How To Find Good Deals As The Buyers Market Comes To An End

At some point in their lives, every home buyer in America has wondered "Is now the best time to buy a home?" In this 3-minute video, NBC's The Today Show does a good job of answering the question.

The conclusion? Yes, but not if you're going to overpay.

The Buyers Market is ending, we learn, as home prices rise across most of the country.  Pockets of opportunity remain, however, and the focused home buyer can still find a "good deal".

Some of the video's tips include:

• On what types of homes can you get the best prices
  
• What you can learn from looking in a seller's closet
  
• How to identify a desperate seller

The piece also goes negative on short sales, noting the amount of time required to buy one.  Short sales typically do take longer to close versus a "traditional" purchase, but that doesn't mean they should be avoided. 

There's plenty of bargains in the short sale arena, too.

What The Media Missed In September's New Home Sales Report

Some days, newspaper headlines are a terrible place to get your real estate news. 

Today is one of those days.

After the September New Home Sales report showed sales volume down from August, the mainstream media jumped on the story:

• New Home Sales fall a surprising 3.6%
  
• Surprise Drop In New Home Sales
  
• Stocks slide as New Home Sales fall

But the headlines miss the point, somewhat.  Yes, home sales volume is important to housing, but it's not as important as home supply.

A deeper look at the New Home Sales data reveals an interesting comparison point:

• New home sales volume fell 3.6%
  
• The number of new homes available for sale fell 3.8%

In other words, sales outpaced supply -- a running theme this year and a positive signal for housing.

Since peaking in January 2009, the supply of newly-built homes has now dropped by 40 percent.  The average sale price is up 15% over the same period.

This is why you can't get your real estate news from the headlines.  You have to dig a little bit deeper to get the real story.

September's New Home Sales report was plenty strong.  The housing market recovery continues.

Home Values In 95% Of Case-Shiller Markets Are Improving Year-To-Year

For August, the Case-Shiller Index showed annual home values improving across 19 of 20 U.S. markets. It's the first time in 3-plus years that the benchmark housing index has shown such strength.

According to a Case-Shiller Index spokesperson, "The rate of annual decline in home price values continues to improve."

It's yet another sign that housing may have already bottomed.

However, just because the Case-Shiller Index shows a stabilization in home values, that doesn't necessarily make it true. This is because real estate happens on the local level and the Case-Shiller Index is more "national". It tracks data in just 20 U.S. cities.

Homeowners everywhere else are unaccounted for.

Furthermore, even within the 20 tracked Case-Shiller markets, there's no allowance for the natural sub-markets that exist. Some neighborhoods under-perform and some neighborhoods out-perform.

Case-Shiller treats them all the same.

Despite its imperfections, though, the Case-Shiller Index remains a helpful, broader measurement of U.S. real estate. Economists believe that housing led the U.S. into the recession and they believe housing will lead us out, too.

If that's true, August's Case-Shiller data is another step in the right direction.

Falling Home Supplies Mean More Multiple-Offer Situations For Buyers

The national housing supply fell to a 2-year low last month, according to the National Association of Realtors®.

At the current sales pace, existing home inventories would sell out in 7.8 months -- 30 percent faster versus November 2008.

For a 10-month window, that's a major housing supply reduction and it helps to explain why multiple-offer situations have been so common lately.

Moreover, the same report from NAR showed sales activity reaching its highest point since July 2007, too.

If you're looking for evidence that the long-standing Buyers Market is ending, this month's Existing Home Sales report might be it.

Even median sales prices -- typically dragged lower by distressed and foreclosed properties -- declined at its slowest pace in a year.  The market may have turned a corner.

Home prices are rooted in the basic economics of supply and demand.

• When supply outweighs demand, home prices fall
  
• When supply lags demand, home price rise

Since March 2009, the market has been moving in the right direction.  Low mortgage rates, ample housing supply and a first-time home buyer tax credit fueled buy-side demand so that home prices are now rising in many U.S. markets.

