Top Real Estate and Mortgage Stories - On a National Level

Existing-home sales -- including single-family, townhomes, condos and co-oops -- increased by 2 percent in May from a level of 4.89 million units in April, according to a report from the National Association of Realtors. Total housing inventory at the end of May fell 1.4 percent. This represents a 10.8-month supply at the current sales pace, down from a 11.2-month supply in the previous month.

"Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages," said Richard Gaylord, NAR president. "Today's buyer plans to stay in a home for 10 years - a good strategy for building long-term wealth."

Lawrence Yun, NAR's chief economist, added this note: "The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down significantly. Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets."

Another indication of an improving real estate market was noted by Frank Nothaft, chief economist for Freddie Mac. "The recently released S&P-Case Shiller house price indexes for April offer a few surprises," he said. "The decline in the 20-city composite index was less than that in March, and eight cities had positive monthly growth in April, compared to only two cities in March. Also, May's new home median sales price increased from the prior month, according to the Commerce Department."

Single women are determined home buyers

Single women are becoming a more important segment of the home buying market, according to a report from Harvard University's Joint Center for Housing Studies. It revealed some particularly interesting statistics.

More than one in every five home buyers is a single woman, and twice as many unmarried women are buying homes than single men. Single women comprise more than a third of the growth in real estate ownership since 1994. Key factors motivating single women to buy homes include their strong desire to become a homeowner, their need for more or less space in their residence, and their desire to live closer to their job, school or family.

Some of today's home buying women are divorced, never married, separated or widowed. Some have children, while others live with friends or partners. Many live alone. Women are making a determined effort to achieve their goal of owning a home.


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Downtown areas attracting home buyers

A specious home in a suburban area, with a large yard where the kids can run and play -- that was the dream of most families a few years ago. But that demographic trend is changing. Increasingly, a key housing demand today has moved downtown, where homeowners can sometimes walk to their point of employment or shopping or sports-entertainment venues. Long and very expensive commutes are out. Walking is in - the cool way to get to work and reach other destination points. Or at least they want to be close enough to use mass transit systems.

Those downtown area homes, often condos or townhomes, are particularly appealing to young professionals. Many of those households have no children, and many are singles. In fact, one-person households are now almost as numerous as families with kids, according to one report. "Recent market research indicates that up to 40 percent of households surveyed in selected metro areas want to live in walkable urban areas," said Christopher Leinberger, a professor at the University of Michigan and a fellow at the Brookings Institute. The changing demographics we're seeing today reflect a major shift in the way an increasing number of Americans - especially younger generations - want to live and work, he said in a CNN report.

The trend, sometimes referred to as "the new urban movement," started to gain momentum in the mid-1990s. But it accelerated in recent months and years as energy costs soared and many suburban areas became blighted by unoccupied and rundown homes that have been foreclosed.

In a recent survey conducted by Coldwell Banker Real Estate, about 78 percent of their Realtor members reported they are seeing more interest in urban living because of the high cost of gasoline. The primary reasons for interest in urban living are related to work commute and energy-efficient modes of transportation, according to survey respondents. "Urbanization is a largely positive trend," it was noted in a report carried in Urban Land magazine. "It is kinder to the Earth's ecology to house large populations in compact urban areas than to spread them out across the countryside."

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Young home buyers: a growing market segment

Young home buyers are growing as a viable home buying segment in today's market. Individuals and couples still in their 20s are the focus of intense marketing effort by home sellers, Realtors and builders.

Why the new interest in this home buying market demographic segment? These young business and professional people are often well educated and are making good incomes, thus can qualify for a sizable mortgage loan. Also, in many cases they are first-time buyers and not burdened with another home they must sell before buying a new one. Selling a home to these buyers is often quick and relatively easy, due to the lack of problems often associated with older buyers. It's a segment that's particularly appealing to professional home sellers in today's generally sluggish sales market.

