Tidewater Real Estate Blog

Adjustable-Rate Mortgages Gain Steam Again
Shortly after the subprime mortgage crisis, adjustable-rate mortgages were often blamed for leading to soaring rates of loan defaults and home foreclosures — which ultimately caused many borrowers to shun them due to its higher risk than fixed-rate mortgages. Now more borrowers are revisiting ARMs.

ARMs, which have low initial interest rates that change over time, aren’t exactly the same as they were before the subprime crisis though. Lenders have introduced more conservative ARM products that no longer offer extra-low “teaser” rates that adjust every six months or “pick-a-pay” and “option” features that let borrowers pay less than the monthly interest that will give them with a bigger bill later on, The New York Times reports.

The ARMs most in demand are “5/1” and “7/1,” which have fixed interest rates for the first five or seven years and then adjust annually at a capped rate.

Bank of America has reported a higher interest in its ARM products, with nearly twice as many ARM transactions last month than last year. ARMs account for 10 percent of all of its mortgages, the bank reports.

Posted by Brad Nichols on March 21st, 2011 6:50 PMPost a Comment (0)

Subscribe to this blog
March 15th, 2011 3:37 PM
What Buyers Want in Homes Today
Buyers have a long list of what they want when home shopping, but one of their biggest desires: A good deal.

"And no matter where a seller prices their property, they're looking to negotiate," says Patricia Szot, president of the MetroTex Association of REALTORS®.

But that’s not all they want. Bankrate.com recently asked real estate professionals to chime in on the top desires of their buyers when home shopping. Here are four things that made the list of top home buyer preferences:

1. Homes that are in good condition. "There's not a lot of flexibility in that," says Ron Phipps, president of the National Association of REALTORS®. Many buyers now take the attitude: "I'd rather spend the money getting into the house" and not have to spend more money later, Phipps says. One of the major reasons is that "buyers have limited amounts of cash," he adds. "Even if they want to do a fixer-upper, they don't have the money to do it."

2. A bargain with incentives. Buyers are looking for a good deal, even when considering bank-owned properties, says Joan Pratt, real estate broker with RE/MAX Professionals in Castle Pines, Colo. "They want the short sales and the foreclosures and they want them to look like they're owner-occupied," she says. "They don't want to paint. They don't want to put carpet in. They don't want to clean."

And they aren’t only asking for a low price but they also want incentives to buy too. As such, sellers are offering everything from gift cards for new furniture to paint to financial assistance at closing.

3. Outdoor living areas. Homes with screen porches, outdoor kitchens, two-way fireplaces are becoming increasingly competitive in the marketplace as more buyers say they want more outdoor living space.

4. Open kitchens. "The wall between the kitchen and the family room is evaporating," Phipps says. "The kitchen is becoming part of the gathering space.” (See Buyers Want Cozy, Connected Kitchens)
Posted by Brad Nichols on March 15th, 2011 3:37 PMPost a Comment (0)

Subscribe to this blog
March 8th, 2011 11:34 PM
Popular Kitchen Remodeling Trends
Remodeling kitchen trends are creating stylish kitchens with cleaner lines, built-in dining, and pops of color, according to a recent article in RISMedia.

Here are some recent trends in kitchens across the country.

1. Built-in dining areas. Eat-in kitchens are in high demand as more remodelers are opting for extensions in counters that resemble a table, either in lower or higher height to the countertop. The counter extension is different than bar seating because diners can sit around the edge and face one another, and not just sit in a row. The counter extension saves space, offers an extra buffet service, and more kitchen storage, says Deanna Carleton of Kitchen Design Group.

2. Dressing up the kitchen with lighting. An affordable way to upgrade a kitchen is just by switching out the lights, designers say. For example, hand-blown glass shades on pendant lights, contemporary drum shades, and chandeliers can quickly update a kitchen. Layers of light continue to be popular, such as with a ceiling lighting fixture combined with under-counter lighting as well as ambient lights behind a glass-front door, designers say. LED under-counter lighting and LED recessed ceiling lights are also popular.

3. Pops of color. Neutral colors in the kitchen is the safe preference, but more kitchens are adding bolder pops of color--such as in persimmon or pomegranate--to spice up the kitchen. Colored knobs, kitchen accessories, and even appliances are bringing in these pops of color. Designers say pops of color can also be brought in by the fabric choice in kitchen window seats, the upholstered seats, or window valances.

4. Striving for simplistic luxury. Clean lines and transitional designs are “in” while ornate Tuscan and French country kitchen styles are falling out of favor in the kitchen. Betty Nairn of Cabinet-S-Top in Granger Township, Ohio, says “simplistic luxury” is the kitchen trend nowadays.