If home supplies stay on this path into 2010, expect home prices to rise even more.

Powermat : The Wireless Battery Charger For Cell Phones

Tired of "wire clutter" where your mobile phones, MP3 players and gaming devices compete for outlet space?

The Powermat may be your solution.

The Powermat is a 12-inch long wireless battery charger that's conspicuously missing  "plugs".  Instead, it uses magnetic induction to safely recharge up to 3 devices at once.

Just place your phone(s) on the pad and they charge automatically.

The Powermat debuted at the 2009 Consumer Electronic Show and was reviewed in video.  The reviewers had many positive comments on the Powermat, but highlighted some negatives aspects, too. Give a look and see what you think.

Powermat retails for $99 on Amazon.com and is usually shipped for free.

Government : Home Values Edged Lower In August

According to the government, home values edged lower last month.

The Federal Housing Finance Agency's Home Price Index report shows values down by 0.3 percent from the month prior -- the index's first down month since April.

The Home Price Index is based on the value of homes financed via Fannie Mae or Freddie Mac and, in this sense, the FHFA Home Price Index is more of a "national" real estate index that its private-sector cousin, the Case-Shiller Index.

But like the Case-Shiller, the HPI is as notable for what it specifically excludes as for what it includes. Most notably, the Home Price Index doesn't account for homes meeting any of the following descriptions:

1. Is considered new construction
   
2. Is a multi-unit property
   
3. Is financed by an entity other than Fannie Mae or Freddie Mac

Given the resurgence of FHA financing this year, this last exclusion is especially glaring.  FHA represents about one-third of all mortgage loans in 2009.

Because of these exceptions, some analysts label the Home Price Index incomplete.  The same could be said of every method of home valuation, however. Case-Shiller only collects data from 20 markets, for example.

In light of these shortcomings, therefore, what's most important to today's home buyers and sellers is to know that each of the "popular" home valuation reports show similar patterns -- home prices have leveled and may be starting to recover in earnest.

For a region-by-region breakdown of the Home Price Index, visit the FHFA website.

As Gas Prices Rise, Home Affordability Wanes

With crude oil at its highest levels since October 2008, retail gas is up 8 cents per gallon this week.

It's bad news for home buyers and mortgage rate shoppers.  The same force that's driving oil higher is linked to rising mortgage rates.

We're talking about the weakening U.S. Dollar which is now at its worst levels versus the Euro in 15 months.

Crude oil is priced in U.S. dollars, by the barrel.  When the dollar loses value, more of them are needed to buy the same barrel of oil.  As a result, predictably, the price of crude oil goes up.

Now, there are other reasons why crude oil is rising, but the fading U.S. dollar is one of the major ones and it's why we're addressing it.

The dollar has a similar impact on mortgage rates.

Mortgage rates are based on the price of mortgage bonds that -- like crude oil -- are also denominated in dollars. As the dollar loses value, so do mortgage bonds.  This causes demand for bonds to drop and prices on bonds to fall.

Because bond prices and bond rates move in opposite directions, mortgage rates rise and thisis precisely what's happening on Wall Street today.

Since touching a 5-month low in early-October, mortgage rates have tacked on as much as 1/2 percent, depending on the product.  Moreover, with the dollar showing no signs of a rebound, the upward pressure on rates should continue.

If you're trying to time the market bottom, you may have already missed it. Consider locking your mortgage rate before rates increase even more.

And your everyday signal that rates are rising? Just check your price at the pump. If gas prices are up, it's likely that mortgage rates are, too.

Housing Starts Post 8th Gain in 9 Months

Housing Starts on single-family homes gained last month, marking the 8th time that's happened this year.

A "Housing Start" is a home for which the foundation has been excavated and, considered alongside other key market metrics, September data suggests that the housing market has stabilization is complete.

