As someone who may have recently bought a home or (more likely) are thinking of buying a home now, you should know that most American’s consider home buying to be a solid investment. Despite the downturn that we are in right now, it appears that most people still agree that when you purchase a home you are making a good investment decision. According to a survey done by The National Association of Realtors of 3,793 home owners and renters in January 2011, both home owners and renters found the following in their “American Attitudes about Homeownership” survey…

The vast majority of both home owners and renters say that owning a home is a smart decision over the long term. Even in today’s challenging economy, 95% of owners and 72% of renters believe that over a period of several years, it makes more sense to own a home.

Home owners are much more likely to be satisfied with the quality of their family and community life than renters. While more than half of owners (56%) are “very” or “extremely” satisfied with the overall quality of their family life, only about one-third (36%) of renters report the same levels of satisfaction. Also, 43% of home owners are “very” or “extremely” satisfied with their community life, compared with 30% of renters.

An overwhelming majority of home owners are happy with their decision to own a home. A full 93% of owners surveyed would buy again.

Most renters aspire to home ownership. The majority of renters (63%) say they are at least somewhat likely to purchase a home at some point in the future. Among them, young adults (18- to 24-years-old) have the strongest aspirations for home ownership.

Source: Homefinder.com, February 2011

February 17, 2011 – Nationwide housing affordability during the fourth quarter of 2010 rose to its highest level in the 20 years since it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released today.

The HOI indicated that 73.9 percent of all new and existing homes sold in the fourth quarter of 2010 were affordable to families earning the national median income of $64,400. The record-setting index for the fourth quarter surpassed the previous high of 72.5 percent set during the first quarter of 2009 and marked the eighth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.

“Today’s report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “However, while this is good news for consumers, both home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales.”

Indianapolis-Carmel, Ind., was the most affordable major housing market in the country for the second consecutive quarter, after relinquishing for a quarter the top spot it has held for five years. In Indianapolis, 93.5 percent of all homes sold were affordable to households earning the area’s median family income of $68,700.

Also ranking near the top of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Syracuse, N.Y; Warren-Troy-Farmington Hills, Mich.; and Detroit-Livonia-Dearborn, Mich.

Among smaller housing markets, the most affordable was Elkhart-Goshen, Ind., where 97.0 percent of homes sold during the fourth quarter of 2010 were affordable to families earning a median income of $58,600. Other smaller housing markets near the top of the index included Lansing-East Lansing, Mich.; Kokomo, Ind.; Mansfield, Ohio; and Bay City, Mich.,.

Source: National Association of Home Builders

The Theme Continues For Now: Sales Prices Climb, Activity Slow
According to MIBOR’s Monthly Indicators Report for January, the trend that defined much of 2010 continues in the first month of 2011 with strong median and average sales prices coupled with decreased sales activity. For the three months ending in January, median and sale prices increased by more than four percent each to $119,500 and $147,966 respectively. Closed sales are down 17.5 percent, new listings are down 10.7 percent and overall months of inventory is down to eight months – a 9.2 percent decrease over the same three month period a year ago.
Source: MIBOR

Submitted by: Sarah Smith

Builders applied for 3,720 new-home permits last year, a 2.6 percent increase over 2009, which was one of the weakest years for homebuilding in decades.

The homebuilding industry ended the year on a weak note, with 265 permits issued in December in the nine-county metro area. That was a slight drop from 279 in December 2009, according to Builders Association of Greater Indianapolis, which tracks building permits.

Counties showing gains in homebuilding permits last year were Madison, up 107 percent to 122; Johnson, up 59 percent to 383, Boone, up 12 percent to 304; and Morgan, up 5 percent to 88.

Hamilton County saw a 1 percent drop, to 1,354, while Marion County permits slid 6 percent, to 729. Hendricks County also registered a drop, of 10 percent, to 569 permits.

Homebuilders benefited early in 2010 from a federal tax income tax credit for homebuyers that spurred activity in the market. But the tax credit expired in the spring and permits fell for six of the last seven months of the year.

Source: Indianapolis Star

An annual “state of real estate” report was released today that brushes a sheen of optimism on the office, industrial and retail markets.

After commercial real estate markets tanked in 2009, they partially bounced back last year and stand to strengthen even more this year if hiring and consumer spending grow, says the report released by the largest commercial brokerage in Indianapolis.

