Don's Delaware Real Estate Tips

Who do YOU Believe?

2009-01-05T04:57:00.000-08:00

Tracking Home Prices - Different Measures; Different Approaches,
by NAR Research Staff

Since all real estate is local, interpreting changes in home prices at the national or metropolitan level can be difficult. This can be problematic for policy makers and market participants like home buyers, sellers, and REALTORS®. The first step is understanding what the various measures of house prices are, what those measures actually track, and how this information can be interpreted and used. Below is a summary describing four most closely watched home price indexes and discussing the major differences between them.

There are four major home price indexes that market participants follow:
· the National Association of REALTORS® Median Sales Price series
· the Case-Shiller Index group
· the Federal Housing Finance Agency (formerly OFHEO) Index
· the Freddie Mac Conventional Mortgage Home Price index

Of the series listed above, only NAR's is a pure median measure. The NAR Median Sales Price (which is not an index) tracks the sales price of the typical home where half of the homes sold at a higher and half sold at a lower price in a particular month.

Indexes track home prices with a level of abstraction since there are several ways that information about home prices can be aggregated to develop an index. Consequently, changes in the prices of homes in a particular neighborhood may differ from an index based on home sales from a larger or slightly different geographic area.

Each of the other measures is an index. Like all indexes, these indexes track house prices with a level of abstraction. Percent changes in the index figure mirror percent changes in the prices of houses; therefore, a single index figure may not be very meaningful. The weighted repeat sales technique-employed by all of the other major players attempts to address an issue arising in pure sales medians, namely, that the houses that sell one month are not the same houses that sell the following month. If these houses differ in quality, then a change in the median sales price of houses reflects the change in the quality of the home sold as well as any appreciation in value that would have accrued to a constant-quality house.

Researchers track and measure repeat sales to get past this limitation. For example, if a house sold in 1980 for $100,000, and it sold again in 2007 for $400,000, it would register as a repeat sale. Researchers would use its 300% appreciation over 27 years with information from other repeat sales to determine how much this same (and therefore "constant quality") home had appreciated in the most recent time period.
Unlike a median sales price, the repeat-sales methodology is very complex and requires an extremely large database of home sales transactions that limits its application to the nation or to large metropolitan areas.

The National Association of REALTORS® Median Sales Price (NAR's median sales price) data is a series of dollar figures released monthly at both the national and Census regional levels. In addition, NAR releases quarterly median home price data for more than 150 metropolitan areas. NAR reports the observed median sales prices based on closed sales transactions gathered from Multiple Listing Services (MLSs). NAR's median sales price data on existing homes are available at the Association's web site at http://www.realtor.org/research. Click on "home sales statistics" in the left hand navigation.

Case-Shiller
The Case-Shiller Index group consists of 20 regional (metro area) indexes and two composite indexes (a 10-region and a 20-region index). These indexes are reported monthly as 3-month moving averages and cover a period ending two months prior. This group also consists of a broader national index that is released quarterly.
Case-Shiller uses a weighted repeat sales methodology to measure price change. This type of index examines price changes for the same home based on the two most recent sales transactions. While this methodology helps to control for several factors that influence price, it requires the exclusion of many data points. For instance, Case-Shiller indexes exclude data from foreclosures as well as home sales transactions in the following states: Maine, Indiana, Wisconsin, North Dakota, South Dakota, South Carolina, West Virginia, Alabama, Mississippi, Idaho, Montana, Wyoming, and Alaska. Additionally, Case-Shiller gathers information on transactions from local government sources and therefore, information about sales transactions is subject to delay. Furthermore, the index is value-weighted: that means that high-priced homes have a greater impact on the index than do low-priced homes. Sales financed with conventional as well as jumbo and subprime loans are included in the index.
For more information about the Case-Shiller Index, visit www.homeprice.standardandpoors.com.

continued in future posts

How do Realtors earn their compensation

2008-12-31T05:04:00.000-08:00

A recent NAR study found that 81 percent of sellers used full-service brokerage, in which real estate agents provide a range of services that include managing most of the process of selling a home from listing to closing. Nine percent chose limited services, which may include discount brokerage, and 9 percent used minimal service, such as simply listing a property on a multiple listing service.

Like home buyers, home sellers rely on referrals and their previous experience when looking for a real estate agent. Thirty-eight percent of sellers were referred to a real estate agent by a friend, neighbor, or relative; 26 percent used an agent with whom they had worked before.

Sixty-seven percent of home sellers contacted only one agent before selecting one to assist with their home sale. While some sellers do contact more than one agent, the significant role of referrals in the selection process is one factor accounting for the large share of sellers contacting only one agent.