Momentum in housing is overwhelmingly positive:

• Homes under contract are soaring
  
• National home supplies are way down
  
• Home values are up in a lot of markets

Despite the positive news, the press is calling September's Housing Starts data a "bummer". Citing a drop in monthly building permits, the media purports that housing will slow in the months ahead. 

The conclusion may be right, but the rationale is may be wrong. 

The probable cause for fewer permits isn't that the housing market is overdone.  It's that home builders are choosing to exercise caution given the pending expiration of the First-Time Home Buyer Tax Credit and a still-growing number of foreclosed homes. 

It's unclear what housing demand will be beginning in December and the last present a builder wants for the holidays is an excess of inventory.

It makes sense that building permits are down, in other words.

Looking back at February of this year, there's a host of signs that housing is on the path to recovery.  Now, that path won't be a straight line and there's bound to be setbacks, but September's Housing Starts is not one of them.

Housing Starts are up 40 percent on the year.

Previewing The New Good Faith Estimate

The new Good Faith Estimate makes its debut January 1, 2010.

Expanded from 1page to 3, the legislators responsible for the new Good Faith Estimate want it to be simpler for homeowners and home buyers to understand than the former version.

By most accounts, Congress will meet this goal. 

The new Good Faith Estimate includes plain-English explanations of every fee, charge, and interest payment involved in a purchase or refinance.  It also includes a section called "The Shopping Cart" in which applicants can compare lenders.

The new Good Faith Estimate is concise, too.  Using a series of "Yes/No" checkboxes on Page 1, mortgage lenders specifically note:

• The interest rate on the mortgage
  
• Whether the interest rate can change over time
  
• Whether the loan carries a prepayment penalty
  
• The length of the rate lock

Currently, this information is spread across 3 separate forms. 

Furthermore, the new Good Faith Estimate simplifies rate-and-fee comparisons, showing applicants how a lower rate can be available for a higher set of fees, and vice versa.

For all of its clarity, though, the new Good Faith Estimate still fails to address the issue of "suitability".  As in, is this the right loan for the right borrower?  That's something only a loan officer can do.

For suitable advice, talk with a loan officer who both listens to your needs and helps you plan for them.  Great terms on an unsuitable loan are often worse than "good" terms on the right one.

DIY : How Do I Fix A Towel Rack That's "Loose"

Over time, towel racks tend to come loose from sheetrock walls.  And, sometimes, they separate completely.  The good news is that making repairs is easy -- it's something you can do yourself with a little instruction.

In this 2-minute video from ExpertVillage.com, a professional contractor shows that with just a drill and some butterfly anchors, re-securing a towel rack can be a basic handyman job.

So, before you call a professional to rehang your towel rack, watch the video and consider making the repair yourself.

The Fed Thinks The Economy Is Improving And What It Means For Home Affordability

Mortgage rates are higher after the Federal Reserve released the internal notes of its September 22-23, 2009 meeting.

Known as the "Fed Minutes", the report details the conversation and cross-currents that led to the Federal Reserve's decision to vote "unchanged" on the Fed Funds Rate after its last meeting.

The Fed Minutes are the lengthy companion to the more famous, succinct post-meeting press release.

As a comparison:

• Press Release: 383 words
  
• Minutes: 6934 words

The extra level of details is a big deal because Wall Street is perpetually in search of clues about what the Federal Reserve is going to do next.

In the past week, multiple Federal Reserve members hinted that the Fed Funds Rate may rise as early as April 2010.  Fed Chairman Ben Bernanke even alluded to it, too.

The minutes revealed that the economy may improve even faster than was previously expected, too.

These acknowledgements are part of the reason why mortgage rates are up. Because the Fed Funds Rate rises to accommodate a growing economy, the prospect of economic recovery is drawing money into the stock market and away from mortgage-backed bonds.

Less demand for bonds means lower prices which, in turn, leads to higher rates.

