New Mobile Search of the MLS

I'm excited to announce that our company has partnered with Smarter Agent, the nation’s leader in mobile real estate technology, to provide mobile search capability to ALL of our clients! 

CENTURY 21 advantage Gold's custom mobile App allows consumers to search homes for sale anytime, anywhere - right from their cell phone! The App works on standard cell phones and smartphones across all mobile carriers. The public can download the app to their phone to view all homes for sale in Southeast Pennsylvania, South Jersye and Delaware - the region covered by Trend MLS. 

Now consumers will have easier access to property information no matter where they are or what they're doing, including rentals, and properties sorted by location using the GPS features of your phone. Whether driving, or walking around looking at properties, consumers have access to all of the MLS information on the homes for sale around you, with just one touch of a button on your cell phone.   Hit “Call to See” and you will be put right in touch with our call center where you can get even more information to assist you in your home search.

The App is free and easy to obtain.  Just text C21AG to 87778, and the application will be sent to your phone by text message.  Just click on it and the application downloads right away.

With all of us relying on our phones more and more for valuable information, I know our consumers will love this great new way to look for homes.  So don’t delay – start searching for your dream home TODAY!

Home Inventory Dwindles Into The New Year

Existing Home Sales jumped another 6 percent in November, the report's third month of improvement since bottoming in July.
According to the National Association of REALTORS®, a quarter-million more existing homes were sold during the annual period ending in November as compared to October.  An "existing home" is a home that cannot be considered new construction.
Additionally, the national housing supply dropped by a full month. At the current pace of existing home sales, the complete stock of homes for sale will be exhausted in 9.5 months.
November's strong housing data is yet another signal to buyers in Palmyra that the housing market's foundation has been rebuilt, and that a rebound is imminent.  It's helped that there are great "deals" on which for buyers to pounce.
In November, short sales and foreclosures accounted for one-third of all existing homes sold, and carried an average price discount of 10 percent and 15 percent, respectively, as compared to non-distressed sales.
Repeat buyers continue to power the market, too, representing more than half of all home buyers.

• First-time buyers : 32% of all buyers
• Investors : 19% of all buyers
• Repeat buyers : 51% of all buyers

This breakdown suggests that housing has regained its footing. First-time buyers can't support a market long-term like repeat buyers can and, as compared to 12 months ago, the percentage of repeat buyers is now up 14 points.
Home buyers take note. Raw sales volume is rising and available inventory is dropping. Basic supply-and-demand tells us that this will lead home prices higher. Furthermore, mortgage rates are rising quickly, increasing the cost of homeownership.
If buying a home is a part of your plan for 2011, consider accelerating your purchase time frame. Existing homes account for more than 80% of homes sold nationwide. If the market keeps improving like this, your home affordability will worsen.

Relocate America's Top 100 Places To Live (2010 Edition)

Relocate America recently released its 2010 list of Top 100 Places To Live In America. The rankings are topped by some cities you may expect, and some you may not.
According to Relocate America, the rankings highlight communities "moving in the right direction", defined as having a combination of strong leadership, job opportunities, improving real estate markets, recreational options and a good quality of life.
It's not a bad formula and topping the list of Top 100 Places To Live In America is Huntsville, Alabama.  Huntsville was chosen for its low levels of unemployment, stable housing stock, and low cost of living.  Last year, Huntsville placed fifth on the Relocate America list.
The Top 10 cities in which to live, as selected by Relocate America are:

1. Huntsville, AL
2. Washington, DC
3. Austin, TX
4. San Diego, CA
5. San Antonio, TX
6. Tulsa, OK
7. Charlotte, NC
8. Raleigh, NC
9. Boulder, CO
10. Minneapolis, MN

View the complete Top 100 Places To Live In America 2010 list at the Relocate America website.

