The PRICE is the same as 2003 prices, but the COST is even less. According to the most recent S&P Case Shiller price index, residential real estate values have returned to 2003 PRICEs. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling. In 2003, 30 year mortgage rates stood at 5.88%. Today, they are 4%. How does that impact the actual COST of a home? Well, on a home purchased for $250,000 you save $285.30 a month, that equals over $3400 a year, and over $100,000 over the life of a 30 year mortgage! You buy the home for the same PRICE, but the COST is over $100,000 less. So this is why so many financial advisers are saying that this may be one of the greatest times in history to purchase a home.
The excitement is already building for Century 21 Real Estate LLC’s debut Super Bowl ad and will continue to grow right up until the spot is seen by the millions of fans who tune into the Big Game on February 5. Before the ad premiers during the 3rd quarter of the game, CENTURY 21 will be building anticipation for the big reveal with teasers spots that will be airing during the pre-game show. These teasers give a taste of what’s to come in the :30 Super Bowl spot which will feature Donald Trump, Deion Sanders and Apolo Ohno in three amusing mini-stories a CENTURY 21 Agent bests these well-known icons of smarts, boldness and speed, accentuating the qualities our agents possess and the exceptional service they offer today’s homebuyers and sellers.
How are CENTURY 21 Agents like the biggest tycoon in real estate?
How are CENTURY 21 Agents like Deion “Prime Time” Sanders?
Behind that flash there’s genuine moxie and zeal.
The kind that allows them to wear 18 different hats at one time.
And look good doing it.
See how our Agent stacks up against Deion in the third quarter.
CENTURY 21 Agents- Smarter. Bolder. Faster
How are CENTURY 21 Agents like the fastest skater on ice?
There is a growing belief among many experts that 2012 will be the year housing turns the corner and starts heading in a more positive direction. Whenever I write a post like this, I unleash the hordes of critics who say we are again wearing rose colored glasses or are puppets being controlled by the National Association of Realtors (NAR) and other industry groups.
It is for that reason I will not be covering the projections of those groups. Instead, I want to share the beliefs of other organizations.
Home Sales Stabilize in 2011 as Median Prices Fall
Source: http://www.wra.org/hsrdecember2011/
Date: January 23, 2012
MADISON, WI – The Wisconsin real estate market improved in 2011 with home sales totaling slightly above 2010 levels, according to a year-end report released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes for 2011 were 0.2 percent above 2010, and the median price of homes fell 6.4 percent to $132,000, according to the report. Monthly trends in home sales ran well above 2010 levels throughout the second half of the year.
Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:
In 2011, we experienced one of the most volatile housing markets in American real estate history. Things we never anticipated happened. Events we were sure would take place didn’t. Today, we want to review the five headlines we think had the biggest impact in 2011.
MADISON, WI – For the fourth straight month, Wisconsin’s monthly home sales outpaced last year while median prices continued to fall, according to data released by the WRA. Existing home sales increased 13.5 percent in October compared to October 2010, and median prices fell 7.8 percent over the same period to $129,000. Visit the WRA website to read the full report and find monthly and quarterly housing data for your county.
Short sale success does not stop at educating the seller as to their loss of mitigation options and then successfully negotiating with the seller’s bank to accept a short payoff. Today’s complex real estate market warrants more. Having negotiated many successful short sales, I have found one aspect of the short sale process that needs serious attention: Educating the buyer regarding the proper short sale procedures.
Educating the buyer and setting the correct expectations is imperative to a successful short sale transaction. Nothing is more discouraging than successfully negotiating a short sale only to have the buyers walk from or not be able to close the transaction. The following are some precautionary and educational items to consider which would avoid such buyer fallout.
“The millionaire says to a thousand people, ‘I read this book and it started me on the road to wealth.’ Guess how many go out and get the book? Very few. Isn’t that incredible? Why wouldn’t everyone get the book? A mystery of life.” – Jim Rohn
Mr. Rohn explains that if we want to make the right financial decisions in our lives, we should depend on the same sources the wealthy read. This past month four different iconic financial resources said the same thing:
We believe very strongly that now is the time to buy a home. Some will say we are just saying this to create real estate transactions and commissions. Because of that, today we will quote what those outside the real estate profession are saying to the people who look to them for financial advice.
“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”
In an article two weeks ago, MarketWatch.com (the on-line blog for WSJ) told their readers:
“Now could be the best time in history to buy a home.”
The National Association of Realtors (NAR) released their Existing Sales Report two weeks ago and in the report they discussed a troubling trend: cancelled contracts are increasing dramatically. NAR defined the issue:
“Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price.”
NAR explained that 18% of all contracts were cancelled in August. This compares to 16% last month and 9% in August of 2011.
The percentage of cancelled contracts has doubled in the past year!!
It is extremely important that both buyers and sellers pick the right real estate professional to assist them with their real estate needs.