Foreclosures Concentrate In Just 4 States

For the seventh consecutive month, foreclosure activity in the U.S. was dominated by a tiny subset of states.

As reported by RealtyTrac.com, more than half of September's foreclosure-related activity occurred in just 4 states:

1. California
   
2. Florida
   
3. Nevada
   
4. Michigan

These states represent just 22.05 percent of the total U.S. population.

Overall, foreclosures are up 29 percent from September 2008 and, while, the data seems negative, defaults are creating some interesting buying opportunities.

Foreclosed homes often sell at a discount as compared to non-foreclosed homes. Cheap prices, low mortgage rates and willing buyers have helped to spur home sales in many U.S. markets.   In August, "distressed homes" accounted for one-third of all existing home sales.

That said, buying foreclosures isn't for everyone.

First off, foreclosed homes are often sold "as-is" and may be in perfect condition, or may be inhabitable. If the property falls into the latter category, it's important to get estimates for the work needed to make the home livable. Suddenly, the home may not seem like such a "steal".

And, secondly, buying a home in foreclosure can be a 3-month process or more.  For some people, this is just too long.

Buying a home in foreclosure is fundamentally the same as buying a "regular" home -- there's a contract and a closing.  But most of the steps in between are different. 

Read the complete foreclosure report, plus take a peek at foreclosure heat maps on the RealtyTrac website.  If you like what you see, talk to your real estate agent about what to do next.

Should Joint Homeowners Keep Separate Bank Accounts?

When you own a home with a spouse or partner, the issue of what's mine, what's yours, and what's ours can be a divisive one.

Each household has its own money management methodology and, according to financial talk-show host Suze Orman, most leave significant room for improvement.

In this 4-minute piece aired on NBC's The Today Show, Orman talks about co-managing finances with topics including:

• How to determine how much money goes into a "personal" spending account versus a "family" spending account
  
• The importance of both parties taking an active role in bill-paying
  
• How to manage the money when one partner doesn't earn an income

Being aware of money is the first step towards protecting it.

Use A Retractable Hose Reel To Simplify Yard Work

Sometimes, it's not the yard work that's so tough. It's fighting the garden hose.

Tangles, kinks and hassle can turn watering the yard into a chore unto itself.

Especially if you have store your hose in the garage. Coiling water-logged, dirty tubing can be a real pain.

Enter the 100-foot retractable hose from Frontgate. Wall-mounted and commercial-grade, it's a durable garden hose that simplifies yard work.

The half-inch diameter tubing extends from the casing which is on a 180-degree swivel.  Reaching all the corners of your lawn is a breeze.  And the hose retracts with little effort and no snags.

Plus, the plastic casing can protect your hose from the summer sun.

The Retractable 100-ft Hose Reel is available from Frontgate for $99. It comes with the 100-foot hose included.

C.A.R.’s 2010 Housing Market Forecast released

The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to C.A.R.’s "2010 California Housing Market Forecast," presented today at CALIFORNIA REALTOR® EXPO 2009 in San Jose. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
“California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said C.A.R. President James Liptak. “This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace.”

“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young. “We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer. For the year as a whole, home prices are forecast to reach $280,000. The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government.”

t's A Good Time To Look At Adjustable-Rate Mortgages

According to the Freddie Mac weekly mortgage rate survey, the relative cost of a 5-year ARM is dropping versus its 30-year fixed-rate cousin.

During the first 5 months of 2009, the products ran neck-and-neck. Today, they're a half-percent apart.

On a $200,000 home loan, that's a difference of $60 per month.

Adjustable-rate mortgages aren't for everyone, but for the right household, they can be a terrific fit.  A few scenarios that warrant consideration of a 5-year ARM include persons:

1. Buying a home with an intent to sell within 5 years
   
2. With a 30-year fixed mortgage and plans to sell within 5 years
   
3. Interested in low payments and comfortable with longer-term interest rate and payment uncertainty

Additionally, with homeowners with existing ARMs may want to consider taking on a new ARM, if only to extend their initial, fixed rate period.

