Real Estate
As is my custom - I was listening to Good Morning America as I let the dogs out, make the coffee and get started on waking up. But this morning - I was delightfully jolted out of my early morning haze by Liz Ann Sonders, Chief Investment Strategist at Charles Schwabb, who proclaimed that the recession had ended. What is even better is that she was agreeing with Barry Knapp, of Barclay's Capital, who recently announced that the recession may have ended last month in April. Knapp actually said the economy appears "to be in the sweet spot of a recovery".
One of the indicators pointing to a recovery is unemployment. Unemployment is a lagging indicator of the economy - meaning unemployment may not improve for several months and you can expect that unemployment will peak by year end. Historically employment figures don't seem recover until six months after the end of a recession. However, Sonders indicated that layoffs are slowing down and the unemployment claims are starting to edge lower.
Another indicator pointing to a economic recovery is the housing market. One of the leading indicators of how the housing marketing is faring is the inventory level - the number of homes on the market. According to Pat Lashinsky of Zip Realty, "Inventory levels are actually declining and median home prices of homes available for sale have actually gone up." When the number of homes on the market goes down - prices rise and the market improves. "The fact that inventory is declining is suggesting that soon we may see home prices begin to stabilize. In some markets, it may begin to turn upward. But the downturn in the housing that we've had for the last three years may be coming to an end," said Lawrence Yun, the chief economist for the National Association of Realtors. "Buyers are a lot more engaged," Yun said. "There's an excitement and a passion that hasn't been seen in the last 18 months right now."
These statistics are for the national markets and it will be interesting to see what our metro Atlanta numbers will be. It will be a week or two before our April numbers our out but even our
March numbers showed improvement. NAR's numbers for the national market showed improvement in march as well -
here they are.
Interest rates remain low! As of today - conforming loans (under $417k) remain at 4.375%. FHA rates remain at 4.5%. And jumbo rates for qualified buyers remain as low as 5.5% with equity and excellent credit.
I ran some numbers to see what kind of savings you would have with these low rates. WOW - over the life of the loan you can save tens of thousands of dollars. On a loan amount of $200,000 - the monthly mortgage payments on a 30 year fixed (does not include taxes, insurance) are:
| Interest Rate |
|
Monthly Payment |
|
Monthly Savings compared to $998.57 |
| 4.375% |
|
$998.57 |
|
not applicable |
| 5.375% |
|
$1,119.84 |
|
$121.27 |
| 6.375% |
|
$1,247.75 |
|
$249.18 |
Aside from the monthly savings - an interest rate of 4.375% vs. 5.375% could save you $43,693.91 over the life of the loan. And an interest rate of 4.375% vs. 6.375% could save you $89,700.94. WOW.
According to the latest report by National Association of Realtors®, pending homes sales rose based on contracts signed in March 2009. NAR's
Pending Home Sales Index showed March 2009 contracts rose 3.2% from February's level of 82. This index is a forward-looking index based on contracts signed not closed sales and is based on the national market. Additionally March 2009's 84.6% was 1% increased from a year ago's March 2008 index of 83.7%.
Lawrence Yun, NAR'S chief economist, stated "This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a down payment," he says. "We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around."
Here is a breakdown of pending home sales by region:
- South: rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago.
- West: increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008.
- Northeast: fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago.
- Midwest: slipped 1 percent to 82.3 but is 8.2 percent higher than March 2008.
FMLS Stats for the Month of March 2009.
Per Steve Palm who provides the Smart Numbers from FMLS, sees a "moderate trend for a number of single family housing statistics that still point to positive results for June or July (2009)." He also states that "while March 2009 numbers were down from the previous year - March 2008, March 2009 is up over February 2009 by the greatest percentage since Feb - March 2006." It is important to realize this increase is not based on number of units sold but percentages.
This news is great for the single Family market but we will probably wait a bit longer for the good news about the condo market in most markets. However there was an increase in number of units sold - 64 in Feb 2009 and 99 in March 2009. We also see an increase in the number of units sold in single family houses in areas 21,23 & 24 - 65 sold in Feb 2009 and 88 sold in March 2009. Key to FMLS areas is
here. February 2009 numbers are
here.