Housing Starts Data Hints That Housing Will Expand Even After The Tax Credit Expires

As a real estate broker whose company's largest concentration is on the existing housing market in Philadelphia and South New Jersey, I only pay a little attentionb to the new housing market. Especially since that market has really been in more of a clean up than expansion mode for the past several years. After all, the existing inventory needs to shrink before we worry about about creating new inventory doesn;t it? It seems that there are indicators that the inventory has been shrinking and that the market has been changing. After a strong March showing and a surprise upward-revision for February, Housing Starts are, once again, trending better.

It's a significant signal that the housing markets in Philadelphia, Mount Holly and nationwide are stabilized.
A Housing Start is a new home on which construction has started and, over the last 6 months, home builders are averaging one half-million starts per month.
This marks the highest 6-month average since 2008 and a reading one-fifth percent better from 12 months ago.  Revisions to prior data have all been higher, too.
Even more interesting, though, is that the number of newly-issued building permits is exploding. Permits were up more than 5 percent last month and have climbed back to the levels of late-2008.
Housing permits are an important data point in housing because permits are precursors to actual housing starts.  According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance.
Therefore, because March's housing permits increased, we should expect Housing Starts to continue to rise into the early months of summer.
This, too, reflects well on housing because the federal home buyer tax credit won't be in existence this summer. The simple fact the homes are being built now shows that housing is likely to expand even now that the tax credit expires. And, as you may have noticed in my other posts, I sort of think that's happening as well.

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What Happens After the Tax Credit is gone?

Image by reeltor99 via Flickr

With less than a week to go before the tax credit is over, I've been thinking about what the real estate market in Philadelphia will look like for the rest of the year. I was thinking specifically about the real estate market here, because real estate is too local for me to have a sense of what the national scene will look like in May and after.

The tax credit has certainly sped up the market so far this year. All of our offices have outpaced their production for the same period last year (when we were ranked as the number Century 21 company in our area, and number 3 for the state), so its obvious that the tax credit has had some impact. The question is whether is has driven the market or enhanced the market, and my opinion leans towards enhancement. Investors seem to have re-entered our market, and that (to me) is a sing that they percieve value in our real estate. Though activity is speeding up as we near the deadline, my sense is that the market will slow but not stall after the tax credit, because all of the basic reasons to buy a home are in place.

1. Prices are stable and gaining ground. According to Trend MLS, in the first qiarter of this year, closed transactions were up almost 10% (9.6% actually) and the average sale price actually increased over the same period in 2009.
2. Interest rates remain historically low - I don't think I really have to explain this one. Articles speak about rates going up from 5 to 6% as if that were a lot. People wouldn't be happy unless the bank paid them, but frankly, anything under 9% has always been really indicative of inexpensive money.
3. The financial benefits of home ownership are undeniable in the current market. In a recent article, the New York Times once again published its rent vs. buying calculator, and in our market, with no appreciation and no rental increases, a home buyer still makes out better after only 5 years of home ownership - and any prudent landlord would certainly increase the rent at least a few percent over 5 years!

With all of that going for us, it would seem that we have reason to believe that there will be reasonable activity for the rest of the spring market. Certainly if more jobs are created, and we avoid any major economic body blows, it would seem that we might be headed towards the recovery we have heard so much about.

Home Resales Boom Into The End Of The Tax Credit; Home Values Seen Rising.

Existing Home Sales rose in March, as expected. U.S. home buyers closed on 7 percent more homes as compared to February.

Furthermore, versus March 2009 -- a month many people equate to the low point of the U.S. economy -- sales volume was up 16 percent.

"Existing home sale" is the technical term for a home resale; a home previously inhabited by a person. It's the opposite of a "new home sale" which is a sale of a newly-constructed home.

Existing Homes Data is tracked by the National Association of Realtors® and a closer look at the March data reveals some other interesting notes:

1. Year-over-year sales are higher for the 9th straight month
2. Real estate investors represented 19 percent of all homes purchased
3. First-time home buyers account for 44 percent of all buyers

Also worth noting is that the supply of available homes is down on a broader basis. At the current rate of sales, the existing home inventory will be exhausted in 8 months.

Despite banks releasing foreclosures and REO into the Palmyra market, that's still one half-month less from February.

