Milwaukee Metro Existing Home Sales Slip in August

Milwaukee Journal Sentinel (09/11/14) Gores, Paul

A report by the Greater Milwaukee Association of REALTORS? (GMAR) found that sales of existing homes in the Milwaukee metropolitan area fell 2.2 percent in August, continuing a slower year for the local housing market. The report shows 1,821 homes were sold last month, down from 1,862 in August of 2013. GMAR President Mike Ruzicka said residential real estate professionals are not alarmed by the trend of lower sales because other market characteristics are improving. Ruzicka pointed to a lower number of foreclosures and distressed properties and a higher percentage of traditional buyers. Court records show that foreclosure filings in southeastern Wisconsin are down 22.5 percent this year than in the first eight months of 2013.

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FHA Borrowing Just Got Better

National Association of Realtors
FEATURED STORY

FHA Borrowing Just Got Better

Real estate consumers scored a big win this month when the Federal Housing Administration announced it would eliminate prepayment penalties for borrowers. Learn why NAR fought for the change. That, plus important guidance on copyright law and more on “The Voice for Real Estate.”

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About That FHA Prepayment Penalty . . .Posted in Breaking News, Economics, Law & Policy, Politics & Government, by Robert Freedman on September 11, 2014

News that FHA will eliminate a prepayment penalty starting next year has been widely reported. It?s a move NAR has been seeking for some time because it will relieve borrowers of a financial hit that?s entirely out of their control and also bring the agency?s policies in line with other federal agencies that backstop mortgages. Perhaps most importantly, it will align the agency?s policies with the qualified mortgage rule (QRM), which defines what the federal government considers a safe home mortgage loan.

What?s being eliminated is an interest-rate charge. For FHA borrowers that pay off their mortgage before the end of the month, the lender is allowed to charge to the borrower the interest rate costs on the loan from the day the loan is retired until the last day of the month. So, if a borrower paid off the loan on Sept. 10, the penalty would be 20 days of interest payments. That can be hundreds of dollars. Once the change takes effect, on Jan. 21, 2015, lenders will no longer be able to apply that interest charge to the borrower.

NAR continues to work with FHA on other matters. A big point right now is getting some improvement in FHA?s policies on condominium financing. It?s too difficult for many condo projects to get the stamp of approval that?s needed for people who want to buy a unit in the project to get FHA financing.

In any case, you can learn more about what NAR is doing on FHA and in other legislative, regulatory, and legal areas in the latest video in The Voice for Real Estate news series.

Debt Cancellation, FHA Prepayment – VIDEO

Greater Milwaukee Association of Realtors – June, 2014 Housing Report

Sales are still down in the Milwaukee Surrounding 4 counties, according to the report, although Milwaukee County showed an increase compared to June, 2013. Optimistic Sellers saw increased listings in June compared to June 2013. The report attributes this to a lack of inventory for buyers to choose from, but I would attribute it to lack of viable buyers due to more stringent Lending rules and the slow economic recovery. Foreclosures still seem to be selling, but the higher priced housing seems sluggish except for the cream puff listings. Time will tell if the increase of listings actually sell, or linger on the market. Overall, I have seen increases in sales prices, and shorter listing times, again depending on the condition of the homes. Bottom line, I see homes are starting to move, but Buyers have the option to be picky, due to the inventory levels.

Read the report:
GMAR June 2014 Housing Report

May, 2014 WRA Real Estate Market Report

May Existing Home Sales Decline Even as Median Prices Rise

The WRA is happy to provide you with a monthly home sales report and in-depth market data. For an overview of the report, see below. For a more detailed look, view the full version at the link below. If you have questions or need additional information, please let us know.

Sincerely,
Steve Lane, WRA Chairman of the Board, and Michael Theo, WRA President and CEO

Press Release

MADISON, Wis. – Existing home sales continued to lag behind 2013 levels but median prices rose by a solid margin in Wisconsin. May home sales dropped 6.9 percent compared to the May 2013 volume of sales. In contrast, median prices increased over the same period, rising 3.8 percent to $150,000.

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Click Here to View The 2014 May Home Sales Report

6 Ways to Turn Off Any Buyer or Seller

Trulia Pro BlogFor Real Estate Professionals
FEATURED
buyer-turnoffs
Tara-Nicholle Nelson
February 6th, 2014

In the wild world of dating, when you encounter a ?turn-off,? you can just pack it in and not to go on another date with that guy or gal again. But turn-offs can be much more detrimental when they come up in the realm of your real estate.