Source: "8 Areas to Pay Attention to When Updating Your Kitchen," RIS
Posted by Brad Nichols on March 8th, 2011 11:34 PMPost a Comment (0)

Subscribe to this blog
March 5th, 2011 11:57 AM
Mortgage Rates Drop Again This Week
For the third straight week, long-term mortgage rates inched down, according to Freddie Mac’s weekly mortgage survey.

The 30-year fixed rate mortgage averaged 4.87 percent for the week, down from last week’s 4.95 percent. The rate was 4.97 percent at this time last year.

The 15-year mortgage rate also dipped for the week, averaging 4.15 percent, down from last week’s 4.22 percent.

The 5-year adjustable-rate mortgage averaged 3.72 percent, which is a drop from last week’s 3.8 percent average.

"Mortgage rates saw an overall improvement this week,” says Frank Nothaft, Freddie Mac’s chief economist. “Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this year's high set just three weeks ago.” This means that home buyers can now expect to pay $263 less per year on a $200,000 loan, Nothaft adds.

Posted by Brad Nichols on March 5th, 2011 11:57 AMPost a Comment (0)

Subscribe to this blog
2011 Rebound: Affordability High, Investors Back
Plenty of signs point to the housing market finally bottoming out and moving into rebound mode this year, experts say in a recent article in The Wall Street Journal.

Investors, who were burned when the housing bubble burst in 2006, are back on the market, betting on a rebound, and snagging up houses and condos in all-cash deals.

What’s more, housing is at the most affordable it has been in decades nationwide — when home prices and average incomes are taken into account, according to analysts at Moody's Analytics. The cost of a house is equal to about 19 months of income for an average family, which is at the lowest level in 35 years. (Prices generally average nearly two years of pay.)

"Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own,” Michael Larson, a real-estate analyst at Weiss Research in Jupiter, Fla., told The Wall Street Journal.

Housing prices likely will bottom in 2011, says Scott Simon, a managing director at the money-management firm Pimco in Newport Beach, Calif. While he expects housing prices to possibly drop another 5 percent, he says that is a small amount when in some markets prices have dropped by half or more since housing prices started falling in 2006.
Posted by Brad Nichols on February 28th, 2011 1:19 PMPost a Comment (0)

Subscribe to this blog
February 24th, 2011 1:42 PM
Survey: Sellers Fare Better With Agents
Sellers have a better chance at getting their house sold by using a REALTOR® than opting for the do-it-yourself approach, according to a survey of 1,000 home owners by HomeGain.com, an online real estate resource. Nearly 60 percent of home owners who used a REALTOR® to sell their home were successful compared to 39 percent of FSBOs, the survey found.

In the survey, 83 percent of home owners said they used a REALTOR® to sell their home, whereas 17 percent said they tried to sell it themselves. This corresponds to results from NAR's 2010 Profile of Buyers & Sellers, which found 88 percent of sellers were assisted by a real estate agent. (Additionally, 83 percent of buyers bought their home through an agent.)

“It is especially striking that home owners fare significantly better in selling their homes using a REALTOR®  than selling on their own,” says Louis Cammarosano, general manager at HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR® than those who try to sell their homes on their own.”

Among the findings in its For Sale by Owner vs. REALTOR® survey:
  • 88 percent of home owners who sold their homes using a REALTOR® said they would use a REALTOR® again.
  • 24 percent of FSBOs eventually contacted a REALTOR® to help sell their home.

Posted by Brad Nichols on February 24th, 2011 1:42 PMPost a Comment (0)

Subscribe to this blog
February 22nd, 2011 4:23 PM
Watch Before You E-mail, Court Says
E-mails are just as binding in real estate negotiations as traditional ink-on-paper contracts, according to a state court ruling in New York regarding a real estate dispute.

“Given the vast growth in the last decade and a half in the number of people and entities regularly using e-mail,” handwriting and e-mail should now basically be considered one and the same, ruled the Appellate Division, First Department of State Supreme Court in Manhattan, N.Y.--which handed down its ruling on Oct. 5, but it mostly went unnoticed by the public. The ruling was appealed this week to New York's highest court, the Court of Appeals.

The case--Naldi v. Grunberg--stems from accusations of a breach of contract in a commercial real estate transaction. The court’s ruling, which also applies to residential transactions, is expected to bring some clarity to how legally binding e-mail is in real estate.

“As much as communication originally written or typed on paper, an e-mail retrievable from computer storage” is proof of a deal, the court said.

Robert J. Braverman, a Manhattan real estate lawyer, told The New York Times, “you need to be mindful of what it is you are saying in electronic communications." For example, a broker or seller who uses a phrase such as “$700,000 was more of what I had in mind” in an e-mail “might have a problem,” Braverman says.

