Archive for Buyers
Shopping for the Best Mortgage Rates
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Are you enticed by the mortgage interest lowest rates in decades? If so you’re not alone, but they are often out of borrowers’ reach. Lenders base their rates on perceived risk. Only if you can show you’re low-risk would you qualify for a rate that matches those seen in headlines.
If you’re looking for the lowest available rates consider these basic factors:
- Credit Score: The ideal FICO score is around 740 or higher. This will put you in the best place for pricing.
- Points: 1% of the loan amount is a point, and by paying points you can reduce your mortgage rate. Be sure to ask for a zero point quote as well to compare the two rates.
- Property Types: Such property types as duplexes, condominiums in newer buildings or with lower down payments, commercial properties or non-owner occupied properties come with higher rates.
- Down Payment: Experts say putting down at least 25% could lead to more attractive pricing. Lenders offer different breaks on rates if equity is higher.
- Loan Length: ARM and 15-year loans are often lower than those on the 30-year loan. Consider how long you plan to live in the property and weigh your options.
- Other considerations:
- Lock-in: You may receive a lower rate for a shorter lock period 30-45 days rather than the usual 60 days
- Additional ownership costs, taxes, insurance and maintenance.
Inspired by New York Times Article by Vickie Elmer published January 12, 201
Enticing Foreign Investors – Buy a home get a Visa?
Posted by: | CommentsRecnetly, U.S. Senators Charles Schumer (D-NY) and Mike Lee (R-UT) introduced a bill that would allow foreigners who spend at least $500,000 on residential property to obtain visas allowing them to live in the United States. The “Visa Improvements to Stimulate International Tourism to the United States of America Act”, or VISIT-USA Act is similar to an existing program that puts foreigners on a fast track to a green card if they invest at least $500,000 in an American business that creates at least 10 jobs.
The legislation would create a new homeowner visa that would be renewable every three years, but would not be a path to citizenship. There are a number of stipulations and restrictions, however:
- To be eligible, a person would have to buy a primary residence of at least $250,000 and spend a total of $500,000 on residential real estate. Other properties could be rented.
- The purchase would have to be in cash, no mortgage or home equity loan allowed.
- The property would have to be bought for more than its most recent appraised value
- Buyer would have to live in home for at least 180 days each year, requiring paying US Income taxes on any foreign earnings.
- Visa eligibility would be revoked if property was sold.
- Work visas still must be obtained to hold a job.
- Neither buyer nor dependents would be eligible to receive Medicaid, Medicare or Social Security benefits.
Some brokers say that a visa incentive to foreign buyers could potentially even triple sales in their markets.
“California, Florida, New York, Colorado, Hawaii, and Texas — those states will see a huge increase in demand,” Sandra Miller, a broker at Engel & Volkers in Santa Monica, told the Los Angeles Times.
Manhattan Residential Rental Market Report Fourth Quarter 2011
Posted by: | CommentsThis week, we released our Fourth Quarter report for the Manhattan Residenital Rental Market. Manhattan Residential Rentals Market Overview Q4 2011 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.
“Tight mortgage credit conditions continued to drive rental prices and activity higher.”
- The median net effective rent (face rent less landlord concessions) jumped 9.5% from $2,950 to $3,121 in the same period last year. The year-over-year-gains were consistent across all rental price indicators.
- The 2-bedroom and 3-bedroom markets outpaced their smaller counterparts,increasing 14% and 18.1% respectively over the same period.
- New rental activity (excluding lease renewals) was up 10% from 7,217 to 7,942 in the same quarter last year.
- About 7.4% of new leases had some form of landlord concession compared to the 40.5% in the prior year quarter. For those leases with concessions, the average amount was the equivalent of 1.2 months of free rent.
- Days on market—the number of days from original list date to lease signing—was at its second fastest pace of 37 days in 15 years, which is when we began tracking this metric.
Manhattan Co-op/Condo Residential Sales Market Report Fourth Quarter 2011
Posted by: | CommentsOur Q4 Manhattan Market Overview was released today and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.
“After a year of mixed economic news, the Manhattan housing market, while continuing to experience overall price stability, closed out the year with a slower pace of sales.”
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Median sales price was $855,000, a modest 1.2% increase from $845,000 in the prior year quarter. Price per square foot increased 5.6% to $1,117 from $1,058 over the same period.
- There were 2,011 sales in the fourth quarter, 12.4% less than 2,295 in the prior year quarter. The fourth quarter had the lowest number of sales since the same period six years ago, perhaps related to the unusual surge in sales in the prior quarter. Pending sales were also below the prior year level.
- There were 7,221 active listings at the end of the fourth quarter, essentially unchanged from the same period last year, but 2.6% less than the ten-year quarterly average of 7,412.
- Days on market—the number of days from the last price change if any to the contract date—saw a modest 5 day increase to 130 days from 125 days, still consistent with the 132 day average for the prior decade.
- Listing discount—the percent difference between the list price at time of sale to the sales price—fell to 4.9% from 8% in the same period last year.
