Real Estate: There is Good With the Bad

When it comes to real estate there is good news with the bad news. Reports came out this week that showed a significant drop in real estate sales volume. The increase in sales volume due to home buyer tax credits was bound to be followed by a drop, as most surges are. The tax credit was in full swing during the summer of 2009 and packed a bigger punch when it was extended and expanded to include existing home owners along with new home buyers.

The last extension of the home buyer tax credit expired at the end of June, with some leeway for those who were already under contract but unable to close yet. There is no more tax credit revving up real estate sales, therefore it can be no huge surprise that the month following its expiration took a dip. The recession has brought about a climate of caution, aided by the nation’s employment picture.

The good news when it comes to real estate is that, on average, home values have increased, if ever so slightly. While sales may have been down in July, prices appear to be stabilizing. The dropping mortgage rates and increased inventory make it an ideal time to look at buying a home, for those who can qualify for a mortgage.

In a nutshell, real estate sales figures may not appear great but prices appear to be stabilizing. Once a prettier picture is painted as far as employment goes then we will be on a more stable road to recovery.

State of real estate

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Overall A Positive Outlook on Real Estate

While the economic recovery shows ups and downs, the overall picture of the housing market shows more positive data than negative. Looking at real estate data from the second quarter it is evident that home prices are stabilizing in more areas than not and home sales volume is up. The second quarter was stimulated largely by the home buyer tax credit that was expiring and the historically low mortgage rates that continued to drop.
Home sales rose just over 9% in the second quarter of 2010, over a 15% increase in volume from the second quarter of 2009. The affordability factor is playing a large role in the purchasing of real estate, with homes considerably more affordable than they were at the peak of the market.

Home values have stabilized in roughly 2/3 of the country, where they remain flat or are rising slightly. The hardest hit areas displayed a bit of a drop in home values but the rate of decrease has slowed down. Home values appear more stable as fewer distressed properties hit the market, but it will take time for home prices to truly increase. The analysis of housing data displays that it is still a buyers market when it comes to real estate.

Real estate progress in the second quarter of 2010

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Mortgage Rates Drop Once Again

Mortgage rates have once again hit record lows in an effort to spur real estate sales nationwide. Poor reports on job creation and high unemployment figures are spurring the lowering of rates, meant to improve the housing sector of our economy.

The current average rate for a 30 year fixed rate mortgage is 4.44%, a year ago it was 5.29%. A 15 year fixed rate mortgage is averaging 3.92%, down from 4.68% a year ago. A five year adjustable rate mortgage is averaging 3.56%, down from 4.56% a year ago.

Low mortgage rates appear to be doing the job of increasing home sales. While real estate sales are in no way booming, they are improving. The National Association of Realtors (NAR) tracks 155 metro areas across the country and has seen improvements in real estate sales in more than 60% of these areas.

The historically low rates are creating an ideal borrowing climate for those who have a steady source of income, the money for a down payment and good credit. It is a prime buyers market when it comes to real estate. The low home values and low mortgage rates combine to make it more affordable to buy a new home than it has been in years.

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You may also visit my wesbite: http://www.caroledelacruzrealty.com/

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Some Home Improvements Offer More Return Than Others

There are many improvements that a person can make to a home, many offering more of a return than others. There are some home improvements that can actually hurt a home’s investment potential. Some improvements limit the number of future potential home buyers due to the uniqueness of the improvement, for example not everyone wants a home spa, sauna, full workout room, etc. In essence it is important to make sure that home improvements and additions be well-planned and then well-executed.
Historically, the best improvements are kitchens, bathrooms, and decks. These renovations and/or additions offer the best return for the dollars spent, being that they are completed reasonably and not over-the-top. The simpler the project, the better.

Most people want to get their money back when they sell a home, but many will not. One key element to remember is to keep your home in line with the neighborhood. If every home on your block is similar and you add a huge garage, fancy finishes and ornate touches that do not exist in your neighborhood you probably won’t get your money back. Of course, if you don’t care about the return that you will get on your home then you can feel free to throw caution to the wind.

