Enewsletter - September 21, 2009
HARRY'S COLUMN
A COUPLE OF GOOD REASONS WHY YOU SHOULD BUY RIGHT NOW
First of all, the $8000 tax credit for first-time home buyers expires on November 30, 2009. This means that, if you want to take advantage of this tax credit, your mortgage must close by November 30. As you are probably aware, there are several tasks that must be accomplished before a closing can take place, including the reception of a satisfactory credit report, appraisal, improvement location certificate, insurance commitment, home inspection, verification of personal data, removal and performance of contingent obligations to the seller, fixups from the home inspection, etc.
Now, add to the mix the fact that the participants in the closing process (lender, appraiser, inspector, title company, mortgage company) will probably be overwhelmed by applications from people who wait until the last minute to apply for this tax-credit and its probable that some applications will not be completely ready to close by November 30. Don't get left out !!!
The second reason why you should act now is that FHA credit standards and fees are increasing in response to the growing number of foreclosures. This past year, FHA has increased its minimum down payment to 3.5%. In addition, there is a one-time, upfront fee of 1.75% of the total loan amount payable at closing (but this can be added to the loan) and a .55% Mortgage Insurance Premium, payable monthly for the term of the loan.
In order to eliminate underfunded lenders, upcoming FHA increases will require lenders to show a net worth of at least $1 million (up from $250,000) and even more increases may be required in the future.
FHA appraisals will be valid for no more than 4 months (down from 6-12 months, in the past).
And, there will be additional FHA changes to tighten the mortgage market.
The moral to the story is that "He who hesitates, will probably have to rent"
HOME PRICES FALL FOR FOURTH STRAIGHT MONTH BUT HOMEOWNERS ARE OPTIMISTIC
RISMEDIA, announced that 26% of homes currently on the market in the U.S. as of Sept. 1, 2009 have experienced at least one price cut. Price reduction levels have increased for the fourth straight month and have seen a 10% overall increase compared to June of this year. During the summer months of June and September, the total amount slashed from home prices has increased by more than $1.1 billion from $27.4 billion to $28.5 billion. The average discount for price-reduced homes remains at 10% off of the original price.
Luxury homes have been hit the hardest during this period, with an average 14% discounted from the original asking price.
During this time of declining home prices, it's interesting to see how homeowners see the value of their homes. Four times a year, Zillow.com conducts a survey with Harris Interactive to get a pulse on how homeowners perceive the value of their own homes and how optimistic (or not) they are about the coming six months. This quarter's results show that homeowners, for the most part, "get it" about the bad news, but just want things to get better.
Some of the survey results are:
22% think their home's value has increased
19% think their home's value has stayed the same
60% think their home's value has decreased
In reality, 83% of U.S. homes declined in value over the past year, up from 80% in the first quarter.
However, homeowners are an optimistic lot. For three quarters, respondents have predicted their homes' value would not decline any further. This quarter, the number of "optimists" was the largest yet:
34% of homeowners think their home's value will increase
47% of homeowners think their home's value will stay the same
19% of homeowners think their home's value will decrease.
The most optimistic bunch are homeowners in the South and Northeast, where fewer markets experienced a "bubble" and where home value declines haven't been as precipitous as many major cities in the West.
13TH ANNUAL SOUTHERN COLORADO ECONOMIC FORUM
The College of Business and Administration and Graduate School of Business of the University of Colorado at Colorado Springs sponsors the annual SCEF to bring together local experts from the public, private and economic sectors to report on our local economy. This year, the meeting will take place at the Antlers Hotel on October 30, 2009, from 8am to 12 noon. We can recommend this meeting as a great opportunity to learn about our local economy and about how things are changing in our community.
And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs.
Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move.
Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us.
JOKE OF THE WEEK
A mid-level executive was so frustrated at being passed over for promotion year after year, that, in frustration, he went to a brain-transplant center in the hope of raising his I.Q. 20 points.
After a battery of physical and psychological tests, the center's director told him that he was an acceptable candidate.
"That's great!" the executive said. "But I understand that this procedure can be really expensive."
"Yes, sir, it can," the director replied. "An ounce of accountant's brain for example, costs one thousand dollars; an ounce of an economist's brain costs two thousand; an ounce of a corporate president's is forty-five thousand. An ounce of a politicians brain is seventy-five thousand dollars."
"Seventy-five thousand dollars for an ounce of a politicians brain? Why on earth is that?"
"Do you have any idea," the director asked, "how many politicians we would have to kill?"