When supplies drops, home prices tend to rise. It suggests an underlying strength in housing that should support home prices through the next few months -- especially as the home buyer tax credit finishes working its way through the system.

That said, real estate markets are local. You shouldn't assume that what's happening on the national level is also happening here at home. Be sure to check with your real estate agent about local market conditions before making a decision to buy or sell.

CNNMoney.com Predicts The Best And Worst Real Estate Markets For 2010

CNNMoney.com recently published its 2010 forecast and projections for home prices in the country's largest metro markets.

Listed as "Top 25" and also comprehensively by state, CNNMoney.com's home price forecasts puts Santa Rosa, California at the top of 2010's home appreciation list and Hanford, California at its bottom.

The 10 cities projected for highest home appreciation in 2010 are:

1. Santa Rosa, CA : +6.0%
2. Cheyenne, WY : +4.7%
3. Kennewick, WA : +4.6%
4. Merced, CA : +4.4%
5. Bremerton, WA : +4.2%
6. Fairbanks, AK : +4.2%
7. Corvallis, OR : +4.1%
8. Tacoma, WA : +3.9%
9. Anchorage, AK : +3.8%
10. Bend, OR : +3.3%

The Pacific Northwest is the region most heavily-represented among price gainers. The Southeast and Middle Atlantic are most represented on the under-perform list.

However, just because a city's homes are expected to appreciate (or depreciate) in 2010, that doesn't mean that every home within its limits will follow suit. Real estate cannot be grouped on a city level like CNNMoney.com tries to. There will always be areas in demand within city limits in which prices rise, just as there will be out-of-demand areas in which prices fall.

Real estate data can't be grouped by city or even by ZIP code, really.

Real estate in Mount Holly is more local than that.

When we say "real estate is local", it means that every street in every town has a distinct set of traits that drives its home values. Homes that are one block closer to the train; or, homes that are facing north; or, homes that are made of brick. Each of these characteristics can affect a home's desirability which, in turn, can affects its sales price.

National surveys can't capture "essence" like this. They only report on the aggregate.

For local real estate data, look to established, publicly available websites and to active, local real estate agents. Both will have data and insight that can help you. National surveys often make for good headlines, but do little to help homebuyers find good value.

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How To Properly Screen A Prospective Tenant

According to the the National Association of Realtors®, "distressed homes" represented nearly 2 of every fifth home sold in January 2010. Clearly, real estate investors in Mount Holly and around the country are taking advantage of good deals on cheap property. But there's risk involved.

This NBC Today Show interview first ran in March 2009, featuring real estate expert Barbara Corcoran. Despite its age, the message remains relevant. Today may be a terrific time to buy a bank-owned home -- just make sure you do your research first. There's plenty of ways for investors to get burned.

Some of the tips in the video include:

• Buy in your own backyard
• Start small, then build to a bigger portfolio
• Watch receipts -- rent rolls don't matter if tenants aren't paying rent

Corcoran also gives pointers on how to evaluate a prospective tenant.

Foreclosures should represent a large number of 2010's total home sales and will offer interesting opportunities to bona fide real estate investors. Before you jump in, make sure to watch the video. The rents you save may be your own.

Remember, the stats and the data are from 12 months ago, but the advice stays meaningful. Real Estate investing, when you apply sound principles is still a great way to build income and acquire wealth. You just have to take time and investigate it completely.

Foreclosures Per Capita | February 2010

According to foreclosure-tracking firm RealtyTrac, foreclosure filings topped 300,000 for the 12th straight month last month as 1 in every 418 U.S. homes received a foreclosure filing.

It's a small improvement from January and a just 6 percent increase over February 2009.

On a per-capita basis, foreclosure density varied by state:

• Nevada : 1 foreclosure filing per 102 homes
• Florida : 1 foreclosure filing per 163 homes
• Arizona : 1 foreclosure filing per 163 homes
• California : 1 foreclosure filing per 195 homes

Also, as in January 2010, foreclosures across the country were concentrated. 10 states beat the national Foreclosure Per Capita average; 40 states fell below. Like everything else is real estate, it seems, foreclosures are local.