Often times, your clients may inadvertently make big mistakes that can cost them big when it comes to securing their dream home or their dream offer. Indeed, turn a buyer off, and your seller?s may risk low offers or?worse?a home that just won?t sell. The same goes for buyers. In today?s market, multiple offers are common. And even in cases when your client is the only buyer on the scene, having a cooperative seller goes a long way toward everything from getting access to the place for inspections to getting a price reduction when the appraisal comes in low. Thus, the potential exists for buyers to turn sellers off, and risk having their dream home slip right through their fingers.

As your clients proceed toward their quest for a drama-free home journey, it?s your job to stop them from making these far-too-common mistakes and help them snag the best buyers and sellers to help their real estate dreams become a reality.

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6 Horrible House Hunting Pitfalls to Help Buyers Avoid house-hunting

Trulia Staff
June 5th, 2014

Sometimes it?s not the market or their agent (we know, we know) that stops buyers from snagging their dream home. And despite their good intentions, sometimes buyers unknowingly self-sabotage their home search. Which got us thinking: As agents, what can we tell buyers from the get-go that can help them avoid some of the worst house hunting pitfalls?

We reached out to Arron Sweeney, founder of Your Berkeley and realtor at King Realty Group in San Francisco, as well as Lance King, broker and owner of King Realty Group. They shared six home buying hang-ups and what agents can say to clients to help them avoid these common missteps.

Love these tips? Get the printable handout to share with current and prospective clients!

1. Missing out on the perfect place.
Hundreds of new homes hit the market every day, and buyers who are not using all of the house hunting tools available, could let their dream home could slip by unnoticed ?or worse, someone else might snatch it up before they even know that it?s for sale. One of the toughest lessons for a first-time (and, yes, even a second-time) buyer is that in this market, passive house hunting simply will not cut it. No matter what we agents do?and no matter how many e-mails we send showcasing a just listed property that agents would love to show our clients?if the buyer doesn?t make house hunting a top priority, it?s going to be a painful process.

What Agents Can Do:
As soon as you secure your newest buyer clients, set up a time to discuss your house hunting strategy. Ask them what their preferred method of contact is when there is a home that just can?t wait to be seen. Leverage smart free tools like Trulia?s Nearby Home Alerts come in handy. Buyers get an instant notification on their mobile device when new listings near their current location come on the market. Setting up such a strategy will let buyers stress less and think more about window treatments than missing their window of opportunity.

2. Choosing the wrong lender.
Few things are more frustrating (for buyers and agents alike!) than finding the perfect property only to find out that the loan isn?t coming through.

What Agents Can Do:
?We always tell our clients to use our preferred lenders because they?ll get great rates, the VIP treatment, and if there?s a problem they?ll find out on the front end,? says Sweeney. Remind clients that preferred lenders earn their preferred status only after they?ve consistently delivered loan closings. Provide them with a list of preferred lenders, and provide clients with educational materials to help them get their loan situation in order before they hit on their must-have property.

3. Fixating on price per square foot.
Buyers who search by price per square foot may be prime for some major disappointment.

What Agents Can Do:
King suggests reiterating to clients that if they are using this as one of their search criteria, they might want to think again. Measurements, as agents know, are not guaranteed to be accurate, and mis-measurements can place appropriately priced homes outside of a client?s search parameters.

4. Desperation.
When prices are on the rise, buyers get antsy and sellers get greedy. ?Many buyers have been outbid on numerous properties and have just become tired of looking,? says Sweeney. ?As a result, they are placing ridiculously high offers on properties that just aren?t worth it?just to get into a home this minute.?

What Agents Can Do:
Tell buyers to avoid the temptation and work with them to build up a backup plan. Suggest neighborhood or areas that may actually have the right home at the right price that the buyer potentially crossed-off the list due to superficial reasons. Make it a gentle conversation. ?Why don?t we just spend an afternoon looking at a few properties to see what?s out there? You don?t have to commit to changing your home search, and you?re not tied into anything. This is just a little bit of an exploration.? And, if all else fails, recommend short-term or corporate rentals options, so they?ll have a soft place to land while they wait for their dream home to appear on the market. When that happens, you?ll be the agent they come running back to.