Mario J. Suarez, a lawyer at Thompson Hine, says adding a disclaimer on e-mails may help. The e-mail disclaimer may read something like the communications “shall not be deemed an offer, as no documents are binding unless and until executed.”

Source: “E-mail May Be Binding, State Court Rules,” The New York Times (Feb. 17, 2011)

Posted by Brad Nichols on February 22nd, 2011 4:23 PMPost a Comment (0)

Subscribe to this blog
February 18th, 2011 2:49 PM
30-Year Rates Drop Slightly, But Still 5%
The 30-year fixed rate mortgage averaged 5 percent this week, after breaking the 5 percent mark last week for the first time in nearly a year, according to the Freddie Mac weekly mortgage market survey. Last week, the 30-year mortgage rate averaged 5.05 percent.

"Fixed mortgage rates eased slightly this week and continue to be very affordable,” says Frank Nothaft, Freddie Mac chief economist. “Prior to 2009, interest rates for 30-year fixed rate mortgages had never been at 5 percent since our survey began in April 1971. In both 1981 and 1982, the rates were over three times as high as they are today. ... The housing market is struggling to regain traction despite still historically low rates.”

Here’s how other rates fared for the week:
  • 15-year fixed-rate mortgage averaged 4.27 percent, down from last week’s 4.29 percent.
  • 5-year adjustable-rate mortgage averaged 3.87 percent, down from last week’s 3.92 percent.
  • 1-year adjustable-rate mortgage averaged 3.39 percent, up slightly from last week’s 3.35 percent.
Posted by Brad Nichols on February 18th, 2011 2:49 PMPost a Comment (0)

Subscribe to this blog
Banks Want Higher Down Payments From Buyers
Banks are increasingly telling borrowers that if they want to buy a home, they need to come with a higher down payment. Banks are requiring higher down payments in order to help mitigate the bank's risk as home prices continue to fall. Plus, banks say larger down payments discourage delinquencies.

The Obama administration last week called for gradually increasing down payments to a minimum of 10 percent on conventional loans that can be bought or guaranteed by Fannie Mae and Freddie Mac.

The median down payment in nine major U.S. cities rose to 22 percent in the fourth quarter of 2010 on properties purchased through conventional mortgages--the highest in median down payment since the data started being tracked in 1997, according to a Wall Street Journal and Zillow.com analysis.

In the late 1990s, median down payments once averaged 20 percent in the nine metro cities Zillow analyzed, but in 2001 started inching downward as banks began requiring little or no down payment in some cases during the housing boom.

Now banks want more, believing that the more a buyer has invested, the less likely they are to default.

Borrowers who can’t afford the higher down payments are seeking assistance elsewhere, such as loans for veterans or those backed by the Federal Housing Administration (which require 3.5 percent down payment), or loans by the United States Department of Agriculture for rural areas.

Posted by Brad Nichols on February 16th, 2011 1:02 PMPost a Comment (0)

Subscribe to this blog
Most Metro Areas See Home Prices Stabilizing
Home sales rebounded in 49 states during the fourth quarter with 78 markets – just over half of the available metropolitan areas – experiencing price gains from a year ago, while most of the rest saw price weakness, according to the latest survey by the National Association of REALTORS®.

Total state existing-home sales, including single-family and condo, jumped 15.4 percent to a seasonally adjusted annual rate of 4.8 million in the fourth quarter from 4.16 million in the third quarter, but were 19.5 percent below a surge to an unsustainable cyclical peak of 5.97 million in the fourth quarter of 2009, which was driven by the initial deadline for the first-time buyer tax credit.

In the fourth quarter, the median existing single-family home price rose in 78 out of 152 metropolitan statistical areas (MSAs) from the fourth quarter of 2009, including 10 with double-digit increases; three were unchanged and 71 areas had price declines. In the fourth quarter of 2009 a total of 67 MSAs experienced annual price gains.

The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009. The median is where half sold for more and half sold for less. Distressed homes, typically sold at discount of 10 to 15 percent, accounted for 34 percent of fourth quarter sales, little changed from 32 percent a year earlier.

Lawrence Yun, NAR chief economist, is encouraged by the trend. “Home sales clearly recovered in the latter part of 2010 and are helping to absorb the inventory, including many distressed properties. Even with foreclosures continuing to enter the inventory pipeline, they’ve been selling well and housing supplies have trended down,” he said. “A recovery to normalcy requires steady trimming of the inventories.”

Yun added, “An improving housing market and job growth will go hand in hand. The housing recovery will mean faster job growth.” He projects about 150,000 to 200,000 jobs will be added to the economy this year from an anticipated 300,000 additional home sales in 2011.