An overview:

» Office market: The metro area’s vacancy rate hit an all-time high of 21.6 percent in the second quarter, and construction of new office buildings is the slowest since the early 1990s. But landlords leased 230,000 square feet of office space in the fourth quarter, the equivalent of four football fields. The market should see stabilized rents and more deal-making in 2011, as long as the job market doesn’t weaken, said Mary Beth Kohart.

» Industrial market: Net leasing of distribution and other industrial space last year was the highest among all major Midwestern cities, including Chicago. Area business parks are home to many of the nation’s largest logistics companies, taking advantage of the city’s central location for shipping efficiencies. One concern this year: 4.8 million square feet of vacated industrial space will hit the market in the form of the soon-to-be-closed GM Stamping and Visteon auto parts plants and the loss of a major tenant in the Western Select center on the Eastside, said Fritz Kauffman.

» Retail market: The metro area hasn’t seen a new shopping center built since 2008, but next year will bring the redevelopment and expansion of River’s Edge retail center in Castleton, with a Nordstrom Rack off-price store as a major tenant. And there are “stirrings” of other new retail developments in established shopping areas, said Bill French.

» Investment market: Sales of commercial properties to investors picked up as 2010 wore on. This year could see a jump in sales of foreclosed and other distressed properties, as banks and other lenders unload properties with defaulted loans, said Angela Wethington.

Source: IndyStar

Our challenge now is in presenting the home-buying opportunity of a lifetime to consumers besieged by bad news and sensational headlines and sound bites of a consistently negative press.

As I write this commentary, mortgage rates stand at historic lows, thresholds we haven’t seen since the Truman administration. Likewise, home prices on a national basis are significantly lower than their peaks of the last decade.

Housing affordability, as measured by the National Association of Realtors, stood near record highs in September. Consider the typical American home now vs. October 2006. Four years ago, the principal and interest payment on an existing home priced at the national median—$218,900—was $1,085 after a 20% down payment and with the prevailing 30-year fixed mortgage rate of 6.31%. That same home today sells for $171,700 and, with a 20% down payment and 4% fixed mortgage for 30 years, carries a principal and interest payment of just $656.

Prospective buyers continue to focus on price, yet I submit that interest rates will be the most fluid part of the home-buying equation over the coming months and beyond. As the world economy grows, so will the demand for natural resources, including lumber and other materials used to build homes.

I like to say the only time people really think about their home price is when they buy and when they sell. However, they think about their house payment every month and those payments won’t go much lower. If you are lucky and can squeeze another $10,000 out of that national median price of $171,700, you might lower your monthly payment by around $47 at current rates. However, a 1% jump in rates to 5% would add nearly twice that amount to the monthly payment.

Of course, this does not discount why many consumers are hesitating to enter the housing market. Slow economic recovery and job growth have most Americans concerned about the future. Still other consumers face negative equity or have dealt with foreclosure—challenges that must play out over time.

Yet for others, particularly those who’ve owned their property for more than five years and the growing ranks of those considering homeownership for the first time, housing and its long-term virtues of shelter, wealth-building and personal and civic pride are available at bargain-basement prices that should not be ignored.

Americans still believe that buying a home is a sound financial decision and a key part of their American Dream. They want a home for all the right reasons—as a place to raise a family, build for the future and face life’s opportunities and challenges. They believe in the home as a long-term asset, not a siding-clad automated teller machine.

It comes down to educating buyers and sellers – helping them weigh homeownership possibilities and benefits – enabling them to capture an opportunity of a lifetime.

Written by: Earl Lee
Source: RISMedia, January 3, 2011

But you’ll need to examine what caused you to fall behind on your mortgage and take steps to fix the problem. “You have to look at what were the reasons you didn’t make the payment,” said Davis-Demas. “Was it budgeting? You can modify that type of behavior.”

A foreclosure is a major hit to your credit history and stays on your credit report for seven years.

So, after a foreclosure, your priority has to be rebuilding your credit. You’ll have some time to do so, because mortgage giants Fannie Mae and Freddie Mac impose strict rules on how long it will take before you’re eligible for another mortgage, as well as strict rules on the credit score and the size of the down payment required of borrowers with a prior foreclosure.

Here’s what you need to do to rebuild your credit to qualify again for a mortgage:

Pay your bills on time: The FICO score, the dominant credit score used by lenders, gives the greatest weight to payment history, so make sure you consistently pay your bills on time. “Stability is the key,” said Craig Jarrell, president of the Dallas region of IberiaBank Mortgage Co. “Have you demonstrated that you are now capable of owning a home and paying the bills, and have recovered from whatever circumstance caused the original foreclosure?”

