Long Awaited Housing Recovery Underway

Denver, CO – The housing industry is staging a recovery with
increasing sales and stabilizing prices, according to a national survey of
RE/MAX agents. Four out of five agents believe U.S. home prices won’t
further. In fact, nearly 70% predict prices will go up, led by a strong demand
for homes in the low to middle price ranges.

To active real estate
agents, this market is definitely heating up
,” said Margaret Kelly, RE/MAX
CEO. “They are witnessing a recovery across the country fueled by home
buyers and sellers taking advantage of a significant market opportunity

Agent opinions are documented
in the quarterly RE/MAX Market Insights, an online survey of 1,022 residential
experts. Collectively, RE/MAX agents sell more real estate than any other real
estate network in the U.S.

Key findings include:

• Price rebound: 68% say prices
will be higher by the end of 2012.

• Today’s prices: 29% below the
peak reached during the housing bubble.

• Demand for lower-priced properties:
80% of agents say it’s good or very good.

• Demand for homes in the
middle-price ranges: 71% rate it as fair to good.

• Demand for high-priced homes:
58% call it poor to fair.

A snapshot of today’s
homebuyers served by RE/MAX agents:

• Roughly one third are
first-time buyers. Another third are homeowners looking to sell so they can
move up or downsize. The remainder are mostly investors, who believe the market
has hit bottom.

• One in five buyers pays cash,
receiving an average discount of 15%.

The most significant challenges
facing first-time homebuyers are having an acceptable credit score, posting a
down payment, and facing a shortage of homes for sale. Repeat buyers have the
added burden of selling their current home. They, too, are facing a scarcity of
homes to purchase in the lower and middle price ranges.

Nearly half of the agents say
lower priced homes in their markets are selling for slightly less than the
asking price, while 17% say buyers are paying full price and 11% say buyers are
paying slightly more than the asking price.

homes in the middle-price ranges, 49% report sale prices are slightly less than
the asking price, while 8% say full-price is being paid. For the high-priced
homes, 43% report that sale prices are moderately less than asking prices, with
another 25% saying it is slightly less.

With bank-owned homes making up
a significant portion of the current inventory, agents report that 62% of their
non-investor buyers have a favorable attitude toward foreclosures, while only
27% have a favorable attitude toward short sales.

With distressed properties
still making up a sizeable portion of homes on the market, this inventory is
being cleared effectively by buyers, who don’t mind investing a little to fix
up a property in return for an attractive bargain
,” Kelly added.

Among buyers’ highest
priorities were quality of schools, and condition and size of the home. The
lowest priorities included public transportation, walkability and energy

Most RE/MAX agents advise
their buyers to hire a professional home inspector and to attend the
inspection. Getting pre-approved for a mortgage, not merely pre-qualified


Know Your Expenses Before You Buy

For many, homeownership is still a dream. Moving from renting can seem like it’s an impossible mission. But if you plan ahead and carefully budget, the goal of homeownership can be yours.

When budgeting how much home you can afford, it’s important to understand and anticipate the costs of owning and maintaining a home. Here are a few things that some first-time buyers forget to include.

Private Mortgage Insurance

This is added on to your mortgage when the down payment is less than 20 percent. You can buy a home with less money but you’ll pay the PMI which covers the lender should  a homebuyer default on the loan. As you build up equity, your PMI drops off.


Property taxes generate revenue for municipalities, counties, and schools. It’s an expense that can vary across the U.S. However, on average, it’s 1.38 percent of the home’s value. Back East tends to have the highest property taxes.

HOA Fees

Homeowners’ Association fees (HOA) can add several hundred dollars to your monthly household expenses. These HOAs help to maintain common areas, typically within condominium complexes. They also govern what can be done to the unit and the surrounding area. While there is an up side to HOAs, some buyers prefer to have more freedom over their property, perhaps, until the neighbor paints his house turquoise with red accents.

Homeowner’s insurance

Lenders require homeowner’s insurance on your property. The amount you’ll pay depends on many variables including: where you live, the age, type, size of your home. For example, older homes can cost more to insure due to the fact that they may require more repairs than newer homes. Also,  high-hazard areas can cost more to insure and some insurance companies may not offer an insurance policy for your home, if you’re in a high-risk area.