However, these young buyers sometimes have their own baggage to deal with. They might have minimal credit history, and that's a concern to mortgage lenders who scrutinize applications intensely in today's market. Also, many first-time buyers in their 20s have sizable student loans and credit cards they are paying off.

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Many empty-nesters opt to upgrade homes

Nearly a third of empty-nesters - couples in middle age or older - are making upgrade changes in their existing homes as opposed to selling their home and moving into a smaller home, a condo or apartment, according to an AARP survey. In some cases, this includes major remodeling projects, preparing for their special needs in retirement living. "AARP's survey indicates that Americans who are 45-plus are not looking to downsize or leave their current homes as they prepare for or enter retirement," said Elinor Ginzler, AARP senior vice president. "They're fixing to stay, improving their homes in order to stay there longer and overlooking the drop in home values. Call it cocooning or nesting, boomers and their parents are digging in and staying put."

The survey indicates they are not worried about losing their homes, but are concerned about the effects of the housing slump and foreclosure crisis on their neighborhoods, as expressed by 64 percent of respondents. And the economy is a primary concern (89 percent). Yet another key concern is the risk of more crime in areas with high numbers of foreclosed homes, indicated by 69 percent of respondents.

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FHA financing is reviving

Recent improvements in FHA mortgages (those insured by the Federal Housing Administration) have made them much more attractive and accessible to many home buyers and owners who want to refinance their mortgage. In fact, the growing popularity of these mortgages has pushed their share of all mortgage applications to more than 10 percent, according to a report carried on the LenderLicense.com Website. The number of FHA mortgage applications since last September is more than the total for all of last year.

The latest FHA activity report shows mortgage applications running at a 2.1 million annual rate, compared with an annual rate of about 778,000 in the same period last year. "FHA mortgage applications are up since the loan limit was increased and more people became eligible," said Mary Trupo, Public Issues Director of the National Association of Realtors. "Also, the loosening of some red tape-bureaucracy has made the process more user-friendly, thus adding to increased use. And because some rules have been eased up in regards to refinance mortgages, they are on the uptake."

An informational brochure about FHA mortgages, produced by NAR and the Department of Housing and Urban Development (HUD), includes information about the recent changes and improvements. One change is the elimination of the gift restriction on down payments. Now a buyer's entire down payment can be a gift from a family member, employer, charity or local government entity, it's stated in the brochure. Also, a seller can now contribute as much as six percent of the home's price toward closing costs. This helps buyers who may have limited cash on hand to compete the purchase, it was noted. Yet another user-friendly improvement in FHA mortgages is giving buyers who don't have a credit history the opportunity to become a homeowner. An FHA mortgage applicant cannot be turned down for mortgage financing based solely on lack of credit history.

The brochure, produced by NAR and HUD, is titled "FHA Improvements Benefit You." It's part of NAR's "Shopping for a Mortgage?" brochure series, and it's the first time the NAR has partnered with HUD in producing such a consumer-oriented educational piece.

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Home buyer tax credit proposed

A proposed temporary home buyer tax credit is being supported by a growing number of real estate organizations. It could provide a meaningful boost to the housing market and the nation's economy.

"House prices and inventories obviously are central to the outlook for the economy and financial markets," said Joe Robson, vice president of the National Association of Home Builders. "Policies that stimulate home purchases in the immediate future can pay huge dividends, and a temporary home buyer tax credit provides the most bang for the buck."

The recent revival of interest among prospective home buyers suggests that temporary credits could stimulate a wave of home buying that could quickly reduce excess supply in housing markets and halt the dangerous erosion of home prices and mortgage credit quality, Robson noted. The American Housing Rescue and Foreclosure Prevention Act of 2008 (H.R. 3221) contains a provision that would provide a temporary, first-time home buyer tax credit of $7,500 for the purchase of any home used as a principal residence. The transaction would have to be closed before April 1, 2009, to qualify.

The NAHB and other housing groups generally support this legislation, but some feel it doesn't go far enough. They recommend additional provisions to help achieve a viable solution to problems in the housing market.