Condos/Townhomes
| Area |
# of Sales |
Total Sales Volume |
Avg Sale Price |
Average Original List Price |
Sales Price to Final List Price |
Average Total Days on the Market |
| 21 |
30 |
$24,370,360 |
$ 816,345 |
$ 923,287 |
91.1% |
97.4 |
| 23 |
27 |
$10,545,500 |
$ 390,574 |
$ 410,309 |
95.5% |
66.2 |
| 24 |
31 |
$5,805,575 |
$ 187,277 |
$ 196,164 |
95.5% |
51.3 |
| 31 |
142 |
$6,767,951 |
$ 47,662 |
$ 67,282 |
90.7% |
105.5 |
| 32 |
77 |
$8,255,772 |
$ 107,218 |
$ 128,196 |
92.1% |
87.7 |
| 52 |
106 |
$24,418,719 |
$ 230,365 |
$ 544,356 |
92.6% |
97 |
| TOTALS |
413 |
$80,163,877 |
|
|
|
|
Note - in Area 52 - the average original list price of $544,356 looks like a typo to me or an error in the list price when the property was first listed.
Areas 31 & 32 are areas with high numbers of foreclosures rates - particular area 31. It is great to see the foreclosures being absorbed.
| Area |
# of Sales |
Total Sales Volume |
Avg Sale Price |
Average Original List Price |
Sales Price to Final List Price |
Average Total Days on the Market |
| 21 |
56 |
$ 14,010,638 |
$ 250,190 |
$ 286,601 |
91.7% |
122.2 |
| 23 |
40 |
$ 7,601,054 |
$ 190,026 |
$ 225,689 |
88.2% |
113.8 |
| 24 |
3 |
$ 714,900 |
$ 238,300 |
$ 259,900 |
97.3% |
109.7 |
| TOTALS |
99 |
$ 22,326,592 |
|
|
|
|
Single Family Homes
FMLS stats for the month of February 2009
Condos/Townhomes:
| Area |
# of Sales |
Total Sales Volume |
Avg Sale Price |
Average Original List Price |
Sales Price to Final List Price |
Average Total Days on the Market* |
| 21 |
33 |
$ 7,968,790 |
$ 241,477 |
$ 292,145 |
91.90% |
148.5 |
| 23 |
26 |
$ 5,381,980 |
$ 206,996 |
$ 232,762 |
93.70% |
144.5 |
| 24 |
5 |
$ 1,270,000 |
$ 254,000 |
$ 297,634 |
96.80% |
111.6 |
| TOTALS |
64 |
$ 14,620,770 |
|
|
|
|
Single Family Homes
| Area |
# of Sales |
Total Sales Volume |
Avg Sale Price |
Average Original List Price |
Sales Price to Final List Price |
Average Total Days on the Market* |
| 21 |
20 |
$11,614,500 |
$ 580,725 |
$ 659,175 |
93.3% |
151.7 |
| 23 |
18 |
$9,411,900 |
$ 522,883 |
$ 570,477 |
94.7% |
131 |
| 24 |
27 |
$5,068,041 |
$ 187,705 |
$ 211,952 |
94.0% |
110.5 |
| TOTALS |
65 |
$26,094,441 |
|
|
|
|
Click here for FMLS Area descriptions
In both the condo/townhome & home markets - there is still a large difference in the average original list price for the area and the average sale price. Listings continue to be priced higher than the market. Requiring sellers to reduce their list price during the course of marketing and then still negotiating on price to sell.
FMLS Area Codes for Intown
| FMLS Area |
Neighborhoods |
| 21 |
Buckhead neighborhoods including Chastain Park |
| 23 |
Midtown, Morningside, Virginia Highland, Inman Park, Piedmont Heights |
| 24 |
Druid Hills, Candler Park, Lake Claire, Kirkwood, Edgewood, East Atlanta, East Lake, Oakhurst |
| 31 |
Capitol View Manor, Sylvan Hills, College Park, Adair Park, West End, Jefferson Park |
| 32 |
Grant Park, Ormewood Park, Glenwood Park |
| 52 |
Decatur, Clairemont, Toco Hills, Oakhurst, East Lake, Kirkwood |
If you don't see your neighborhood ~ let me know. Some neighborhoods may appear in 2 different areas.