Utilities and appliances

These areas can be overlooked because, often, when people are renting the appliances  are taken care of. When you own your own home, be sure to consider expenses such as the water heater or dishwasher breaking down. While, you can’t exactly figure out when an appliance is going to quit working, you can set a monthly allowance aside to start establishing a household repair fund. Just don’t touch the account or when you really need it, you’ll find it’s not there for you.

Inspections, appraisals, and closing costs

Many buyers understand they will have closing costs but they fail to budget for other items such as a home inspection. Sometimes inspections are paid for by the seller but it’s usually the buyer who pays for the inspection. And, even if the homeowner recently had a home inspection and has the report, a buyer still might want to pay for an inspector to have another look to compare the findings.

Depending on the home, there may also be other inspections such as for lead paint, pests or radon gas.

While the extra expenses do add up quickly, if you carefully budget and plan ahead, the goal of homeownership is achievable and very satisfying.

5 Steps for Getting Ready to Buy

Step 1. Find a Local Lender You Can Talk To in Person
Local lenders understand your market and know of loan programs that might be beneficial to you.

Check with your lender on any local programs that might help with closing costs or in other ways.

Check it out for yourself and then get preapproved for a loan so you know how much house you’re able to buy.

Step 2. Be Specific in the Area You Want To Live
Educate yourself. Familiarize yourself with the neighborhoods you’re
interested in, the taxes and school districts. This not only helps you narrow
down your search when you need to move fast, but also helps you figure out
potential mortgage payments.

Step 3. Find an Agent Specializing in the Area You Want to Live
This will save you time and effort. Once you’ve identified a real estate agent,
trust him or her to do the job. Agents who are thriving in this challenging
market have protrust him or her to do the job. Agents who are thriving in this challenging
market have ven their worth. They have the resources and skills to help you
find your next home.

Step 4. Don’t Shy Away From Houses That Need Some Work
Just because a house needs some paint orcosmetic fixes doesn’t mean it’s not a good buy. Most real estate agents have an
address book full of trusted businesses they work with to help you fix up your
new home. There’s an HUD program known as 203(k) that enables you to fold repair
money into a primary mortgage; ask a RE/MAX agent in your market about the

Step 5. Be Prepared To Act

Sometimes the first home you see is the right one for you. Don’t discount it. Remember, good deals
still go fast. Take advantage of the electronic tools your real estate agent has
to offer. In many instances, real estate agents have access to better
information than what you can find in a standard Internet search.


Americans More Confident in Housing Recovery

Potential homebuyers and sellers are growing more confident that the U.S. real estate market will begin to recover as soon as next year, according to a Prudential Real Estate survey.

Sixty percent of people surveyed last month had positive views about the housing market and 70 percent expected property values to improve over the next two years, according to the survey released today. About 63 percent of respondents said they considered real estate a good investment, up from 52 percent last year, the Irvine, California-based broker reported.

This is the second consecutive year consumer confidence in housing has improved, signaling the property market may “finally be climbing out of its deep hole,” Stephen Van Anden, chief marketing officer for Prudential Real Estate, said in a telephone interview.

While foreclosures and declining home prices have contributed to a six-year real estate slump, rising employment and low mortgage rates may be bolstering buyer confidence. The Federal Reserve, in its regional Beige Book business survey issued Feb. 29, said the housing market “has improved somewhat in most districts” with Boston, Cleveland, Atlanta and Dallas among cities reporting increases in home sales.

More than 90 percent of respondents in the Prudential survey said the housing crisis is a reminder they must be more cautious in buying and selling property. About 80 percent of people polled said homeownership is important to them, while 15 percent said the economic downturn made owning a home less important.

“There is still a desire for homeownership, and as we see continued improvement in the job market, there is going to be an unleashing of pent-up demand,” Van Anden said.

Survey respondents were 25 to 64 years old with a household income of at least $50,000, and either recently bought or sold a home or are considering a purchase or sale. Prudential Real Estate collected responses from 1,251 people.

Remodeling Improvements That Entice Buyers

Over the last few years, some homeowners have opted to stay put for the time being and that’s caused them to consider remodeling instead of moving. But most homeowners know that one day they might need or want to sell their home so which remodels help to add value and entice buyers?


There are a few areas that are better than others to improve. It’s pretty easy to understand why these home remodels are enticing buyers when you consider the way the housing market has been for the past several years.

Here are a few of the renovations that are adding value to homes and creating appeal from home buyers.