For today's Palmyra home buyers, foreclosures represent an interesting opportunity.

Homes bought in various stages of foreclosure are often less expensive than other, non-foreclosure homes. It's one reason why distressed home sales account for 38 percent of all resales. However, less expensive doesn't always mean less costly. A foreclosed home may be in various stages of disrepair and they're often sold as-is, as policy.

Buying new or used in Philadelphia or surrounding counties can be cheaper than buying broken-down. Buying foreclosures is attractive, and I've been selling bank owned properties since 1988, but you can create a problem for yourself if you chase the "deal" instead of looking for the house that suits your needs.

Therefore, if you're in the market for a bank-owned home, make sure you know what you're buying before you sign a contract. Have qualified professionals review and inspect the property, as needed. Damage to pipes or the property's structure, for example, may not be so obvious on a walk-though and you'll want to know about it before you buy. If you want to look at foreclosure properties, just visit our website.

Also, foreclosed homes are federal tax credit-eligible. Buyers must be under contract by April 30, 2010 and closed by June 30, 2010.

The True Picture: Half of all Foreclosure Issues in Only Four States

Foreclosures stories dominate the national housing news. It seems at least one foreclosure-related story makes its way to the front page or the nightly news every week.

But for as much as the foreclosure filing statistics can be astounding -- over 300,000 homes were served last month alone -- the prevalence of foreclosures depends on where you live.

As reported by RealtyTrac, just 4 states accounted for more than half of the country's foreclosure-related activity last month.

• California : 22.7 percent of all activity


• Florida : 14.9 percent of all activity


• Arizona : 6.7 percent of all activity


• Illinois : 5.7 percent of all activity

The other 46 states (and Washington D.C.) claimed the remaining 49.9%.

However, just because foreclosures are concentrated geographically, that doesn't make them less important to homebuyers in Philadelphia, Palmyra and around the country. There's been more than 1.4 million foreclosure filings in the last 12 months and that's a figure that can't be ignored.

Distressed properties now play a role in one-third of all home resales.

Therefore, if you're in the market for a foreclosed home, here's a few things to keep in mind.

1. Properties are usually sold "as-is" and may not be up to living standards. Be sure to physically inspect the home before buying it.


2. Buying a home from a bank is rarely as streamlined as buying from an individual homeowner. Be prepared for delays and long closings.


3. Foreclosures aren't always listed for sale publicly. Ask your real estate agent how to access the complete foreclosure inventory.

In order to use the federal homebuyer tax credit, you must be under contract for a home by April 30, 2010 and closed by June 30, 2010. That doesn't leave much time to find a bank-owned home and make it to closing. In Philadelphia we also face specific issues regarding the time needed for settlement because the deed obtained from the foreclosure sale often takes a longer time to record than in other counties. So if you're serious about buying foreclosures, it's probably best to start your search soon.

Pending Home Sales Predicts A Stronger Spring Market

After the snow storm this weekend, its hard to think about the spring market, but that is what we're entering, and the condition of the market is of interest to potential home buyers and sellers in Philadelphia and Surrounding areas. One of the indicators is the Pending Home Sales Index which rose slightly in December, climbing 1 percent from November.

A Pending Home Sale is a home that is under contract to sell, but not yet sold. It's a figure compiled by the National Association of Realtors® using sales data from over 100 regional listing services and more than 60 large brokerages around the country.

Because each pending sale is a true measure of sales activity, the Pending Home Sales Index is purported to be the most reliable forward-looking indicator for housing.

Recent data supports this hypothesis.

After Pending Home Sales plunged 16 percent in November, Existing Home Sales fell by 17 percent in December. Based on the most recent Pending Sales Index, therefore, we can expect January's closed sales to be similarly level.

For home buyers in Philadelphia and Palmyra , this is all a bit of good news. Home prices are based on the supply-and-demand balance that exists between buyers and sellers. When buyers outnumber sellers, like they did through most of 2009, home supplies dip and, in fact, the national home inventory nearly halved during the 12 months ending November 2009.