Review your credit report: You’re entitled to a free credit report once every 12 months from each of the three national credit bureaus—Experian, TransUnion and Equifax. You should get a copy and check it for any inaccuracies.
To get your free credit report, go to http://www.annualcreditreport.com. “Make sure it is about you and only you,” said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. “If you find errors, dispute them. If you discover old debts, it will weigh in your favor to satisfy them. Paid late looks better than not paid at all. Make sure that debts older than seven years have rotated off your report, as these could be dragging your score down unnecessarily.”

Check your mortgage: You want to be sure that you don’t still owe anything on your old mortgage. Sometimes proceeds from a foreclosure sale aren’t enough to cover what’s owed on the mortgage, which would leave you owing the difference.
“Make sure there is a zero balance reflected, and if you are responsible for a shortfall, make arrangements to repay the remaining balance,” Cunningham said.
Many lenders are willing to settle that “deficiency judgment” for less than what’s owed because “it’s better than getting no money at all,” Jarrell said.

Apply for credit: In particular, apply for different varieties of credit. “Credit scoring models value having different types of credit,” Cunningham said. “Having some revolving accounts, typically credit cards, and some installment fixed-payment loans, such as a car payment, can improve your score.” But don’t apply for too much credit at once. “This can appear as though you’re desperate for credit and perhaps make lenders less inclined to extend credit to you,” Cunningham said. “Further, too many credit inquiries can have a negative impact on your credit score.”

Don’t fall prey: Watch out for credit repair companies that promise to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job—after paying a fee for the service. “The truth is, that no one can remove accurate, negative information from your credit report,” according to the Federal Trade Commission. “It’s illegal.” Only the passage of time can assure that negative, but accurate, information on your credit report will be removed.
When it comes to repairing your credit, there are no quick fixes, the experts say. What lenders want to see is responsible financial behavior over time.

“Know that time is your friend, as the farther you move away from the financial distress, the less negative impact it has,” Cunningham said. “Follow with responsible behavior with your new credit, and you’ll soon have a solid credit file.”

Source: Pamela Yip, (c) 2010, The Dallas Morning News.
RISMEDIA 2010—Distributed by McClatchy-Tribune Information Services.

Please discuss any home ownership questions you may have with your trusted real estate agent. He or she is there is help you – you simply need to ask.

Other major advantages of working with a real estate agent include:

Convenience
If you’re not using a real estate agent and you want to see five properties, you’ll have to make five appointments with five agents and it might take all day – or several days. But a real estate agent can make all those calls for you and you can see multiple properties on one trip.

Objectivity
A real estate agent can be objective about homes you view and highlight faults, as well as strong points. Additionally, the agent will be familiar with sales of comparable homes in the area and can counsel you on making an offer that’s fair to you, as well as acceptable to the sellers.

You should select a real estate agent who’s familiar with the neighborhoods where you’re interested in buying.

Agents knowledgeable in a particular area can tell you which specific locations are more desirable than others, even which side of any given street is better. Most buyers can’t possibly know that themselves. If you see two homes on the same street that look similar, yet have significant differences in asking price, someone who’s representing your interests will be able to tell you why – and perhaps whether the more expensive house is worth it.

Negotiating
Buyers don’t sit across the table from sellers. You’re depending on your agent to get your points across and negotiate the best deal, and it’s important that your representative is someone you have trust in.

Obtaining a Mortgage
A real estate agent can counsel buyers on choosing an appropriate home mortgage and may be able to help obtain the best terms. Most can tell you what’s a good rate and whether it’s worth it to keep shopping around. Some even have connections to mortgage brokers. But its most important to work with a lender that YOU are comfortable with.

Making an Offer
An experienced real estate agent is invaluable! There are many clauses real estate agents can put into contracts that protect buyers’ interests.

Pushing the Deal to Closing
Once an offer is accepted, buyers can continue to rely on their agents. Your agent can help you work with home inspectors. They’re sometimes better inspectors than they are communicators. An agent can help you determine what to take seriously without over-reacting.

A real estate agent can help keep the transaction on track by making sure deadlines are met and that the loan is finalized in time for the closing.

Written by: Jeremy Pilarski
Submitted by: David Brenton