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Archives for March 2013

NEW LISTING: Cozy Log Cabin – Ketchum Waterfront Neighborhood

This cozy cabin nestled among the aspens is just footsteps away from a lifetime of fishing in the desirable Ketchum waterfront pocket neighborhood.
Built from logs the home has vaulted beam ceilings, a river rock fireplace, large view decks, and is surrounded by common areas. The ideal get away retreat or a great place to call home.

Big Predictions for Housing for Next 2 Years

Home sales are projected to post some big gains in the next two years, according to Fannie Mae’s latest monthly economic outlook.

Fannie Mae economists predict that existing-home sales will rise by 10.5 percent this year, and by 6.2 percent in 2014. The economists made even bolder projections for new single-family home sales — growing 15.1 percent this year and 44.1 percent in 2014.

“We expect home prices to firm further amid a durable housing recovery, continuing to boost household net worth, gradually diminishing the population of underwater borrowers, and reducing incentive for strategic defaults,” according to Fannie Mae’s report.

inventory_NAR_FNMA_March_2013

Tight inventories continue to restrain sales of existing homes. Although the number of homes on the market grew by nearly 10 percent from January to February, the 1.94 million homes for sale represented a 19.2 percent decline from the same time a year ago.

Fannie Mae projects that mortgage rates will stay low by historical averages this year, but the 30-year fixed-rate mortgage will rise from an average of 3.5 percent during the first quarter to an average of 4 percent during the final three months of 2013. During the fourth quarter of 2014, mortgage rates are projected to tick up to a 4.5 percent average.

Mortgage applications for purchases are projected to increase by 16.8 percent this year and by 17.1 percent in 2014. However, a decline in applications for refinancings will likely cause mortgage originations to be down 14.5 percent this year and by 31.4 percent in 2014, Fannie economists predict.

SOURCE: Realtor Daily News

$50,000.00 Price Drop – Hailey 4 bed, 3 bath home – Now $154,900

Located just blocks from Main Street, close to bike paths on a quiet street in East Hailey, this home with a rare full basement and ample extra rooms is awaiting its new owner.
4 bedrooms, 3 bathrooms, large family room plus additional rooms for your home office or a play room.
Large fenced back yard with country shed and large south facing deck to take full advantage of our beautiful sunny days.

Banks Tackling More Foreclosures

The number of homes in foreclosure is on the rise but that doesn’t mean more homeowners are falling into financial difficulty, according to figures released today by the foreclosure tracking firm RealtyTrac.

Nearly 1.5 million homes were in the foreclosure process during the first quarter of 2013, according to RealtyTrac, a 9 percent increase from the same period last year. However, company officials say that’s due to banks tackling a backlog of delinquent properties and not from an increase in homeowners falling behind on their mortgage payments.

U.S. Foreclosure Inventory

Foreclosure settlement cited

“Delinquent loans that fell into a deep sleep after the robo-signing controversy in late 2010 are gradually coming out of hibernation following the finalization of the national mortgage settlement in April 2012,” said Daren Blomquist, RealtyTrac vice president. “The settlement provided some closure regarding accepted foreclosure processing practices, and as a result lenders have been reviving more of these delinquent loans and pushing them into foreclosure over the past 12 months.”

The National Foreclosure Settlement, reached by state attorneys general and the federal government with five major lenders, arose out of claims of improper foreclosure practices and established foreclosure guidelines the lenders agreed to follow, in addition to commitments to provide billions in mortgage relief for at-risk borrowers.

Total still nearly one-third below peak

Overall, the number of homes in the foreclosure process is still 32 percent below their peak of 2.2 million in December 2010, according to RealtyTrac’s U.S. Foreclosure Inventory Analysis, released today.

The current figures were driven by a 59 percent annual increase of homes in the pre-foreclosure inventory, those that have been served a notice of default but not yet scheduled for a foreclosure auction. The number of homes scheduled for auction has actually declined by 25 percent since the first quarter of 2012, according to RealtyTrac, while the inventory of bank-owned properties is down by 3 percent over the same period.

An estimated 35 percent of homes in the foreclosure process but not yet repossessed by lenders were reported as vacant, apparently abandoned by their owners in anticipation of foreclosure.

Big jump in mega-mansion foreclosures

Over three-fifths of all homes in the foreclosure process had loan amounts of less than $200,000, while another 30 percent had loan values in the $200,000 to $400,000 range. At the same time, the biggest increase by far was among homes with mortgages in excess of $5 million, which shot up by 120 percent over the past year.

By contrast, the next –biggest increase was in the sub-$50,000 category, which saw a 60 percent increase in foreclosure inventory over the past year, while those in the $50,000-$300,000 categories saw increases of 30-40 percent. The smallest increases by far were in the $400,000-$5 million range, none of which exceeded 10 percent.