FHA loans have been around since 1934 but in previous years we haven't needed them with all of the other financing options available. With the recent tightening of credit terms, FHA loans are back and can be a great option for buyers who might not otherwise be able to purchase a home. FHA stands for Federal Housing Administration. FHA doesn't actually lend the money but insures the loan for your lender. There are caps on the amount of an FHA loan and it is based on the lending area.
In Metro Atlanta - the loan limit is $346,250. The loan limit does change from time to time and it can be higher in more expensive markets and less in lower priced markets. As of today - the FHA rate was VERY competitive - 4.5% for a year 30 year fixed compared to 4.375% for a non-FHA loan.
Advantages of FHA loans:
- Down payment as little as 3.5% of the sales price. Most conforming loan programs require a minimum of 5% down.
- Lower credit scores for buyers. 600 minimum
- Easy qualifying guidelines. Gift/Grant funds may be allowed for down payments.
- Non-occupying co-borrowers allowed. Perfect for a buyer just starting out in the job market and who may not yet have established credit. A parent can co-sign the loan and not have to live in the property!
- Seller Contributions can be up to 6% of the sales price. Helps a buyer who is short on cash as a seller can contribute towards closing costs & pre-paids (interest, property taxes) also called escrows.
- Has a fixer- up loan program. Great option for some of the homes presently on the market.
- You may even be able to include energy improvements into an FHA-Efficient Mortgage
FHA loans aren't for everyone but a great opportunity for many buyers.
FHA website has more information for you or
contact me and we'll find a lender who will help you decide which loan program is best for you.
Interest rates today:
4.5% for an FHA Loan (up to $346,250 loan amounts in Georgia)
4.375% for a 30 year fixed - conforming loan (loan is less than $417k)
5.5% for Jumbo loans (more than $417k) - excellent credit scores & buyer adding equity into the deal
These rates are according to Suntrust Mortgage and are good for aquisition loans as well as refinancing and as always there will be underwriting conditions that will need to be met - such as credit scores, income & debt amounts. It is a great time to buy with these amazing rates and a great supply of inventory on the market.
If you are interested in more information and details -
contact me.
Top Economists Say Recovery Has Begun
Economic recovery is about making people feel more confident, says Mark Zandi, chief economist of Moody's Economy.com.
Zandi evidenced increasing home sales and gains in the stock market are some promising signs that the worst is over and people will start spending again.
"We're starting to see some pent-up demand for goods," he says.
But Zandi warns that the situation is still fragile. "Confidence is a very fickle thing. It can go from abject pessimism that pervades now to a more balanced view of the world rather quickly."
Robert Brusca of FAO Economics is predicting strong growth in the last half of the year and a quick recovery for the labor market. "You've lost 5 million jobs. It shouldn't be hard to put 2.5 million jobs back on rather quickly after you hit bottom," he said.
Joseph Carson, chief economist at AllianceBernstein, calls improving home sales, a rising stock market, and better-than-expected retail sales in February and March good signs of a turnaround. By the time President Obama's stimulus package takes effect, the economy will be ready, he says.
"The stimulus has a much better chance of working if trends are already turning up than if it needs to halt a decline," he said.
Source: CNNMoney, Chris Isidore (04/06/2009)
Take some time this spring and wash your windows - inside and out. You will be amazed at what a difference it makes in your home. If you have windows that are hard to reach - consider hiring someone reputable to do the task for you. If you live in a condo or a townhouse - see if you can get a discount for having the entire building done.
If you are selling your house - this really does make a difference when you are on the market. You will be amazed at how much brighter and lighter your rooms will feel. Buyers all want - light and bright. I have
never had a buyer who asked me to find something darker with less natural light. An added benefit is that prosepective buyers will see how clean and well loved your home is. Set your self apart from the competition with the details.
Earth-friendly window cleaners:
Seventh Generation - Cleans without harsh chemicals, is biodegradable and no streaks.
Method - non-toxic cleaner offering you streak-free glass with one of my favorite smells - Mint. I might have to try this one just for the smell!
If you prefer not to have a separate cleaner for your glass - try vinegar and water. vinegar is a great grime fighter and a product I use frequently in cleaning. Chances are you already have some distilled white vinegar on hand. Don't let the smell stop you from using it - it vanishes quickly.
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