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Home warranty sales up

Sales of home warranty contracts (sometimes called home service contracts) are on the increase, despite their rising cost. These contracts offer homeowners some protection against unexpected, costly repair and service bills, usually during their first year of ownership of their home. Generally, the plans cover the property's operating systems (electrical, plumbing, heating, etc.) and appliances - breakdowns caused by normal wear-and-tear. The coverage is paid by one up-front fee, plus a service fee for each contractor visit.

A key reason for the current upswing in warranty sales is that the protection makes a home more salable, and today's home sellers and Realtors need all the help they can muster. A listed home that offers a year of warranty coverage has added appeal to prospective buyers. It provides peace of mind during for the buyer during their transition period. The fee is usually paid by the home seller, sometimes shared with their Realtor.

Another reason for increased warranty sales: After paying all the other costs of acquiring a home, the last thing the buyer wants is to pay out big bucks for breakdowns in the home's systems or appliances soon after moving in. In some cases, the buyers pay the fee themselves for a year of warranty protection. The initial fee (or one-time premium) normally ranges from $300 to $500. Each in-home service fee typically ranges from $50 to $100.

It's important to shop around for the best warranty plan for meeting your needs. Different plans vary in items covered, and in price. Ask for references from your Realtor or friends and relatives who have purchased a warranty plan in the past. Also, study the contract wordage in any plan being considered. Ask the providing firm's representative about any provision you don't fully understand. And be sure to retain all maintenance reports and receipts.

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Luxury home prices dropping

Even luxury homes are experiencing price reductions in today's market, making their purchase more feasible for a growing number of buyers. A classic example is Donald Trump's home, Maison de L'Amitie, in Palm Beach, Florida. The property was listed for $125 million, but was reduced to $100 million. A tentative sale on the property was recently announced by Trump on the Larry King TV show.

While prices are lowering, so too is the inventory of luxury homes being offered for sale. This is partially due to the weakening of the dollar, and its attraction to the growing number of foreign buyers who often seek a luxury home in the U.S. Property owners are not only lowering prices, but are also more flexible in negotiating price and terms. The two most expensive homes in the nation, both listed at $125 million, are located in Beverly Hills, California and Greenwich, Connecticut. Two $100 million homes are located in Lake Tahoe, Nevada and Palm Beach, Florida (Trump's home). Next in high value homes is a $95 million home in Stamford, Connecticut.

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Investors switch to real estate

More investors are switching from stock and bond portfolios to real estate investments. The volatile stock market, experiencing huge dips recently, has less investment appeal, while real estate is viewed by many investors as a highly potential place for their funds. In many cases, the price of properties has lowered and sellers are more open to negotiations. Also, interest rates on mortgage loans have remained low, but are generally rising at this point.

Another key factor: An increasing number of analysts feel we are nearing the bottom of the real estate sales and value cycle, making this a very strategic time to invest. "Investors can run from the risk and hide their head in the sand, or they can face the next phase of the real estate market," said Craig Rozema, a real estate investment consultant and author.

In any market, it's always important to be careful and prudent in making real estate investments. Don't respond to high-pressure pitches on radio or television promoting investments, without researching the offer and possibly consulting with a knowledgeable individual you trust, including Realtors who are savvy about factors, trends and property values in the local market.

Please call your local real estate experts Jake Lee 843-240-0431 or Ann McKinnon 843-907-6899 if you are interested in buying or selling real estate. Right now is the absolute best time to buy and invest in your future through real estate! Jake and Ann cover all of Georgetown and Horry counties and have the knowledge and experience to assist you in any transaction from real estate investing, commercial real estate, first time home buyers, second home owners, luxury real estate purchases, and more. Call today! Also visit them on the web at their state of the art website www.SCRealEstatePartners.com where you will find the latest listings, valuable information, and market statistics. Jake and Ann have many more real estate listings than those on the website, so don't hesitate to call. They'd love to hear from you!