With fewer homes for sale, multiple-offer situations were almost commonplace and home values rose as result.

Activity has since slowed, however, and fewer buyers are in today's market. The supply-and-demand equation has shifted back some. In December, home supplies rose for the first time in 7 months and January will likely show the same.

The net result: Home buyers have more homes from which to choose and that can create negotiation leverage for better prices and better concessions. As people begin to take advantage of the remaining time for the home buyer tax credit though, we have been seeing activity start to increase in our offices.

With mortgage rates still low and a looming deadline on the homebuyer's tax credit, market activity should be strong between now and April. Take your time and bid right. And when you're ready, be ready. The best deals likely won't last.

Home Buyers Get A Green Light : Pending Home Sales Plunge In November

Just one month after touching a 3-year high, the National Association of Realtors® Pending Home Sales index plunged in November. A "pending" home sale is a home that is under contract to sell, but has yet to close.

The 16 percent drop marks the first retreat in Pending Home Sales since January of last year.

The weak Pending Home Sales data is an indication that Existing Home Sales data will be soft this month. This is because, historically, 80 percent of Pending Home Sales convert to "closed sales" within 60 days, and most of the rest close within 120.

Even with Pending Home Sales down, the Philadelphia housing market should not lose much of its momentum. For today's home buyers, this "lack of slack" can represent both a concern and a terrific opportunity. Though the weather keeps some buyers inside, the tax credit provides a real incentive to get out and participate in the market. Acting now allows you to get a financial benefit and to deal with sellers who have possibly held their homes into the winter.

Home prices are a function of supply and demand; of buyers and sellers. When buyers outnumber sellers, competition leads to bidding wars, ultimately, and higher home prices overall. The imbalance can also create a sense of urgency that results in over-paying for a home.

When buyers are sparse, on the other hand, the psychology of real estate shifts.

Home sellers are keenly aware of foot traffic and requests for second and third showings. Without buyers, their homes can't sell. They also note a lack of general feedback from the market.

It's at this point that seller fear can creep in and it becomes a buyer's best time to buy.

Based on November's Pending Home Sales data, it's clear that home sellers are in abundance right now. Home buyers have leverage.

It may not last.

With mortgage rates easing lower this week, the federal home buyer tax credit still in effect, and the Holiday Season officially over, buyers are getting back to business in Mount Holly and everywhere.

Plus, with the tax credit deadline of April 30, 2010 fast approaching, buyer activity should increase over the next 4-6 weeks.

The market looks ripe for a buy but don't rush it. Take your time and bid right. But when you're ready, be ready -- once the market momentum shifts back to sellers, you might lose all that leverage you built up through the winter.

RealtyTrac's 2009 Foreclosure Report Gives Reason For Optimism

Like real estate, it appears that foreclosure activity is a local phenomenon, too.

As reported by RealtyTrac.com, more than half of all foreclosure-related activity in 2009 came from just 4 states:

1. California
2. Florida
3. Arizona
4. Illinois

More than 1.4 million filings made in 2009 are attributed to the above states. Furthermore, each ranks in the Top 10 for 2009 Foreclosures Per Capita.

The other states are Nevada, Utah, Georgia, Idaho, Michigan and Colorado.

Versus 2008, foreclosures are up 21 percent nationwide and that's a big number, but a deeper look at RealtyTrac's annual reports reveals a more positive undertone on the housing market.

1. 40 states fell below the national Foreclosures Per Capita average in 2009
2. Foreclosure activity fell on an annual basis in 10 states as compared to 2008

Foreclosures are still prevalent, though, and buying homes in foreclosure in Philadelphia continues to be big business. Having been active in selling foreclosures for over 22 years, our firm sees this activity on a day to day basis in the inquiries from the Lender's web sites sending buyers to us. First-time buyers, move-up buyers, and real estate investors each are bidding aggressively.

