The October Real Estate Buzz

30-Year Fixed Mortgage Rate Hits Record Low

Mortgage rates posted mixed results this week, but the benchmark conforming 30-year fixed mortgage rates fell to a record low of 4.41%, according to Bankrate.com. The average 30-year fixed mortgage has an average of 0.43 discount and origination points. The previous record low of 4.42% was set in October and November of 2010.

The average 15-year fixed mortgage increased to 3.63% while the larger jumbo 30-year fixed rate bounced to 4.94%. Adjustable-rate mortgages were mostly lower, with the average 5-year ARM dropping to 3.12% and the 7-year ARM sinking to 3.27%. Both are record lows.

Prevailing economic concerns have kept mortgage rates at historically low levels. The average 30-year fixed mortgage rate has been below 5% in all but 11 weeks during the past year, and never as low as this week. A widely anticipated speech by Fed Chairman Ben Bernanke and a full slate of economic data in the next 10 days will steer perceptions about the economy as well as the direction of mortgage rates.

The last time mortgage rates were above 6% was Nov. 2008. At the time, the average 30-year fixed rate was 6.33%, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.41%, the monthly payment for the same size loan would be $1,002.70, a difference of $239 per month for anyone refinancing now.

Source: Bankrate, Inc.



Pending Home Sales Slip in July but Up Strongly From One Year Ago
Washington, DC, August 29, 2011

Pending home sales declined in July but remain well above year-ago levels, according to the National Association of Realtors®. All regions show monthly declines except for the West, which continues to show the highest level of sales contract activity.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said sales activity is underperforming. "The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy," he said. "We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process."



"Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April," Yun said. "The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market."

The National Association of Realtors®, "The Voice for Real Estate," is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.




*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales; it coincides with a level that is historically healthy.


Prepping a Home for Sale: Simple Staging Tips for Inside and Out
By Barb Schwarz, Stagedhomes.com


Before you show your home to any potential buyer, you want to make sure the staging is perfect. Follow these general tips and your home will look better than the competition.

FOR THE INSIDE

•Clear all unnecessary objects from furniture throughout the house. Keep accessories and objects on the furniture restricted to groups of 1, 3, or 5 items. In general, a de-cluttered home helps the buyer mentally "move in" with their own things. Rearrange or remove some of the furniture in your home, if necessary. Many times home owners have too much furniture in a room. When it comes to selling your home, thin out overcrowded rooms to make the rooms appear larger.
•Clear all unnecessary objects from the kitchen countertops. If it hasn't been used for three months…put it away! Clear refrigerator fronts of messages, magnets, pictures, etc.
•In the bathroom, remove any unnecessary items from the countertops, tub, shower stall, and commode top. Keep only the most necessary cosmetics, brushes, perfumes, etc., in one small group on the counter. Coordinate towels in one or two colors only.
•Take down, reduce, or rearrange pictures and objects on walls. Patch and paint all walls, if necessary.
•Review the house interior, room by room, and…
1. Paint any room needing paint.
2. Clean carpet and draperies that need it.
3. Clean windows.

•Pack up and store. If you need room to store extra possessions, get a storage unit.
•Leave on certain lights during the day . During showings turn on ALL lights and lamps.
•Set a background tune. Play light FM music every day in the house, for all viewings.

FOR THE OUTSIDE

•Go around the perimeter of the house and move all garbage cans, discarded wood scraps, extra building materials, etc., to the garage or, if applicable, take them to the dump.
•Check gutters and roof for dry rot and moss. Make sure they are swept and cleaned.
•Examine all plants. Plants are like children…they grow so fast. Prune bushes and trees. Keep plants from blocking windows: "You can't sell a house if you can't see it!"
•Remove any dead plants, weed all planting areas, and put down fresh mulching material.
•Keep your lawn freshly cut, edged, and fertilized during the growing season.
•Clear patios or decks of all small items, such as little planters, flower pots, charcoal, barbeques, toys, etc.
•Check the condition of the paint on your home, especially the trim and the front door. The first impression, or "curb appeal," is very important.
IN GENERAL
Try to look at your house "through a buyer's eyes," as though you've never seen it before. This exercise will help you see what needs to be done. Any time and money invested on these items will usually bring you the return of more money and a quicker sale.




August 2011 Sales Statistics


This graph clearly shows that real estate values have continued to decline, with only a few months showing small increases. As values declined, the number of sales increased as indicated on the "# of sales" graph below.



The number of closed sales increased substantially to a record 3,706 closings. It is obvious that buyers are active in the Las Vegas market and are taking advantage of the falling prices.



The number of REO/Bank Owned properties continue to exceed other ownership type sales numbers. It is obvious the banks are pricing their properties aggressively putting pressure on other sellers to accept lower prices as well.





4 Don’ts When Selling a Home
By Melissa Dittmann Tracey, REALTOR Magazine

Kelly O'Ryan, an office manager for Coldwell Banker in Lexington, Mass., recently highlighted several tips of what home owners shouldn't do when trying to sell their home in an article at RISMedia. Here are a few don'ts that made it on their list, see if you agree!

1. Don't slack off on home maintenance. Houses in need of TLC often attract investors or property flippers, which are known for submitting low-ball offers. To attract offers and the highest bids, sellers should attend to any upkeep and maintenance issues before putting the house for sale.

2. Make sure the home isn't being overshadowed outside. Nothing kills curb appeal more than a home you're selling that you can't even see. Be sure to trim trees or bushes to ensure they aren't blocking any windows or the exterior of the home.

3. Remove wallpaper. Wallpaper and borders can be a nuisance to remove so you might want to take these personal decor touches down before you list the home. Neutralize the homes in subtle colors that will appeal to the most buyers and allow buyers to better visualize their personal decor moving in.

4. Don't keep an empty home empty. Buyers can struggle in picturing themselves moving in if a home is left empty. Vacant homes can feel cold and rooms can look smaller than they really are. That's why O'Ryan reminds us why builders spend thousands of dollars staging model homes. If your listing is vacant, consider staging it to bring in furniture and accessories to help define the various rooms functions.