SOURCE: Mortgage Loan

Bad Online Advertising – Why You Should Care When Selling

Below is a reprint of a recent article on a generic Seattle Real Estate Website. The same market strategy is true here as many of the Greater Sun Valley buyers come from out of the immediate area. Good and/or Bad Online Marketing makes a difference as to the end result.

Choosing the right marketing agent can make the difference between failure and success. Before listing your property for sale, compare the online marketing presence and strategies of agents you interview. Ask to see what type of proactive marketing they will do “For You” to help sell your property. Now to the post . . .

– – – – –

With 90% of buyers starting their home search online, and the Seattle area being so tech savvy, the days of bad online advertising is over. For a long time the trend was for sellers to choose a real estate agent based solely on who they know, whether it be a family friend or the agent they used to originally buy the house. More and more I’m seeing sellers abandon this strategy and interviewing multiple agents, searching for one that know’s how to beautifully showcase a property online. As a result, you’re going to see the marketing for listings improve (and buyers everywhere rejoice!).

Another trend I see coming to an end is the seller paying for the buyers closing costs. For the last few years the real estate market was down, and it was almost a given that the seller would pay at least a portion, if not all of the buyers closing costs (up to 3% of the purchase price). There are plenty of buyers but not enough inventory right now, therefore sellers are rarely paying closing cots. Of course if the market turns this trend will come back, but for the time being it’s on its way out.

SOURCE: Seattle.Curbed.com

EXPERTS AGREE: Sellers Who Delay Selling May Miss Out

“If you’re selling one house just to move up to another, it does you no good to wait for prices to rise — the price of the move-up home will increase faster than the price of the place you’re leaving behind,” said Redfin CEO Glenn Kelman.

Real estate is always a game of knowing when to make your move.

With that in mind, industry experts suggest move-up buyers remain mindful of how quickly home prices appreciate while riding the current market recovery.

Seller's may miss by not selling nowFor move-up buyers wanting to wait out rising home prices to ensure they can sell their current home at a maximum price, analysts say the value of such a move depends on when the homeowner purchased their current residence.

Daren Blomquist, vice president of RealtyTrac, says homeowners who purchased during the down market of the last two or three years would be wise to move up in 2013.

“Because they bought near the bottom, these homeowners should have built up some good equity that can go toward the purchase of a new home, and waiting longer to build more equity likely won’t provide much advantage given that other homes that they might want to move up to will also be appreciating at roughly the same pace,” said Blomquist.

He added, “In addition, the low interest rates of 2013 are certainly not guaranteed to last forever.”

According to data from the Mortgage Bankers Association, mortgage rates are expected to reach 4.4% in the next 12 months and the 20-year average could possibly hit as high as 6.5%.

Real estate broker Redfin says this is precisely the reason why some homeowners wanting to sell their current home in lieu of finding a nicer one should not wait.

While waiting a few years will most likely mean the selling price of the current home will be higher, it also means the price of the new home will rise as well.

“If you’re selling one house just to move up to another, it does you no good to wait for prices to rise — the price of the move-up home will increase faster than the price of the place you’re leaving behind,” said Redfin CEO Glenn Kelman.

With that being said, Blomquist warns potential homebuyers against rushing to buy a home once they have sold their current home.

According to RealtyTrac data, more foreclosure inventory will become available in the next six to 12 months in markets with rebounding foreclosure activity in 2012. Markets such as Florida, Illinois, Ohio, Pennsylvania, New York and New Jersy will see the strongest growth in foreclosure inventory, according to RealtyTrac.

“Particularly in these markets it might be good for the move-up buyers to sell in the spring when inventories are still tight, rent or stay with family for a few months, and then buy in the fall when that additional foreclosure inventory is listed for sale,” said Blomquist.

However, for homeowners who purchased near the peak of the housing market — in the past five to seven years — it’s probably better to wait for home prices to rise further before they sell and move up, Blomquist advises.

“If these folks need to move because of a job or other reason, it is worth considering renting out the property in the short term to take advantage of the strong rental market,” said Blomquist.

SOURCE: HousingWire

SHORT VIDEO: From Gloom to Bloom • Housing Outlook

Each month, Freddie Mac compiles data on major economic, housing and mortgage market indicators and offers forecasts. Vice President and Chief Economist, Frank Nothaft provides a brief video preview of this month’s outlook.

U.S. Economic & Housing Outlook

How a Charge Card affects a Mortgage Application

How is a mortgage application affected by a charge card, such as an American Express or Diners Club card? Quirkily.

A charge card requires you to pay the balance in full each month. Mortgage lenders view your charge card balances differently from how they used to, in part because of evolving guidelines established by mortgage investors and by Fannie Mae and Freddie Mac.

Years ago, charge card debt hardly counted toward a mortgage applicant’s debt.

“In the past few years, most investors required us to count 5% of the balance due as part of the borrower’s debt-to-income ratio,” says Deana Auman, vice president of operations for Fairway Independent Mortgage in Needham Heights, Mass. “Now, most investors require us to verify that the borrower has the funds to pay off the balance in full.”

