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Should I Buy A Home Now or Wait?

by The Mike Parker Team

"Should I Buy a Home Now, or Wait?"

Will prices get better if I wait? Will mortgage rates be lower if I wait? Will I have a wider choice of homes to buy if I wait?

All good questions. They deserve good answers.

(1) Will home prices get better if I wait?

The average home price in the MLS of Greater Cincinnati has fallen by 13 % over the past year. As the number of homes for sale shrinks (see question #3 below), that will create pressure for higher home prices. It may not happen over night, but it will happen. In a recent Baylor University survey, 8 of 10 economists agreed home prices will rise in the next 5 years. So will rental costs.  Do you want to capture the advantage of equity build-up...or collect "throw-away" rent receipts?

(2) Will mortgage rates be lower if I wait?

Today's mortgage rates are near 50-year lows. They are at bargain levels. But if you've never bought a home before, you just don't realize the "borrowing power" of today's low rates (unless your parents, friends, or other relatives told you). You don't have to pay 15% for a home loan, as you did in the early 1980s, or 7%-to-8% in the 1970s and 1990s. Today they're between 5-6%. That's all.  But when inflation returns, you can "kiss goodbye" mortgage rates under 7%.

(3) Will I have a wider choice of homes to buy if I wait?

There are currently 14,182 homes for sale in the MLS of Greater Cincinnati. One year ago that number was 16,680. Two years ago it was 17,880. The trend in the number of homes available is definitely downward. The lower the inventory, the greater pressure for higher prices. So, should you wait for a wider choice? Fewer homes on the market = higher selling prices. So, do you want to buy low (now), or buy higher (later)?  Is there any particular reason, as a First-Time Buyer, why I should buy now?

Yes.

Until Nov. 30, 2009, first-time buyers are eligible for a "federal tax credit" up to $8,000 on the purchase of a home. Pure credit. Not repayable. Anyone who hasn't owned a home in the past 3 years may be eligible, if they meet income limits -- single buyers, $75,000 a year; married couples $150,000. The credit decreases for single buyers earning between $75,000 and $95,000, and between $150,000 and $170,000 for home buyers filing jointly. If you finance your home through FHA, you may use the tax credit money to help pay for down payment or closing costs. If you've been sitting on the fence, now is the time to get OFF that fence. Arm yourself with the facts, and join the 75 million homeowners nationwide who enjoy the benefits of home ownership (equity build-up, home appreciation, tax advantages, and pride of ownership).

Call The Mike Parker Team. We know (a) local market home inventories, (b) homes values, (c) lending programs, (d) first-time homebuyers tax credit program and (e) everything else to help you make a housing choice...TODAY. It's time to...Get Off the Fence.

 

Home Prices Rise Across U.S.

by The Mike Parker Team

Home Prices Rise Across the U.S.
Bargain Hunting, Low Rates Drive First Gain in 3 Years; Double Dip Still Possible

This article was in the Wall Street Journal on July 29, 2009

By Nick Timiroas and Kelly Evans

Home prices in major U.S. cities registered the first monthly gain in nearly three years, according to a new report that provided fresh evidence that the severe U.S. housing downturn could be easing.

Standard & Poor's Case-Shiller index, which tracks home prices in 20 metropolitan areas, rose 0.5% for the three-month period ending in May, compared with the three months ending in April. It marked the index's first increase after 34 straight months of decline, and came after a variety of housing indicators has shown glimmers of hope for the past several months.

video 

Are the Bulls Here to Stay?

3:51

While the recent rally and upbeat housing news are encouraging, issues like earnings growth may play a role in any recovery. Jeffrey Kleintop, CFA and chief market strategist for LPL Financial, explains his view to Kelsey Hubbard.

Home prices remained down about 17% from a year earlier, according to the index. According to S&P/Case-Schiller's seasonally adjusted numbers, which it began reporting only earlier this year, prices in May posted a 0.2% decline.