Distressed homes account for one-third of home resale activity, according to an industry trade group.

That said, buying foreclosures can be tricky.

First, properties are often sold "as-is" and the cost of repairs may unwind the home's status as a "value buy". Furthermore, a lender may require specific fixes to be made prior to closing and that, too, costs money.

Second, buying a foreclosed home in Pennsylvania isn't as streamlined as buying a "normal" home. Closing on a foreclosure can be a longer process if the sherriff deed is not yet recorded, though many foreclosures can settle much faster. But you need to know the time frame since a 4-month time-frame may not fit your schedule.

And, third, finding foreclosures can be difficult. Despite the growth in foreclosure search engines, it still takes a good real estate agent to uncover the best homes at the best prices. Luckily, being such a vendor, we can make it a little easier. You should still concentrate on finding the best house for you, even if its not a foreclosure.

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

There's still good deals in the foreclosure market -- you just have to know where to find them

Moving To A New City? Check The Local Cost Of Living First.

It's not only the real estate markets that differ from town to town -- the Cost of Living does, too.

Insurance costs, tax bills and just plain, day-to-day living will dent a household budget differently depending on where that household is. It can be a nerve-wracking fact for families moving from New jJersey across state borders.

As an aid for the budget-aware, Bankrate.com keeps a Cost of Living Comparison Calculator on its website. The calculator asks 3 questions: (1) Where do you live now, (2) To where you are moving, and (3) What is your salary. It then spits out a detailed, 58-item cost comparison list between the two cities.

Some of the key costs compared include:

• Everyday groceries
• Energy bills
• Routine healthcare
• Home ownership
• Clothes
• Sporting goods

The Cost of Living Comparison Calculator is thorough, with data culled from the ACCRA. You'll be surprised at how granular the list can get. On the ACCRA website, you can buy a similar report for $5.

On the Bankrate.com site, the data is free.

Home Buyer Tax Credit is Extended and Expanded!

Image via Wikipedia

In my last market statistics post , I mentioned that an extension of the $8,000 first time home buyer tax credit would be a real incentive for people to continue buying even in this traditionally slow time of year.

Congress must have been paying attention (or I tripped on something that other people agreed with!) and the $8,000 Tax Credit was extended this week. In addition, people who have owned their homes for 5 consecutive years (out of the last 8 years) can now get a $6,500 tax credit when they buy a new home.

With the threat of higher rates in the first quarter of 2010, and affordable houses all over the Philadelphia marketplace (which includes South New Jersey and the surrounding counties) , now may be that perfect moment - if people don't get too complacent about the housing market and assume that they'll still be able to reap the maximum benefits from the convergence of rate, price, and tax credits. I guess the only way to find out what the public's reaction will be is to wait and see -

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Philadelphia and Surrounding Counties Market Statistics

Image by reeltor99 via Flickr

As Congress discusses a 6 month Extension of the First Time Home buyer Tax Credit with an additional credit for repeat home buyers, the results of the initial credit seem to be obvious when we look at the Pending Sales Market statistics from September for Philadelphia and surrounding counties.

Pending Home Sales	Sept 2009	Sept 2008	% Change
Philadelphia	1287	941	36.77%
Bucks	582	414	40.58%
Montgomery	739	571	29.42%
Delaware	526	366	43.72%
Chester	492	354	38.98%

With such substantial increases in the pending sales for all five counties, its obvious that our housing market has recovered substantially. Though its tough to know exactly how much the tax credit influenced this, logic tells us that it has had a substantial impact. When we add to this the decrease in inventory, we see what would be defined as a recovering real estate market.

Current Home Inventory	Sept 2009	Sept 2008	% Change
Philadelphia	9,704	10,559	-8.10%
Bucks	4,011	4,262	-5.89%
Montgomery	5,276	5,718	-7.73%
Delaware	3,542	3,697	-4.19%
Chester	3,924	3,997	-1.83%

So what does this mean for the next 6 months?