Savvy Kitchen

The great rooms that bring the kitchen and the eating areas together are still popular. More space is preferred so families can have room to sit and spend time together over a meal even if that means having less space to actually prepare the food. Cabinets and shelving are being customized to suit the homeowners’ needs and many are favoring pantries or utility rooms. Kitchens are taking on the look of a chef’s cooking space with open shelving and islands to help homeowners be able to quickly prepare meals and still mingle with guests and family.

Totally Wired

Fast-placed, busy buyers who often work from home will find smart homes that are wired and built to handle all the high-technology needs a huge plus when it comes time to market and sell their homes. Another plus is having space-saving workstations in the home. Remodeled homes that feature floor-to-ceiling bookcases and wiring for home offices are increasingly becoming the norm in many homes.

Outdoor Living

This continues to be a popular trend. Making the most of living spaces, even those in the garage and outside, is a huge benefit. Homeowners are capitalizing on all possible livable space by creating outdoor living rooms complete with wiring for entertainment, cooking, and relaxing. Outdoor furniture is also being featured inside as well as outside the home, blending the line between the two.

According to the Census Bureau, 2011 home starts were bigger and featured more amenities than in the previous year. It seems houses are growing again. The average new-home’s square footage is was 2,522 in 2011, up from 2,381 square feet.

Not all remodels add value to the home. The balance of achieving what you like in a home and which improvements can potentially increase the sale of your home, can allow you to make smart home improvement choices.

Re/Max co-founder voted People’s Choice Most Influential in Real Estate

Inman News readers have picked Re/Max founder Dave Liniger as the People’s Choice Most Influential Real Estate Leader in 2011.

Liniger, 66, who co-founded Re/Max with wife Gail in 1973, serves as chairman of the board for the global franchisor and remains involved with company decisions. He often travels abroad to meet with new regional Re/Max owners, in places ranging from India to Argentina to Brazil.

Liniger oversaw the expansion of Re/Max global franchise operations to eight additional countries in 2011 — there is now a brand presence in every country in Central America and South America, and the franchisor has more than 90,000 affiliated real estate sales professionals in about 80 countries.

A resident of Castle Rock, Colo., Liniger consulted with lenders in 2011 about the need to improve the short-sale process, and he also advocated for higher conforming loan limits, less restrictive lending standards, and the availability of refinancing for underwater homeowners.

Liniger’s top 10 real estate predictions for 2012:

1. Continued low interest rates.
2. Home prices stabilizing and starting to rise.
3. Increasing numbers of home sales.
4. Rising inventories, mostly due to increased foreclosures.
5. Distressed properties will make up about half of all sales.
6. An improved short-sale process to help avoid foreclosure.
7. Homeownership rates continue to fall.
8. Foreign and domestic investors will buy 25 percent of homes.
9. Increasing reliance on real estate agents.
10. Increased use of mobile and social technologies.

Colleagues report that Liniger “starts his day early, and, most days, is the very first person to arrive at the office.” The company has shared some of its success with charities such as the Children’s Miracle Network Hospitals and Susan G. Komen for the Cure. Liniger’s hobbies include golf, boating, ballooning and car collecting — he was a part of a crew that sought to circle the globe in a high-flying balloon in 1999, and he has previously been a race-car driver and team owner.

Liniger also selected to the annual Inman 100 list of Most Influential Real Estate Leaders for 2011 — tht list is separate and distinct from the individual People’s Choice recognition, and is based on a reader nomination process and an in-house review and selection process by Inman News.

Congratulations on a job well done!!!


Realtor.com Lists Top 10 Turnaround Towns

Realtor.com released its list of the top 10 turnaround towns for the 2011 fourth quarter. While the 10 towns listed – eight of which are in Florida – suffered from high foreclosure rates, they are now rebounding. The current list was developed based on market rankings on year-over-year median price appreciation, reduction in year-over-year median age of inventory, and inventory reduction levels from Realtor.com, as well as unemployment rates on a year-over-year basis, according to a release from Move.com.