BUYERS
Make sure your agent can not only help you find the home of your dreams but also find you professional assistance with all aspects of the transaction (mortgaging, title, etc.)
SELLERS
Realize that your agent must sell the home twice:
to a qualified buyer
to the bank (through the appraiser).
The second sale may be more difficult in this market than the first.
Bottom Line
It is imperative in this housing market that both buyers and sellers use a true real estate professional to guarantee that the deal will actually reach the closing table.
Effective October 1, 2011, the costs associated with getting a VA mortgage are going DOWN!
An overview: VA mortgages are bundled, securitized and sold in the secondary market with the backing of the Federal Government. In order to insure these mortgages, the government charges a type of insurance premium, called a VA Funding Fee, which is typically added to the loan amount (thereby financed).
Families are trying to determine whether or not now is the time to buy a home. Some are advising these families to sit out the current real estate market and instead rent for the next year or two. We do not agree with this advice. Homeownership means a lot to a family. We also realize that the financial aspects of purchasing a home today can be a concern. The challenge is any advice given by someone in the real estate community is immediately dismissed as self-serving.
For this reason, we want to give you the advice of three entities not involved in real estate sales: (more…)
Business School professors Eli Beracha of East Carolina University and Ken H. Johnson of Florida International University have done extensive research on which makes more sense financially: to rent or own a home. They published, Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise?In their paper, the professors do not dispute the social benefits of homeownership:
“Home ownership is touted as the “American Dream”. It is credited with enhancing wealth, increasing civic pride, improving self-esteem, crime prevention, child development, and better educational outcomes, among other benefits. This paper does not dispute any of these claims.”
What the professors were proposing is that homeownership is not a better investment strategy than renting. The first of the two major findings was:
There has been much volatility in the 30 year mortgage rate over the last few weeks. According to Freddie Mac, rates have soared almost a half of a percent in just the last four weeks and now are as high as they have been in the last six months.
Frank Nothaft, vice president and chief economist of Freddie Mac, explained:
After Europe made strides in its debt situation, investors left the security of U.S. Treasury debt causing bond yields to rise and mortgage rates along with them. Interest rates for 30-year fixed mortgages are now almost a half percentage point higher than the record low set in mid-November.
No one knows exactly what will happen as we move forward. The only thing we know for sure is that rising rates have a tremendous impact on a buyer’s payment. There are home buyers standing on the sidelines waiting for the prices of real estate to bottom out. If you are one of these buyers, be careful. You should be as concerned about the monthly COST as much as you are concerned about the PRICE.
Below is a table showing the impact rising rates have on the monthly payment – even if prices continue to soften:
Bottom Line
You want the best value possible whenever you purchase anything. When buying real estate, the best value is not determined by price alone. Value is determined by price and financing costs. Take both into consideration when timing your purchase
There are going to be some tough headlines written about the housing market over the next several months. They may create apprehension and in some cases outright fear. The good news is these headlines will not reflect what is actually taking place in real estate. Some in the industry say we should just ignore this media blitz of problematic stories. That would be similar to trying to ignore a growling creature lurking in the shadows in the corner of the room. Instead, we want to shine a bright light into that corner to honestly evaluate how dangerous the creature actually is.
THE FACTS: The National Association of Realtors’ Pending Sales Report is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed.
The pending sales reports covering September, October and November will be UGLY. The reason is that the houses going into contract in those months this year will be compared to the same months last year. In 2009, sales were skyrocketing as we headed toward the original termination of the Homebuyers’ Tax Credit on November 30. It will appear as though this year’s sales fell off a cliff in comparison. The headlines will be brutal.
Neil came out to our home and went through a complete run down of everything he does to sell a home. We walked through the home and he gave us ... more
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Neil is a rare combination ... integrity, likeability, professionalism. He really cares about his clients; he isn't in it just to make a buck. He ... more
Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:
In 2011, we experienced one of the most volatile housing markets in American real estate history. Things we never anticipated happened. Events we were sure would take place didn’t. Today, we want to review the five headlines we think had the biggest impact in 2011.
Short sale success does not stop at educating the seller as to their loss of mitigation options and then successfully negotiating with the seller’s bank to accept a short payoff. Today’s complex real estate market warrants more. Having negotiated many successful short sales, I have found one aspect of the short sale process that needs serious attention: Educating the buyer regarding the proper short sale procedures.
Families are trying to determine whether or not now is the time to buy a home. Some are advising these families to sit out the current real estate market and instead rent for the next year or two. We do not agree with this advice. Homeownership means a lot to a family. We also realize that the financial aspects of purchasing a home today can be a concern. The challenge is any advice given by someone in the real estate community is immediately dismissed as self-serving.
Business School professors Eli Beracha of East Carolina University and Ken H. Johnson of Florida International University have done extensive research on which makes more sense financially: to rent or own a home. They published, Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise?In their paper, the professors do not dispute the social benefits of homeownership:
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