Auman says that issues with American Express cards are a frequent cause of delays in mortgage closings. Sometimes, problems with charge cards prevent applicants from qualifying for mortgages.

Now, most investors require us to verify that the borrower has the funds to pay off the balance in full.

“It depends on the borrower’s situation whether it will impact the closing or not, but a lot of people use their American Express card to pay all their daily expenses in order to get rewards points,” Auman says. “The tricky part comes when we qualify someone on a day when their American Express card shows a zero balance — and then, when we do a credit-refresh check a few days before closing, it shows a balance of $5,000. At that point, we have to make sure we can document the assets to pay that bill, which can sometimes be difficult at the last minute.”
CreditCardLock

Barbara Roubo, a senior loan officer with Potomac Mortgage Group in Reston, Va., says that mortgage investors sometimes vary their guidelines based on the size of the charge card balance.

“If a borrower has a high American Express balance, the investors usually require us to document the income to pay it off,” Roubo says. “Some investors allow us to use 5% of the charge card balance as part of their debt-to-income ratio instead of verifying assets for the entire balance. As long as the borrower can still qualify for the loan with that extra debt, this method is easier because no additional documentation is necessary.”

If the cash to pay off the charge card balance in full must be verified, it can cause problems for the mortgage applicant.

“If someone has an American Express balance of $25,000 and needs $100,000 in cash to go to settlement, then they will need to show verifiable assets of $125,000, plus whatever cash reserves are required by the lender,” Roubo says. “If we don’t see enough in the documents we have, we’ll have to ask for a new bank statement and then source each deposit in the account.”

Charge Card Advice

If you have a high debt-to-income ratio when you apply for a mortgage, or if you don’t have a lot of extra assets, Auman recommends not using a charge card between the mortgage loan application date and the closing.

“If you’re a tight borrower, you shouldn’t use a charge card because it could delay your closing or even cause you to be disqualified,” says Auman. “Even if you use it for work travel and your employer will reimburse you, if a balance shows up on your credit report, you’ll have to show that you can repay it in full.”

Credit Card Rules

Rules about credit card balances are simpler than the rules about charge cards: The minimum payment due for a credit card must be included in your debt-to-income ratio when calculating your ability to pay the mortgage.

Carrying a credit card balance of more than 25% to 30% of the limit can negatively impact your credit score.

As long as you have the income and assets to cover your charge card and credit card bills, your mortgage application shouldn’t be adversely affected. But you should be prepared for the paperwork to document your ability to pay your charge card and your mortgage.

SOURCE: Bank Rate

Mortgage Rate Drop Just In Time For Spring Home Buying

MCLEAN, VA–(Marketwire – Mar 21, 2013) – Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates reversing course from the previous week and heading lower with the start of the spring homebuying season. As of this week, the 30-year fixed has remained below 4 percent for a year.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.54 percent with an average 0.8 point for the week ending March 21, 2013, down from last week when it averaged 3.63 percent. Last year at this time, the 30-year FRM averaged 4.08 percent.
  • 15-year FRM this week averaged 2.72 percent with an average 0.7 point, down from last week when it averaged 2.79 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.61 percent this week with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 2.96 percent.
  • 1-year Treasury-indexed ARM averaged 2.63 percent this week with an average 0.4 point, down from last week when it averaged 2.64 percent. At this time last year, the 1-year ARM averaged 2.84 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for the Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Primary Mortgage Market Survey

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Low and stable inflation is placing downward pressure on fixed mortgage rates. Annual growth in the consumer price index has remained at or below 2 percent for the past four months, and for the producer price index even lower. This, in part, is why the Federal Reserve monetary policy committee on March 20th lowered the upper end of its inflation forecast for 2013. In addition, our March Outlook calls for 30-year fixed mortgage rates to remain below 4 percent throughout this year.”

Economists Revise Housing Figures Amid Optimism

Several economists have recently revised their predictions on housing values to reflect a stronger-than-expected real estate rebound, and some have even doubled their original forecasts over the rise in home prices. For example, economists at Bank of America revised their home price forecast from 4.7 percent this year to 8 percent.

Capital Economics’ Economist Paul Diggle upwardly revised his home price forecast too, from a 5 percent projection to an 8 percent rise in home prices this year. 130314BofAForecast

“Prices of both new and existing homes are picking up, the latter by over 10 percent year-on- year,” Diggle notes. “Indeed, after a couple of years during which new house prices outperformed, primarily owing to builders constructing more homes for the higher-end market, we now expect existing house prices to close the gap. As more consumers are able to access mortgage credit, home builders should widen their offering, while continued investment demand will bid up existing house prices.”

Consumers are growing more optimistic about home prices too. A recent report of consumers from mortgage giant Fannie Mae showed that 48 percent believe home prices will rise over the next year.

Ivy Zelman, an independent real estate analyst, told CNBC last week that “we’re in a nirvana for housing. I’m the most bullish I’ve ever been.” Zelman said that home prices could rise for another four to six years.