Before choosing an ARM, make sure to speak with your loan officer about how adjustable-rate mortgages work, and what causes them to adjust.  Although conventional ARMs are limited in how far they can adjust, it's important to know the risks.

Simple Real Estate Definitions : Escrow Account

An escrow account is a designated savings account into which funds get deposited for a specific purpose.

With respect to real estate and home loans, escrow accounts are used to pay real estate tax bills and homeowners insurance payments.

Escrow accounts are managed and disbursed by lenders.

When a homeowner "escrows" his mortgage, along with his scheduled monthly mortgage payment, he must also send an additional payment to the lender equal to 1/12 of the home's annual real estate tax bill plus 1/12 of the annual homeowners insurance bill.

By sending a pro rata portion of the tax and insurance bill each month, the homeowner's escrow account will always, in theory, have enough funds to make payments in full as tax bills and insurance premiums come due.

The FHA Is Changing Its Streamline Refinance Guidelines November 2009

Beginning November 17, 2009, the FHA will make it harder to qualify for its popular Streamline Refinance program.

Available exclusively to homeowners with existing FHA home loans, the streamline program is meant to help homeowners reduce mortgage payments as simply as possible.

As such, the program carries minimum eligibility requirements.

In fact, the FHA Streamline Refinance is more notable for what it doesn't require from applicants.

• There's no income verification
  
• There's no asset verification
  
• There's no employment verification
  
• There's no appraisal required

The two biggest qualifiers, really, are that the homeowner meets a minimum credit score and that the new loan doesn't exceed the original balance of the old loan.

The new program guidelines, however, are much stricter. 

Effective next month, among other requirements, applicants must show evidence of employment and income, plus proof of cash required at closing. 

Furthermore, homeowners can't finance closing costs into the mortgage without a complete home appraisal.  In areas of declining value, this may render refinancing with the FHA impossible.

Therefore, if you're a homeowner with an FHA mortgage, consider contacting your loan officer before the November 17 deadline to explore your Streamline Refinance options.  Mortgage rates are low and you never know for what you'll qualify.

The worst thing you can do is to wait too long to find out.  Once the deadline passes, the old guidelines will be history.

Pending Homes Sales Gain For The 7th Straight Month

Buoyed by a generous tax credit, affordable homes, and low mortgage rates, the Pending Home Sales Index posted its seventh consecutive monthly gain in August.

It's the longest winning streak in the index's history and the highest reading in 2-1/2 years.

It's also another signal that the housing market is in recovery.

"Pending home sales" are a forward-looking indicator, measuring the number homes under contract to sell, but not yet closed. 

Historically, 80% of homes under contract close within 60 days.  Most others close within 120 days.

It's no wonder home values are rising in so many markets.

Home buyers -- take note.  If you're plan to purchase a home between now and the New Year, expect that the recent run in pending sales will turn into run of closed sales which, in turn, should pump prices up and drop home inventory.

With mortgage rates hovering near 4-month lows, the best way to find a value in housing may be to act sooner rather than later.

How Often Should You Change Your HVAC Air Filter? It Depends.

If you haven't changed your home's air filters lately, this 1-minute video will demonstrate just how much energy your HVAC unit is wasting.  A clogged air filter operates with a lot less efficiency.

Air filters should be changed at least once per quarter. In certain circumstances, however, more frequent replacements are warranted.

• Homes with shedding pets
  
• Homes under construction
  
• Brand-new homes with dust in the air
  
• Homeowners with asthma or allergies

Also, when you replace your filters, don't reach for the $0.99 cheap ones.  Plainly, they don't work.  Instead, spend $15 to get a filter that works.  Or, buy in bulk to save 15% from Amazon.com or a local hardware store.