Yun further noted, “Better than expected sales and/or strengthening in home values can have an even bigger job impact as consumer spending would naturally rise from a housing wealth recovery affecting a vast number of American families.”

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said a very favorable affordability environment is a huge factor in the recovery. “Although job growth has been relatively modest and credit is tight, you can’t underestimate the impact of historically high housing affordability conditions,” he said.

“Mortgage interest rates recently hit record lows, median family income has edged up and prices in most areas have been stable following the correction from the housing boom. For people with good credit and long term plans, it’s hard to imagine a better opportunity than what we see today,” Phipps said. “Unfortunately the flow of credit is unnecessarily tight and is constraining the pace of the housing and job growth recoveries.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was a record low 4.41 percent in the fourth quarter, down from 4.45 percent in the third quarter; it was 4.92 percent in the third quarter of 2009.

“The healthier local housing markets are also experiencing favorable local employment conditions,” Yun said. Job growth is a major factor in price appreciation in metro areas such as the Washington, D.C., region, where the median existing single-family home price of $331,100 in the fourth quarter is 8.1 percent higher than a year ago; the Boston-Cambridge-Quincy area, at $346,300, up 4.2 percent; and Austin-Round Rock, Texas, at $190,300, up 4.1 percent.

Smaller metro areas sometimes see larger swings in price measurement depending on the types of properties that are sold in a given period. In such markets, full year price data can provide additional context.

In the condo sector, metro area condominium and cooperative prices – covering changes in 57 metro areas – showed the national median existing-condo price was $164,200 in the fourth quarter, which is 6.4 percent below the fourth quarter of 2009. Twenty-two metros showed increases in the median condo price from a year ago and 35 areas had declines; only 11 metros saw annual price gains in fourth quarter of 2009.

“Consumers in the hard hit regions of Nevada, Arizona and Florida were able to scoop up condos at absolute bargain basement prices,” Yun said. Median condo/co-op prices in affected metro areas include Las Vegas-Paradise at $60,700, Phoenix-Mesa-Scottsdale with a fourth quarter median of $68,900, and Miami-Fort Lauderdale-Miami Beach at $81,900.

Regionally, the median existing single-family home price in the Northeast increased 2.3 percent to $240,400 in the fourth quarter from a year earlier. Existing-home sales in the Northeast rose 15.0 percent in the fourth quarter to a level of 797,000 but are 22.8 percent below the surge in the fourth quarter of 2009.

In the Midwest, the median existing single-family home price rose 0.5 percent to $139,200 in the fourth quarter from the same period in 2009. Existing-home sales in the Midwest jumped 18.3 percent in the fourth quarter to a pace of 1.02 million but are 25.4 percent below the cyclical peak one year ago.

In the South, the median existing single-family home price edged up 0.3 percent to $152,400 in the fourth quarter from the fourth quarter of 2009. Existing-home sales in the region rose 11.4 percent in the fourth quarter to an annual rate of 1.82 million but remain 17.8 percent below the surge in the fourth quarter of last year.

The median existing single-family home price in the West declined 2.9 percent to $214,400 in the fourth quarter from a year ago. Existing-home sales in the West jumped 19.9 percent in the fourth quarter to a level of 1.17 million but are 14.2 percent below the cyclical peak in the fourth quarter of 2009.

“A good portion of the sales activity in the West has been driven by investors taking advantage of discounted foreclosures, with high levels of all-cash transactions,” Yun explained.

Posted by Brad Nichols on February 10th, 2011 4:16 PMPost a Comment (0)

Subscribe to this blog
Recent Posts:
Archive:
My Favorite Blogs:
Sites That Link to This Blog:

Brad Nichols of Rose & Womble Realty 123 S Lynnhaven Rd Virginia Beach, VA 23452-7401
Phone: Fax:

Home Inspection | Curb Appeal List | Insurance Closing Costs | Getting the Highest Price | Free Home Valuation | Pre-Approval | City and School Info | 2010 Buyers Guide | 10 Steps | Favorite Sites | Home Search | MILITARY | Closing Costs | First Time Buyers | Inspection Tips | Glossary | Home | Writing the Offer | Mortgage Shopping | Lender Types | Staying Approved | Seller Paid Closing | 9 Steps to Ownership | Daily Rate Advisory | Real Estate Blog

Copyright © 2012 Brad Nichols of Rose & Womble Realty
Portions Copyright © 2012 a la mode, inc.
Another XSite by a la mode, inc. | Admin Login| Terms of Use| Site Map
All rate, payment, and area information are estimates and approximations only.