5. Foregoing inspections.
In a perfect world, sellers would disclose every single issue to the prospective buyers. Since that?s not the case, inspections are a great idea; yet one that Sweeney sees clients skipping too often.

What Agents Can Do:
?I have a strong knowledge of construction and always advise my clients to pony up and have both an independent pest and contractor inspection,? says Sweeney. Inspections identify red flags and can address the general state of a property. Plus, they can provide leverage when it comes time to negotiate. Discuss these issues in details with your clients, and remind them of how much neglecting inspections may cost them in the long run.

6. Buying a ?project.?
The unwritten rule of renovating states that it will take more time and money than expected. So it?s important for buyers to know their threshold for renovations before buying a fixer-upper.
What Agents Can Do:
Be prepared to share referrals to general contractors and specialty tradesmen. It doesn?t hurt to schedule a showing with one of these pros in tow either. It?s better for clients to know what they?re getting into before they find themselves in over their head. Plus, a happy new homeowner is the source of a great recommendation and referral clients for years to come.

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Setting the Record Straight: Top Home Buying Myths

The Real Estate Book
Original Post by Courtney Soinski

Whether you?re a real estate professional or first-time home buyer, the home buying process and real estate transactions can be stressful. There tends to be some common misconceptions in this process, so it?s very important that you?re well informed of what is fact and what is fiction. We?re here to set the record straight.

Whether you?re a real estate professional or first-time home buyer, the home buying process and real estate transactions can be stressful. There tends to be some common misconceptions in this process, so it?s very important that you?re well informed of what is fact and what is fiction. We?re here to set the record straight.

Myth #1: You don?t need a REALTOR?.
Before you bravely take on one of the biggest purchases or sales of your life, remember this: it?s not as easy as it looks. REALTORS? know all the ins and outs of the local area as well as the market in which you?re looking to buy or sell. Picking up the phone and calling a REALTOR? may be one of the best decisions you?ll make.

Myth #2: The bigger the downpayment, the better off you?ll be.
Buyers? immediate reflex is to put as much cash down as they can when buying a new home because they?ll borrow less, lower the monthly mortgage payments, and won?t need to buy mortgage insurance. However, putting 20% down is not a requirement and it?s not for everyone.
Thanks to Federal Housing Administration Loans (FHA Loans), you can put as little as 3.5% down. With this method, you?ll potentially have a lower interest rate, giving you more flexibility. Your money is not all tied up in your house like in a traditional down payment that can leave you with little or no extra cash to spend on home care, improvements, or any other unforeseen circumstances.

Myth #3: Appraisers set the value of a home.
The role of the appraiser is to produce a credible opinion of value that reflects the current market. Appraisers are not responsible for setting the value of the home and they also do not confirm a home?s sale price. According to David S. Bunton, President of The Appraisal Foundation, ?Appraisers provide an analysis of the collateral, so that lenders understand the value of a property when making the loan decision.?

Myth #4: You need perfect credit.
Most people assume that you must have absolutely golden credit in order to get a loan, but that just simply isn?t the case. If buyers have less than perfect credit, lenders are often willing to work with them to get the best possible loan.
Credit is not the only thing that lenders look at when deciding to approve a loan, but your score will have an effect on the interest rate on your mortgage. Make sure you review your credit report and if any errors are found, they should be reported to the credit reporting bureaus before applying for a mortgage.

Looking to buy? Best cities for first-time home buyers

Reality Check
Edited by Diana Olic | @diana_olick

In the rush to get in on the bargains of the housing crash, first-time home buyers were largely left out. Investors swarmed the most distressed markets, spreading their cash like fertilizer and pushing home prices up far faster than most expected. In less distressed markets, first-time buyers were still hampered, as the pendulum swung hard from loose lending to too-tight credit.

Now, as the spring season brings more listings to the national market and as investors seem to be pulling back a bit, first-time buyers are testing the water again. Some markets, like San Francisco, will likely be cost-prohibitive, while others, like Philadelphia, could offer easier entry to home ownership.

“First-time home buyers were put at a disadvantage against all-cash buyers, but with interest rates still staying low, with the marketplaces having risen fairly decently, you’re seeing the opportunity where it’s less of an investment for investors but a good opportunity for first-time home buyers,” said Steve Berkowitz, CEO of Move Inc. operator of Realtor.com.