But most Wall Street economists who discussed the survey focused on the April-to-May rise, saying it represents a significant change in direction. Home prices in 15 of the 20 areas in the survey rose or remained stable.

The results were also consistent with other recent housing data, these economists said. Sales of new and existing homes rose for three consecutive months through June. Housing starts were up in June, and an index of builder sentiment rose in July, though both remained at low levels.

May's uptick came in part as home prices in some areas fell enough for investors and first-time buyers to begin competing for bargains, helping to ease the backlog of unsold homes.

Other likely sales spurs included mortgage rates that fell to 50-year lows, an $8,000 federal-tax credit for first-time homebuyers and the ability of buyers to secure mortgages from the Federal Housing Administration with as little as 3.5% down.

The latest readings don't necessarily herald a full-blown recovery for the housing market or broader economy. Consumer confidence remains near record lows. The U.S. unemployment rate, at 9.5% in June, is expected to hit double digits before year end, making swift growth and an expanding labor force unlikely anytime soon.

The home-sale numbers surprised Robert Shiller, the Yale University economist who helped create the Case-Shiller indexes. "The change in momentum here is very significant," he said. Last month, Mr. Shiller forecast sustained home-price declines into the next few years, which he said now looks less plausible. He said he expects home prices to remain near current levels for the next five years.

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U.S. home prices have fallen by about one-third since their peak in the second quarter of 2006, according to S&P, and are roughly back at 2003 levels.

Some analysts warn that the home-price uptick could reverse as rising unemployment causes more Americans to fall behind on their mortgage payments and end up in foreclosure.

One factor that apparently drove the March-through-May uptick was a falling share of homes sold at distressed prices, through foreclosure and so-called short sales. Distressed sales accounted for 33% of existing home sales in May and 31% in June, down from a high of nearly 50% earlier this year, according to the National Association of Realtors.

The drop in foreclosure sales was likely the product of U.S. banks' moratorium on home foreclosures, which they undertook as the government launched a round of programs to modify and refinance loans for at-risk borrowers. Most banks ended their foreclosure moratoria in March.

Interest rates also hovered at or below 5% for most of the March-May period, before rising in June.

"Were it not for those rate reductions and the moratorium, you'd see prices down right now," says Ronald Temple, co-Director of Research at Lazard Asset Management. He expects the index to stabilize or increase in the short-term, but forecasts another 12-15% decline in prices thereafter.

Regardless, a combination of still-low interest rates and eager sellers continues to fuel competition for heavily discounted properties. Some buyers are finding that investors with all-cash offers are consistently beating them in bidding wars.

Stacy Watson, a 39-year-old human-resources manager in the Riverside, Calif., area, says she has made losing bids on at least eight homes since mid-June. On Tuesday, she says, she decided to increase her offer for a five-bedroom home in Perris, Calif., to $198,000, nearly $20,000 more than the asking price.

Ms. Watson and her real-estate agent say the bank-owned home has drawn more than 10 offers in less than a week on the market. "Everyone says it's such a great housing market for buyers," she says. "No. This is hard."

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Home Prices Rise Across U.S.Associated Press

Cleveland-area home prices rose 4.1% in the three months ending in May; a worker erecting a for-sale sign in April in nearby in Chagrin Falls, Ohio.

Home Prices Rise Across U.S.Home Prices Rise Across U.S.

Would-be homeowners have benefited from government programs, including one that allows buyers of properties owned by Fannie Mae to receive mortgages from the government-controlled mortgage-finance company with down payments as low as 3%.

When Nelly Whiteman and her husband recently bought a house out of foreclosure from Fannie Mae, she figures they competed against at least two other buyers. The 27-year-old administrative assistant says they snagged their three-bedroom home in Orangevale, Calif., for $176,000, or about $5,000 more than the asking price. They now pay about $1,080 a month in mortgage payments, insurance and taxes.

"It's an extra bedroom for around what we were paying for rent," she says.