NO NEW 21-DAY TURNAROUND REQUIREMENT FOR SHORT SALE APPROVALS

Recently enacted Senate Bill 306 does not require lenders to review short sale requests from sellers and their agents within 21 days. The new California law, which addresses certain escrow procedures, has been mischaracterized by some practitioners as landmark legislation calling for a 21-day turnaround for short sale approvals.
The new law inserts a short payoff amount request into the existing payoff demand law which generally requires a lender to respond to a request for a payoff demand statement within 21 days from when it is requested, typically by escrow. The new law essentially requires, after a short sale has already been approved, for the lender to respond to a request for a short-pay demand statement within 21 days. The lender’s response to escrow can be a short-pay demand statement or even, depending on the circumstances, a written statement electing not to proceed with the proposed transaction.
Another provision of SB 306 may also cause confusion. In practice, a lender may approve a short sale subject to its review of a closing statement prepared by escrow, but the lender does not review that closing statement promptly. Under the new law, if a lender fails to approve the closing statement within four days, the closing statement shall be deemed approved, but only if it is "not clearly contrary to the terms of the short-pay agreement or the short-pay demand statement provided to the escrowholder." The new law does not bind a lender to a short payoff amount in an offer that the lender has not approved.
Senate Bill 306 contains other technical changes in real estate related laws, such as, but not limited to, the following:
• Expanding the existing requirement for a lender to contact certain borrowers to explore options for avoiding foreclosure at least 30 days before filing a notice of default, to include not only owner-occupied residences, but also owner-occupied residential property with two-to-four dwelling units.
• Extending the existing requirement for a lender to record a notice of sale from 14 to 20 days before a trustee's sale. This provision does not change existing law requiring a lender to wait at least 20 days after mailing a notice of sale before conducting a trustee's sale.
This new law comes into effect on January 1, 2010. The full text of Senate Bill 306 is

The Sellers' Deadly Sins : How To Keep Your Home From Selling At Maximum Dollar

It's a sensational headline -- "The Sellers' Deadly Sins" -- but the message is clear.  Home sellers make mistakes that not only cost themselves thousands, but sometimes cost the sale, too.

NBC's The Today Show lays it out cleanly in this 5-minute video:

1. How to respond to an "insulting offer"
   
2. How to handle the first purchase offer you receive
   
3. What do when you can't leave your home for its Open House
   
4. What room in the home should be kept the neatest

But, be aware.  At the video's end, there's a piece of advice that may sound extremely self-serving coming from a real estate professional.  Don't let it turn you off.  The video's overall message is spot-on and the advice is real-world tested.

Selling a home is a process. Make sure to do it properly.

You've Got 15 More Days To Use The First-Time Home Buyer Tax Credit

The government's First-Time Home Buyer Tax Credit program expires November 30, 2009 -- a scant 60 days from today.

Considering it can take up to 60 days to close on a home, first-time buyers have 2 weeks at most to find a home.

Buyers not under contract by October 15 have little chance of meeting the November 30 deadline and, therefore, little chance of claiming the tax credit.

This is especially true for purchases involving short sales and foreclosures.

Congress passed the First-Time Homebuyer Tax Credit program as part of the 2009 economic stimulus plan.  IRS Form 5405 outlines the program criteria which include the following stipulations:

• Buyer may not have owned a "main home" in the past 36 months
  
• The home may not be purchased from a parent, spouse, or child
  
• Adjusted gross income for the household must be below $95,000 for single tax filers and $170,000 for joint tax filers

The credit is capped at $8,000 or 10% of the purchase price, whichever is less.  And don't forget -- the First-Time Home Buyer Tax Credit is a true tax credit. It's not a deduction.

This means that a tax filer who claims the full $8,000 and whose "normal" tax liability is $5,000 would receive $3,000 cash from the US Treasury when their tax return is processed by the IRS.

If you can't close by November 30, 2009, though, you can't claim the credit.

The clock is ticking. If you're planning to use the First-Time Home Buyer Tax Credit, the time to act is now.