  • Miami, Florida, at number one, had sales of existing single-family homes shoot up 51 percent in the third quarter compared to a year ago, according to the Miami Association of Realtors. The median age of inventory is down 30 percent from a year ago.
  • Phoenix, Arizona is returning to stability, with median list prices up 15.38 percent compared to a year ago.
  • Orlando, Florida saw its median age of inventory go down to 73 days, a 36 percent drop from a year ago and inventory also declined 44 percent compared to a year ago.
  • Fort Myers-Cape Coral, Florida saw its sale price increase 20 percent over the past year, more than any other Florida market, though sales are down 13 percent.
  • Sarasota-Bradenton, Florida saw an increase in sales by 17 percent over last year. Median list prices were also up 2 percent.
  • Boise City, Idaho experienced a reduction in foreclosures, helping the town also see a 40 percent year-over-year decline in inventory.  This reduction in inventory also led to a 23.42 drop in the median age of inventory.
  • Naples, Florida had a 13.38 percent year-over-year increase in median list prices, and a 35.94 percent reduction for sale inventory.
  • Fort Lauderdale, Florida reduced its inventory by 41.63 percent since last year, and sales were up 18 percent year-over-year.
  • Lakeland-Winter Haven, Florida increased by  9.09 percent in median list prices compared to a year ago. Inventory declined 35.28 percent since last year.
  • Punta Gorda, Florida made the 10th spot with median price appreciation up 17.79 percent compared to a year ago.


Real Estate Outlook: Sales Rise


by Carla Hill

The latest quarterly report from the National Association of Realtors shows that many metro areas are now seeing more balanced conditions. Lawrence Yun, NAR chief economist, said the figures of this report reflect greater home sales activity at lower price points. “Sales have risen strongly in lower price ranges from one year ago, while sales at the upper end remain sluggish,” he said. He continued that “more importantly, we’re seeing a consistent trend of declining inventory, which means supply and demand conditions are becoming more balanced in more areas, which will help stabilize home prices.” In terms of pricing, median existing single-family home prices rose in 29 out of 149 metro areas in the fourth quarter of last year. The national median price was $163,500 for the quarter, down a considerable 4.2 percent from the year prior. Partly to blame for this drop is the still high number of distressed homes on the market, accounting for 30 percent of sales and selling at discounts of 15 to 20 percent. According to the NAR, “Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times because the level of distressed sales, which artificially depress median prices, can vary notably in given markets. Annual price measures, also reported today, generally smooth out any quarterly swings.” It’s important to keep in mind that real estate is about local trends. Your state or region may be experiencing a slow down, but if you have booming job growth in your town then the housing market will likely reflect this. Regionally, you’ll see the most buying power in the Midwest, which boasts the lowest prices. In the Midwest, existing-home sales increased 7.0 percent in the fourth quarter and are 14.1 percent higher than a year ago. The median existing single-family home price in the Midwest declined 3.3 percent to $134,100 in the fourth quarter from the fourth quarter in 2010. NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said market conditions vary widely around the country. “Even with record high housing affordability conditions, all real estate is local,” he said. For now the broad national scope saw existing-home sales increased 5.9 percent in the fourth quarter and was 9.2 percent above last year at this time. The NAR reports that all regions rose from third quarter levels.

Florida’s $8.4 billion foreclosure take second highest in nation

by Kim Miller

Florida’s $8.4 billion share of a landmark foreclosure settlement announced Thursday is second only to California’s take, which is estimated to be about $18 billion.

The deal with the nation’s five largest lenders gives different credit amounts to banks depending on the relief provided homeowners, so while it’s being billed as a $26 billion settlement, it could actually provide up to $40 billion in cash and mortgage relief to homeowners.

U.S. Attorney General Eric Holder said this morning the foreclosure-related settlement was reached following “disturbing practices,” found at the country’s largest banks.

“Our investigations revealed disturbing practices, servicers who pushed borrowers into foreclosure even though federal regulations required them to try other foreclosure alternatives first,” Holder said this morning. “This fueled the downward spiral of our economy and communities nationwide.”

The current breakdown is $17 billion directed to underwater homeowners for principal reductions, $5 billion in cash to states, $3 billion for refinance programs and a $1 billion settlement reached with Bank of America and Countrywide for a claim that will go to the Federal Housing Finance Agency.

The negotiations went well into the night Wednesday and even early Thursday morning it was unclear if all of the states had signed onto the agreement. Oklahoma was the lone holdout.

At 10 p.m. Wednesday, Florida Attorney General Pam Bondi, who was a main negotiator of the settlement, said she believed they had found accord on a deal that “provides Floridians with much-needed relief and reforms the mortgage-servicing industry.”

Florida’s share of the total monetary benefits under the settlement is approximately $8.4 billion.

It breaks down as follows:

* Florida borrowers will receive an estimated $7.6 billion in benefits from loan modifications, including principal reduction and other debt relief.

* About $170 million will be available for cash payments to Florida borrowers who lost their home to foreclosure from Jan. 1, 2008 through Dec. 31, 2011 and suffered servicing abuse.