Mortgage Market Trends for week ending December 30, 2011
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MARKET RECAP
The news is understandably slow the week between Christmas and New Year’s Day. The most notable release was last Friday’s news on new home sales, which rose to an annualized rate of 315,000 units in November, a 1.6-percent gain over October.
To be sure, we have a long way to go until we reach the normalized construction rate of 1.5-million units per year. Nevertheless, we expect the new-home market to gain pace in 2012. After all, there are only 158,000 units in inventory. Even at the current slow sales pace, this equates to a record low six-month supply
Over the past three years, new-home construction has fallen far below historical norms and also below the level needed to keep pace with population growth. The fact is our country gains roughly 2.7 million people and one million new households annually.
You might not see supply as a problem. We are all familiar with the glut of distressed properties. Indeed, Bank of America expects eight million distressed homes to come to market over the next four years. These homes, we’ve so often heard, will continue to depress new home construction.
We view B-of-A’s outlook with a skeptical eye. There is a likely prospect that many of these distressed properties will simply go away. Destruction is too frequently overlooked in many supply projections. A house is not a permanent structure. Many are destroyed by fire, wind and flood each year. Many more are lost through simple decay and abandonment. Based on U.S. Census data, 300,000 homes are lost annually. That number will surely rise in years to come.
In short, the math – low inventory plus more households minus more home destruction – suggests to us a rebound in new-home construction. We are not alone in this contention, either. Wells Fargo projects that housing starts will continue to rise each year for the next five years before reaching once again the normalized construction rate of 1.5-million units annually by 2017.
Of course, projections are one thing, betting on those projections is another. Here, we see an encouraging trend. Big money is starting to wager on housing. The Wall Street Journal reports that many large hedge funds are investing billions in housing-related investments. Other investors have followed suit. Shares of homebuilders are up 30 percent over the past three months, making them one of the best performing investments in the market.
Up For A New Year
As we approach the end of the old year nearly all of us stop to ask, “How will the new year unfold?” Of course, none of us know with any certainty the answer to that question, but it can be insightful (and fun) to ponder. So, how will 2012 unfold, at least as it pertains to the housing and mortgage markets?
Both markets will obviously be influenced by economic growth, which, in turn, will spur job growth. We see a pick up in economic growth and job growth in 2012.
The economy has been growing at a sluggish rate for too long now. The United States is unique in that Americans tire of pessimism quicker than most other cultures, and then we do something about it. In our opinion, rising consumer confidence points to a lot of pent-up demand that is waiting to bust loose, and will bust loose in 2012.
A pick up in demand, in turn, necessitates new hires. In fact, a recent survey by CareerBuilder.com found that nearly one in four employers is keen to add new permanent full-time employees. These employers are simply waiting for a clear sign the coast is clear. We think they will get that sign in the first quarter of 2012.
Greater economic activity will obviously impact the housing market. We see accelerated sales volume in both the new and existing home markets. We also expect to see prices stabilize in the first half of the year, and then appreciate perceptibly in the second half.
As for the mortgage market? This is much more difficult to call. The Federal Reserve has stated it intends to hold rates low through 2012. However, all it takes are a few persuasive signs that the economy is back on track, and the Fed could easily backtrack from its stated goals. All we can say is that we would be much less surprised to see mortgage rates 50 basis points higher six months from today than 50 basis points lower.
Graph Courtesy from NY Times in an article by Vickie Elmer December 29, 2011. Data and Commentary provided by Fred Ashe, from DE Capital Mortgage.
Where will Baby Boomers live?
Posted by: | CommentsRoughly 10,000 baby boomers turn 65 each day. Born between 1946 and 1964, there are an estimated 72 Million American baby boomers, all considering how to age and where.
In a new book “Unassisted Living: Ageless Homes for Later Life” (Monacelli Press; $45) Wid Chapman, Architect, and Jeffrey P. Rosenfeld, a gerontologist specializing in the relationship between aging and the built environment collected 33 examples of residences that have been designed to bridge the distance between ‘one’s vital and declining years’.
Design features such as lack of thresholds at doors, surfaces that diffuse sunlight and accessible bathrooms and showers all contribute to a house suitable for aging. Almost minimalist by design, the less-cluttered, more open pathways and fewer places to slip or bump into furniture are key. By removing tripping hazards and streamlining the design, accessibility is achieved.
Today’s baby boomers want to remain independent as long as possible. The whole idea of retirement is changing. Technology allows people to combine leisure and work from a remote setting. Gone is the idea of going south at a specified age. Connection to family, grandchildren, parents are keeping people in one area rather than becoming snow birds and migrating south.
From New York Times article on November 24, 2011 by Julie Lasky
Childproofing: Get Down on Their Level
Posted by: | CommentsIt’s every parent’s worst nightmare; an accident harms your little darling, especially a preventable accident. Outlets, dresser drawers and cabinets filled with chemicals are child magnets. Being naturally curious, a child will explore everything with their hands and mouth. Choking, shock and strangulation hazards are everywhere.
