own a Home

$8,000 First time Home Buyer Tax Credit at a Glance

*The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.

*The tax credit does not have to be repaid.

*The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

*The tax credit applies only to homes priced at $800,000 or less.

*The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.

* For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.

* For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

* To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.

* The tax credit does not have to be repaid.

* The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.

* The tax credit applies only to homes priced at $800,000 or less.

* The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.

* Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

For more information about this program or to find out about buying or selling your home to take advantage of this tax credit, please call Jake Conklin (208) 866-7866 or email: jake@jakeconklin.com

Buy a Home-Get $8,000!

Rumors are flying and we have been fighting for the first time homebuyers credit to be extended.  Well, looks like we may have won the battle!

WASHINGTON (Reuters) - The U.S. Senate is expected to act later this week to extend a popular tax credit for first-time homebuyers that is scheduled to expire at the end of next month, Sen. Bill Nelson said on Monday. 

“We should be able to extend that later this week,” Nelson, a Democratic member of the Senate Finance Committee, told reporters before joining President Barack Obama on an Air Force One flight to Florida. 

A number of proposals to extend the $8,000 tax credit are being considered in the Senate. 

Senate Majority Leader Harry Reid floated a proposal last Friday to extend the first-time homebuyer tax credit through December 31, 2010. 

Under Reid’s plan, the $8,000 tax credit would be phased out over time, dropping to $6,000 in April, $4,000 in July, and $2,000 in October, before expiring at the end of 2010. 

Reid’s offer is a counterproposal to Sen. Johnny Isakson, a Georgia Republican, who wants to extend the $8,000 tax credit through June and expand it to all buyers of homes that will be a primary residence. 

Isakson, a former real estate agent, would also raise the income limit of eligible homebuyers to $300,000 per family from the current $150,000 limit. 

Reid is in the midst of negotiations with Senate Republicans over a pending proposal to extend insurance benefits for the jobless, and a procedural vote on unemployment insurance is expected Tuesday. 

If lawmakers can hash out a deal, the housing credit would be attached to the unemployment insurance measure, a Democratic aide told Reuters. 

The U.S. real estate and homebuilding industry is lobbying Congress to extend the tax credit although critics say it gives cash to many buyers who would have purchased a home without the benefit. 

The White House has also raised concerns about the cost of expanding the credit.

Lawrence Summers, Obama’s top economic adviser, told Reuters last week that the administration would be open to extending the existing credit, but wants to see it remain focused on first-time buyers. 

The tax credit was approved in February 2008 and about 1.5 million tax returns filed with the Internal Revenue Service have claimed the credit at a cost to the government of $10 billion, according to officials.

If you or anyone you know would like more information on how to take advantage of this $8,000 gift from the government to purchase a home, please email (jake@jakeconklin.com) or give us a call at 866-7866.