* The value of refinanced loans to Florida’s underwater borrowers would be an estimated $309 million.

* The state will receive a direct payment of $350 million.

“This settlement will provide substantial relief to struggling Florida homeowners, and ensures that our state gets its fair share of the relief being provided nationally,” Bondi said this morning. “This agreement holds banks accountable and puts in place ne protections for homeowners in the form of strict mortgage servicing standards.”

For more information go to www.nationalforeclosuresettlement.com.

Banks involved in the settlement include Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. Fannie Mae and Freddie Mac loans are not covered by the agreement.

Federal officials hope to get another nine mortgage servicers to sign onto the agreement, which could raise the monetary relief to $45 billion nationwide.

Attorney General Eric Holder, Department of Housing and Urban Development Secretary Shaun Donovan, and Iowa Attorney General Tom Miller stressed this morning that the large settlement focused only on making amends for robo-signing issues and mortgage servicing violations.

And officials acknowledged that cash awards to homeowners already foreclosed upon would be minimal, likely only between $1,500 and $2,000 depending on how many people apply for the money.

The Home-Credit Derby Has Its Price

Federal tax credits for home buyers are some of the best deals around—but you
will have to jump through some hoops to get one before the deadline.

Under the program, first-time buyers can take up to $8,000 off their taxes,
and existing-home owners can take up to $6,500. To qualify, a contract to buy
must be signed by April 30 and the purchase must close by June 30.

When the program was expanded late last year, the income limits were raised.
Now, individuals with adjusted gross incomes up to $125,000 and married couples
with adjusted gross incomes up to $225,000 qualify on home purchases up to
$800,000. If you owe less in taxes than the credit, the Internal Revenue Service
will send you a refund check.

But these days, getting a mortgage involves something of a financial
inquisition. Here is what you need to know before you jump in:

To qualify for a mortgage, you will need a job and at least two recent pay
stubs. You also will be asked for two years of W-2 forms, proof of other assets
and either your tax return or a form allowing the lender to get your return from
the Internal Revenue Service. That means that items that reduce your adjusted
gross income, like business expenses or IRA contributions, can reduce the loan
for which you qualify.

Then there is the appraisal challenge. With home prices still falling in many
markets, an appraisal below the purchase price puts the deal in jeopardy. That
is because a low appraisal means the buyer must come up with more cash or the
seller must lower the price to keep the deal alive.

David Romero, who has 17 Century 21 offices in Southern California, says that
has been a problem in San Diego, where lower-priced properties are in demand and
buyers sometimes get into bidding wars.

Mortgage rates remain low—around 5% for a 30-year mortgage and closer to 4%
for a shorter one. But to get the best advertised rates, you will need a FICO
credit score of at least 720 out of a possible 850. Under guidelines set by Fannie Mae, the big
mortgage buyer, every 20-point drop in your credit score below 720 results in a
steeper origination fee.

While you can put down as little as 5%, you also generally will pay more fees
with a lower down payment.

Fannie Mae has increased its minimum credit score to 620 from 580, but in
reality, buyers on the low end may still have trouble getting a loan. If you put
down less than 20% of the purchase price, as many first-time buyers do, you will
need to buy private mortgage insurance, which helps protects the lender from a
default. Today, most mortgage insurers aren’t insuring mortgages if the
borrower’s credit score is below 680. Some charge higher rates for scores below

Mortgage insurance costs vary widely based on the insurer, credit scores and
down payments, ranging from $300 to more than $1,000 a year for every $100,000
you borrow.

Federal Housing Administration loans allow for down payments as low as 3.5%,
but also require an upfront mortgage insurance payment of 1.75% of the loan
amount, which climbs to 2.25% next month. Borrowers also pay about $500 a year
for each $100,000 borrowed.

If you put down between 20% and 25% of the purchase price, you will find
yourself in a strange middle ground: You will avoid mortgage insurance, but you
will pay extra origination fees because Fannie Mae considers this group to be
its highest risk at a time when home prices may decline.

For example, a buyer in this category with a credit score of 680 to 700 would
pay an origination fee of 1.5% of the loan, while a buyer who put down 10% would
pay a fee of half that.

Last, consider how long you plan to stay in the home. If you move within
three years, you will have to pay back the tax credit. Realistically, given the
cost, hassle and potential for home-price gyrations, you should plan to own the
home five years or more.