Houses are about to get really, really smart

Realtor.com ranked the top 10 markets for first-time buyers, using five factors to judge the best: market popularity, prices, inventory, time on market and employment. Pittsburgh, Tampa, Fla., and Philadelphia, ranked highest, mostly because their prices have not spiked much and their unemployment rates are lower than the national average.

Interestingly, Phoenix also made the top 10. Phoenix was one of the hardest hit housing markets during the crash, with prices literally falling by more than half from peak to trough. Investors targeted the market early, buying thousands of distressed properties at deep discounts and driving prices up by double-digits very quickly. Still, Berkowitz said it’s a great place for first-time buyers now.

How we will live: More green, more urban, more efficient

“Investors are looking for a certain level of return,” he said, and they’re not getting it in Phoenix anymore. Large-scale investors have moved on to other markets, like Atlanta and Chicago, where discounts are better.

Click to View Video “Hey First Time Buyers, Here are the Best Housing Markets”

Realtor.com released a list of the top markets for the first time home buyer. CNBC’s Diana Olick reports this is a crucial segment of the industry.

Click to View the Video “Where First Time Homebuyers Are” Video

Top 10 Markets for First-Time Home Buyers by Rank
Realtor.com

realtor com best places to live 2014

Getting a mortgage is easier, but only just

New programs open options for borrowers

Housingwire.com article

greenhouse

Mortgage credit continued to trend higher in February, following a steady increase in availability since November 2013, the latest report from the Mortgage Bankers Association revealed.

The mortgage credit availability index edged higher 0.44% to 113.5 in February from 113 in January.

If the MCAI had been tracked in 2007, it would have sat around 800. The index was benchmarked to 100 in March 2012.

“For the third month in a row, mortgage lenders and investors slightly expanded credit offerings in February on net, as a result of offsetting factors,? said Mike Fratantoni, MBA?s chief economist.

“Specifically, the recently implemented QM/ATR sections of the new Consumer Financial Protection Bureau regulations stipulate that ARM loans must qualify at the highest allowable rate for the first five years of the loan,? he continued.

Because of this, many investors have discontinued loans whose interest rate adjusts after only 3 year (also known as 3/1 ARMS).

But despite the pull back in the 3/1 programs, lenders and investors added several new 5+ year ARM programs, including those for Jumbo loans, to their repertoire resulting in a net increase to the MCAI, Fratantoni explained.

Brena Swanson
Brena Swanson joined the HousingWire news team in February 2013.
Prior to serving HW in the role as Reporter and Content Specialist,
Brena attended Evangel University in Springfield, MO.

Mortgages, Housing Starts & New Household Creations in 2014 ? What You Need to Know.

The Real Estate Book Blog
housingmarket-300x255
Over the past year, there has been a revival of single-family home production. What does this mean for 2014? Housing will continue its climb toward higher ground this year, but builders are still confronting several challenges, according to economists speaking at the National Association of Home Builders (NAHB) International Builders? Show (IBS).
NAHB Chief Economist David Crowe explains that consumer confidence has returned to pre-recession levels and household balance sheets are on the mend. Year-over-year household formations are on the rise and now averaging 620,000 compared to just 500,000 during the housing downturn.
At the height of the housing boom, the U.S. was producing 1.4 million additional households each year. Meanwhile, new-home sales are averaging just 8.7 percent of total home sales?barely half the historical average of 16.1 percent. However, builders still face several headwinds, including rising building material prices, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and limited availability in labor and developed lots.

NAHB forecast for 2014:
? 1.15 million total housing starts in 2014, up 24.5 percent from 2013?s 928,000 units.
? Single-family production projected to rise 32 percent to 822,000 units and surge an additional 41 percent to 1.16 million units in 2015.
? 333,000 multifamily starts, up 9 percent from 306,000 in 2013.
? Single-family home sales are projected to hit 584,000 this year, a 35.9 percent increase above last year?s 430,000 sales.
? Residential remodeling activity is expected to register a modest gain this year over 2013.
? A slow and steady housing recovery will bring nationwide housing starts to 71 percent of normal by fourth quarter 2014 and 93 percent of normal by the end of 2015, says Crowe.
? On a state level, the top 20 percent of states will be back to normal production levels by the end of 2015, compared to the bottom 20 percent, which will still be below 84 percent.