The budding housing recovery isn't being felt across the country. Prices increased in 13 of 20 surveyed markets, with the strongest gains coming in Cleveland, up 4.1% from April; Dallas, up 1.9%; and Boston, up 1.6%.

Home prices were flat in the New York and Tampa, Fla., areas. The survey doesn't track condominium or cooperative apartment sales, so it doesn't take into account the majority of housing stock in New York City.

Prices continue to fall in some markets, particularly overbuilt Sunbelt cities. Prices in Las Vegas declined 2.6% in May from April and were down 32% from a year ago, according to S&P/Case-Shiller. Phoenix prices declined 0.9% from April and were down 34% from May 2008. San Francisco, Miami and Detroit also continued to see year-on-year declines of about 25%.

"Is this just a spring bounce that was partly related to the drop in distressed sales?" asks Thomas Lawler, an independent housing economist based in Leesburg, Va. One key question, he says, is whether another wave of foreclosures could come along to offset the home-inventory decline that has boosted many markets.

In many of the hardest-hit cities, banks appear to be slow to put foreclosed homes on the market. In Las Vegas, for example, banks had taken title to 13,200 homes as of June. That surpassed the total number of homes listed for sale in Las Vegas last month, according to SalesTraq, which monitors inventory in Las Vegas. "Are the banks are intentionally holding back inventory? That's a question a lot of us have," says Larry Murphy, president of SalesTraq.

Some housing analysts say they expect falling prices on mid-to high-end homes to weigh on the Case-Shiller index. The supply of these homes has swelled in recent months as borrowers struggle to obtain financing.

Borrowers of "jumbo" mortgages, which are too big for government backing, face higher rates. Banks are also requiring bigger down-payments at a time when traditional "trade-up" buyers are finding that the equity in their homes has fallen.

"We think [the sales index] will look like a 'W,' where prices go up until the foreclosures at the higher end translate into another leg lower," says Ivy Zelman, chief executive of Zelman & Associates, a housing-research firm.

The improvement in housing likely gave a small boost to U.S. gross domestic product in the second quarter, economists said. After data showed construction of new homes was stronger than expected in June and was revised higher in April and May, Macroeconomic Advisers, a St. Louis-based forecasting group, ratcheted up its estimate of second-quarter economic growth. It now sees output shrinking at just a 0.5% annual rate in the second quarter, compared with declines of 6.3% and 5.5% in the previous two quarters.

The government will report its official estimate of second-quarter growth on Friday.

Northern Kentucky Area Schools Set To Begin Soon...

by The Mike Parker Team

Northern Kentucky Schools are set to begin soon.  Below is a comprehensive list of area schools and their prospective start dates.  Please check with your child's school to confirm the actual date!!

 

School                                           Start Date
Boone County 8/19/09
Kenton County 8/19/09
Walton Verona 8/06/09
Campbell County 8/10/09
Grant County 8/13/09
Pendelton County 8/18/09
St. Joseph Academy Walton 8/19/09
Immaculate Heart of Mary 8/17/09
St. Henry Elementary 8/17/09
St. Paul Elementary 8/19/09
St. Henry High School 8/17/09
Villa Madonna 8/18/09
Notre Dame Academy 8/19/09
Covington Catholic 8/18/09
Covington Latin 8/17/09
Bishop Brossart High School 8/10/09
Holy Trinity Junior High 8/18/09
Newport Central Catholic 8/19/09
Silver Grove Schools 8/05/09
St. Joseph Cold Spring 8/19/09
St. Catherine Of Siena 8/25/09
Mary Queen of Heaven 8/19/09
Lulow Independant Schools 8/13/09
Erlanger Elsmere 8/17/09
St. Agnes 8/20/09
St. Augustine 8/18/09
St. Pius X 8/19/09

 

For a complete list of schools, please visit www.nkyschools.com.  Have a safe and wonderful 2009 - 2010 School Year!!!

 

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Mike Parker - CRS
HUFF Realty
60 Cavalier Blvd.
Florence KY 41042
859-647-0700