Some advice from the experts:
- Start before the child comes
- Get down on their level. Crawl around on your hands and knees and see things from a child’s perspective
- Outlets: use outlet covers with horizontally sliding doors. Easy for parents to use, don’t need to be removed and reinserted. Check out Safety 1st Swivel Outlet cover about $2.25, or Levitons Decora tamper-resistant duplex receptacle, $2.50 at Home Depot.
- Choking and strangulation hazards: Cords on window treatments and power cords. Secure the electric cords out of reach with Safety 1st’s Cord Short’ner, about $4. Forego the venetian blinds for something that is completely cordless.
- Secure the TV to the wall, a child reaching and grabbing could tip the TV onto themselves.
- Secure furniture more than 30 inches tall with wall restraints. Be sure to screw the straps into a wall stud.
- With all the temptations in the kitchen and bath, toxic chemicals, sharp utensils, etc., think Operation Lockdown:
- Use latches that automatically reset upon closing. Safety 1st No-Drill Deluxe latch kit (about $31/set of 4) uses a magnetic handle to release the latch. Once installed, keeping track of the handle will be the hardest part.
- In the bath, get a toilet lock. KidCo makes one that automatically resets and is relatively easy to clean (about $15).
- Keep the bathroom doors closed and put child-proof doorknob covers on the knobs.
- Stairs: Use a child safety gate top and bottom.
While this list isn’t all inclusive, it gives you a good start. Consider calling in a consultant. Every home is different, and poses different potential hazards.
Based on New York Times article by Bob TedeschiOctober 26, 2011
Third Quarter 2011 Hamptons And North Fork Sales Report Released
Posted by: | CommentsToday we released third quarter sales for theHamptons/North Fork residential market. The Hamptons/North Fork Market Overview Q3 2011 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.
“East End market conditions reflected increased activity, especially in the luxury market as listing inventory slipped”
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There were 538 sales in the third quarter, 14.7% above 469 sales total in the same period last year, but 13.1% below the prior quarter total of 619 sales.
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Median sales price was $700,000 in the third quarter, 12% higher than $625,000 in the prior year quarter. In the third quarter, 67.1% of all sales fell below the million dollar threshold consistent with the 65.9%, five-year average.
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There were 2,238 listings at the end of the third quarter, 1.5% less than the 2,271 listings in the same period last year.
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Although price indicators and sales activity increased from the same period last year, the listing discount measuring the negotiability between buyer and seller edged higher to 11.3% from 10% in the same period last year.
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Days on market, the number of days from the last price change to contract date, increased 6 days to 170 days from 164 days in the prior year quarter.
Third Quarter 2011 Long Island Sales Report Released
Posted by: | CommentsToday we released third quarter sales for the Long Island residential market. The Long Island Market Overview Q3 2011 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.
“Sales activity jumped above last year’s levels, as listing inventory slipped. Negotiability between buyers and sellers held steady.”
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Median sales price declined 3.2% to $365,000 from $377,250 in the prior year quarter. Average sales
price followed a similar pattern, declining 3.9% to $457,496 from $475,946. The decline is largely attributable to last year’s federal homebuyers tax credit that had pushed sales prices higher. -
There were 5,141 sales in the third quarter, 18.4% above the 4,343 total in the prior year quarter and 22.3% above the prior quarter total of 4,205. The current total is the fourth highest quarter in three years, led by three quarters significantly impacted by the federal homebuyers tax credit from the second half of 2009 through early 2010.
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There were 21,462 listings on the market at the end of the third quarter, 1% less than 21,670 listings in the prior year quarter and 5.8% less than 22,772 listings in the prior quarter.
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The average number of days to sell a property from its original list date to contract date was 116, nominally longer than 112 days in the prior year quarter.
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The listing discount, or negotiability between buyer and seller, measures the percentage discount from the original list price and the sales price, was essentially unchanged at 6.5% in the third quarter compared to 6.6% in the same period last year.
Third Quarter 2011 Brooklyn Residential Sales Market Overview
Posted by: | CommentsToday we released third quarter sales for the Brooklyn residential market. Brooklyn Market Overview Q3 2011 reported here and summarized below was prepared by Miller Samuel for Prudential Douglas Elliman.
“Sales noticeably increased, as all price indicators edged higher, and listing inventory remained stable.”
- There were 2,219 sales in the third quarter, 18.1% more than 1,879 sales in the prior year quarter, and the second highest quarterly total in three years.
- Median sales price increased 5% to $510,000 from the prior year quarter, reaching its highest level in three years, and tying the 2008 third quarter level.
- Listing inventory edged 0.9% higher to 6,688 in the third quarter from the prior year quarter. With the rise in sales outpacing the increase in inventory, the absorption rate fell to 9 months from 10.6 months over the same period.
- Days on market expanded by nearly a month over the same period to 149 days from 109 days in the prior year quarter, as stable inventory, and higher sales resulted in an increase in sales from older listings.
- The listing discount—the difference between the listing price at time of contract and the contract price—was 3% in the third quarter, down from 5% over the same period last year.