Mortgage rates up, but housing still affordable
As the economy strengthens and the Federal Reserve tapers its buy-back of mortgage-backed securities, there will be upward pressure on mortgage rates, but not enough to harm housing affordability, according to Frank Nothaft, vice president and chief economist at Freddie Mac.
Nationally, Nothaft expects that home sales and prices will each rise about 5 percent in 2014, and that housing starts will post a 20 percent gain.
?As we move into the 2014 home buying season, it will be a market dominated by home buying originations rather than refinance originations,? says Nothaft. ?This will be the first time since 2000 that purchase originations will dominate the market.?
He says the reason for the change is because so many households looking to refinance have already done so, and as mortgage rates gradually rise, fewer homeowners will look to refinance. Further, purchase originations are expected to increase as the overall housing market strengthens.

Pent-up demand will fuel growth
In the aftermath of the Great Recession, there is a significant pent-up demand to form households and even to build homes.
At least 3 million fewer households formed over the past five years than would normally have been expected. During this period, many college graduates were forced to double-up or move in with their parents. Stronger job growth and a strengthening economy in 2014 should lead to a rise in household formations, which will be important to supplement housing demand.
?I think this will be a pretty good year for home construction,? says Real Estate Expert and Economist David Berson. ?There will be a big increase in single-family construction, but not as much for multifamily.?
For more information, visit www.nahb.org.

The Real Estate Book Original Post

New Survey Reveals Pulse of 2014 Spring Real Estate Market

RISMedia Post
spring_real_estate
A recently released survey indicates a lively Spring season ahead for real estate sales. MRIS, a Mid-Atlantic Multiple Listing Service (MLS), recently released the results from its 2014 Spring Real Estate Outlook Survey.

The survey drew responses from over 1,300 real estate professionals within MRIS’s geographic footprint, including Washington D.C., Baltimore, Northern Virginia, and parts of West Virginia and Pennsylvania, focusing on their predictions for the Spring market.

Over 71 percent of MRIS real estate professionals are more optimistic about the upcoming real estate season compared to last year and predicted transactions would increase this year from 2013. Additionally, 82 percent of respondents think the average home sales price will increase in this year’s Spring market.

The survey also looked at the homebuyer and seller challenges, inventory and new mortgage rules.

Homebuyers and Sellers
Forty-five percent of MRIS real estate professionals predict that 2014 will continue to be a seller’s market, while 33 percent indicated a buyer’s market for this year and 22 percent are unsure.

“The DC Metro market has been, without question, a seller’s market and will most likely remain so,” Strauch added. “In 2013, we saw two months of supply on average, meaning it would take two months for all homes on the market to sell and we expect to see that continue. The Baltimore Metro area is more balanced, but still favors the seller to some degree with its 4.9 months of supply.

According to the survey, other challenges that buyers and sellers will face this Spring season include:

  • Approximately 53 percent of respondents think that an insufficient supply of homes on the market is one of the biggest challenges that buyers face right now.
  • Fifty percent of those surveyed feel buyers were concerned with competition from other buyers; and 48 percent noted low affordability.
  • Over half of the respondents believe that the biggest challenge that sellers are facing right now is pricing their home properly.

Inventory
Thirty-seven percent of respondents believe that inventory will increase compared to last year and just slightly less (32 percent) indicated inventory will be about the same as last year. Only 22 percent of real estate professionals predict that inventory will meet the demand they expect for 2014.

“Demand is highest for the more affordable price points, which leads to higher competition among condos and townhomes in our region,” says Strauch. “Baltimore and DC Metro’s low supply of attached homes gives seller’s the advantage in our market. Detached homes have a more balanced market and, in some areas, possibly even lean towards the favor of the buyer due to less competition.”

  • Fifty-eight percent responded that the biggest shortage of supply would be homes priced below $300,000; and 29 percent says the largest shortage would be homes in the $300,000-500,000 price range.
  • Approximately 48 percent of real estate professionals predict that attached houses in Spring 2014 will remain the same level of sales seen during 2013.
  • Approximately 21 percent reported that attached houses would rise in popularity over single-family detached homes this year.

New Ability to Repay and Qualified Mortgage Rules
In early January new mortgage rules issued by the Consumer Financial Protection Bureau went into effect, designed to lower the risk of defaults and foreclosures among borrowers. As a part of the rules, lenders must determine that a borrower has the income and assets to afford to make payments during the life of the loan.

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