• With a tax credit extension, motivation for first time home buyers will continue
• A tax credit for repeat buyers will increase motivation for a new group of buyers
• Shrinking inventory generally means competition between buyers for more desirable homes and possible upward pressure on prices.
• Though the tax credits are significant, the 6 month window is still a limited window off opportunity.
  
• The limited opportunity provides substantial additional motivation for buying even at a time of the year which is traditionally slower because of the retail market.

So though there is still uncertainty about the unemployment numbers, and we have not seen a great resurgence in consumer confidence yet, it does seem that in the house buying arena, there are substantial reasons for potential home buyers to get off the fence and take action now to benefit from the combination of affordable prices, low mortgage rates, and tax benefits that may not be extended again in the more active spring market.

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Can You Still Catch the Buyer's Market?

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.

Happy Day! Phillies Win & The Senate Moves Towards a Tax Credit Extension

Image by reeltor99 via Flickr

Its hard to decide what to write about this morning. Last night the Phillies faced the Yankees in the World Series for the first time since 1950 (when the Whiz Kids took on the New York Team) and they won - even though the game was in New York. That's really exciting for a city where sports are such an important part of our history and our culture, not to mention that it was an auspicious start for a historic series, the first World Series repeat in the team's history.

If that weren't enough, there was news yesterday that the Senate had reached agreement on extending the $8,000 first time homebuyer's credit until June of 2010 - with a potential $6500 tax credit for people that had bought and owned homes for 5 years or more. In our city, where prices are moderate, first time home buyers are a major part of the real estate market, and those amounts are significant to home buyers that news is incredibly good.

We have already seen the real estate market improve every quarter of this year to date, stimulated by the tax credit, great mortgage rates, and moderate prices. Though the lack of mortgage liquidity negatively impacted the attempts of some buyers to gain entry to home ownership, on the whole , the true worry was whether the gains in the market would be sustainable - with the extension of the tax credit through the spring, that question would be answered.

Now the next question for buyers is whether they will be smart enough to act early and avoid the inevitable upward pressure on price that such activity should create, and whether the mortgage market will increase credit liquidity amid the signs of economic recovery.

Of course for this week in Philadelphia,more people may be worrying about whether the Phillies can sustain their early lead this evening in New York, and then Saturday and Sunday night when they return to Philadelphia ;-)

Everybody Thinks the Real Estate Market has Recovered

Image by reeltor99 via Flickr

Well maybe not everybody, and maybe not quite recovered yet, However a consensus of several major real estate groups says that 2010 is the time for the expansion of the real estate market. According to several studies, the market of 2009 will mark the end of the real estate "contraction" and next year will mark an expected increase of almost 10% with a projected total of 5.403 million units closed in 2010 compared to an estimated 4.929 million units registered in 2009.

The compilation of housing forecasts released was released earlier this week on Real Estate Economy Watch.com. The Web site , operated by former NAR economist David Lereah presented the September housing forecasts of the National Association of Realtors, the National Association of Homebuilders, the Mortgage Bankers Association, Fannie Mae and Freddie Mac and then calculated the consensus (mean) prediction for each major housing measure for the group as a whole.

Of course the impact of foreclosures on the market, and the renewed activity of investors and home buyers looking to take advantage of the well priced inventory, combined with the $8,000 tax credit have positively impacted the market this year. Local tracking indicates that each quarter this year so far has seen increases in sales activity. However the tax credit is currently due to end in November, and if it is not extended, the impact on the marketplace will have to be seen to be judged.

The article goes on to say "At present, the housing sector is experiencing a recovery in home sales and housing starts. Both measures are meaningfully above their January cyclical lows. Home price movements are also improving. Home price declines on a year over year basis have decelerated in monthly reporting, while home prices have increased in recent months on a monthly basis." In our local market area, where prices were not reduced as drastically as some parts of the country, this impact is good news for homeowners and a caution for home buyers that want to take advantage of the current combination of low rates and attractive prices.

In the meantime, as things seem to get brighter, we can't forget that miracles do sometimes happen. After all the Phillies are in the World Series for the 2nd year in a row!

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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.