Potential remodel pitfalls

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Financing May Be Tougher But It’s Not Impossible

Financing for real estate may be tougher these days, but it is not impossible. When it comes to buying a new home it is more important than ever to be prepared when qualifying for a new loan. Times have changed. The days of securing no-do c loans or loans with no money down are in the past. To get a loan today it is commonplace to put a minimum of 20% down. If you have the down payment money for a loan on a new home, that is the first step.

Qualifying for a mortgage involves stating a steady source of income, a good credit history, and a reasonable amount of debt. Similarly what will work against you is poor credit, unemployment, no down payment funds and lying on a loan application. In addition if you are self-employed you should expect to jump through some pretty big hoops.

If you want to buy a home do not despair. If buying a home is in your budget you will be able to work it out. If its not in your budget at the moment it is probably best that you wait until it is.

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You may also visit my wesbite: http://www.caroledelacruzrealty.com/

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Tax Credit May Be Gone But Assistance is Still Out There

The home buyer tax credit may be gone but assistance is still out there. Potential first time home buyers have options to explore when considering jumping into real estate. One of the first hurdles when buying a home for the first time is often coming up with a down payment. Even a good saver may have a hard time saving the thousands that can be necessary for a down payment. Luckily there are options for help.

The Department of Housing and Urban Development (HUD) has many assistance and reference programs. HUD’s website has links to Habitat for Humanity, rural housing, and a number of home buyer programs in your area. The HUD website can be a great resource, offering a wealth of information on what is involved in purchasing a home.

The Federal Housing Agency (FHA) is another agency offering information and assistance. The FHA helps buyers buy homes with both low interest rates and a small down payment. Where a standard down payment can be anywhere from 10 to 20%, an FHA loan can require as little as 3.5% down. Standard loan fees can be wrapped into the loan through FHA as well.

If home ownership seems like a pipe dream, it doesn’t have to. If you have a steady source of income then you have mastered one of your biggest hurdles. Contact a real estate professional today to learn more about purchasing real estate in your area.

 HUD website

 FHA

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Selling Your Home? Think Like A Buyer

If you are trying to sell your home, consider thinking like a home buyer. Walk around your home, what features do you like? What parts of your home need work? From the color of the paint on your walls to how clean your carpet appears, the details are important and the details are what will either attract or repel potential home buyers.

When it comes to paint choose a neutral color. This doesn’t mean a home has to be painted white but a living room certainly shouldn’t be painted hot pink or orange. Taste is subjective and leaving color basic is always best.

The flip side of improving your home for sale is that a recent psychological study shows that new features like new carpet, fresh paint, new cabinets, and the like signal a Band-Aid approach when listed in ads. By all means spruce up your home but point out the great features of your home without using words like “new”, “newly” and the like. Apparently some home buyers see these words as bandages covering a deeper wound. Attention to detail will help sell your home in a more timely manner.

The psychology of real estate

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Selling Your Home? Remember the Basics

If you are selling your home it is important to remember the basics. Selling real estate is tougher in a market that has a high inventory and you home needs to have a competitive edge to grab a potential home buyer’s eye.

One of the most important first steps in readying your home for sale is to remove yourself, both literally and figuratively. Take yourself out of the equation and look at y our home from a stranger’s perspective. Looking at your home with fresh eyes can help point out what needs to be repaired, cleaned, changed, or improved. This is also when you take out your personal effects. Family photos, family knick knacks and children’s art work can all personalize a space and make it hard for a potential buyer to see himself living in your home. De-cluttering, organizing and maximizing the use of your home’s space will show -off its full potential.

Take a good, hard look at your home from the inside out. As the say, you will never have a second chance to make a first impression, and grabbing a buyer’s attention the first time is an important first step to sealing a deal.

For more information please contact me at 818.269.5550.

You may also visit my wesbite: http://www.caroledelacruzrealty.com/

or email me at: carole@caroledelacruzrealty.com