What do home sellers want from their real estate professionals? Primarily, sellers want agents to price their home competitively, market the property, find a buyer and sell within a specific time frame. Overall, 21 percent of sellers indicated that what they wanted most from their agent was help pricing their home competitively. Other important considerations were help selling the home within a specific time frame, help finding a buyer, and help marketing to potential buyers.

One of every five sellers wanted each of these services from their agents. As with home buyers, sellers' satisfaction with their real estate agent is high. Eighty-five percent of sellers would definitely or probably use their agent again or recommend their agent to others.

Selling a home in today's housing environment can indeed be challenging. Fortunately, home sellers can rely on the expertise and knowledge of real estate professionals to help.

Mortgage Applications Surge on Falling Rates

2008-12-23T05:06:00.000-08:00

Mortgage lenders are seeing a deluge of applications for refinancing as borrowing costs decline due to a recent cut in the federal funds rate by the Federal Reserve, and many are hiring temporary workers or reassigning employees to handle the swelling volume.

Some experts believe the jump in re-fis could signal a turning point in the market and reduce pressure on banks by the U.S. government to bolster lending following the distribution of millions of dollars in assistance. However, it remains uncertain how many borrowers will qualify for loans, how long it will take to process loans under new documentation and credit standards, and whether borrowers will back down in hopes that mortgage rates will fall further. Source: Wall Street Journal, Dan Fitzpatrick (12/22/08)

Is real estate still a good investment?

2008-12-22T06:50:00.000-08:00

We all can attest to how much media coverage is currently given the nation’s real estate industry. So much has been said, it sometimes seems that we’ve forgotten that we all need a place to live, and how we provide for that need hasn’t really changed much over time. Owning a home isn’t right for everyone or every situation, as it always has been. However, if one examines the rationale for when purchasing a home makes sense; that also hasn’t changed. Home needs are still there; family growth or reduction, upsizing or downsizing, relocation, vacation homes, etc.

Consider that mortgage rates and programs are still very attractive. The major change is that risky loans and companies who provided them have pretty well gone by the wayside.
Investing in one’s residence has always been one of the stable ways to build financial security. It is important though, to remember that the basic model has always involved holding the property for at least 5 years before attempting to sell for profit. The basic average appreciation rate of 3-6% per year has held for many years.

Nothing has changed. In today's world, investing in property is still a viable means to enhance a person’s financial portfolio. Throughout the last 50 years there have always been periods of slower or faster appreciation. The last 7 years has exhibited one such extreme growth and correction cycle. If you bought early during that period and held, you have achieved approximately the basically 4% per year appreciation (including the recent downturn). If you bought later and hold for the normal time you should also do fine.

The real problem has come to those trying to make quick profit and got caught in the down period of the last 2 years. Given the complexity of buying or selling in today’s market the best advice is to ask a real estate professional to assist from the beginning concept if possible.
When considering perhaps the largest investment in your future, it makes good sense to get professional help. By the way Realtors usually provide this service free of cost to buyers, and at low cost to sellers.

Will your home be ready when the market is?

2008-08-15T10:34:00.000-07:00

It's widely known that we're still in a buyer's market. Just as many experts predicted the housing market correction over the last 2 years, there is a growing consensus that in 6-9 months we could see a significant flattening or even modest upturn in market price and sales volume as inventories are beginning to dwindle.

If you've been thinking about upgrading, downsizing, relocating, etc., your home over the next year or so, there is a golden opportunity right now to prepare.

Examine your home, or better yet ask a real estate agent to assist (at no cost of course); discover what really needs to be done to make your home stand out when the time comes to put it on the market. Just as importantly, learn what not-to-do as well. Some improvements will add little or nothing to the market value of your home, or make it more appealing to the emerging boomer buyer market as buyer trends are constantly changing.

Have you been putting off painting, landscaping, kitchen and/or bathroom upgrades, roof, driveway sealing, drywall repairs, flooring etc? All these projects take time, and if the current market has taught us anything, it's that homes must be move-in ready, and up to date in order to sell in a timely fashion. So, don't wait til 3 weeks prior to listing your property before taking care of these important issues both inside and out.

Remember, "The home that has great curb appeal and is up to date in both kitchen & bathroom fixtures and appliances always selles the fastest", assuming its priced according to the market of course.

Silver lining to mult-iunit foreclosures

2008-07-31T05:06:00.000-07:00

How can Foreclosures Help the Homeless?
Due to an abundance of foreclosed homes and vacant buildings, social service agencies are now able to afford to buy these buildings and are using them to house the homeless. In turn, this has even caused the homeless population to shrink, according to recent studies.

In Denver, for instance, the homeless population has declined 36 percent because nonprofits have added 1,242 low-income units, many in buildings with facilities for treating addiction and healthcare.

“These are opportunities we haven’t seen in decades,” says Philip Mangano, executive director of the interagency council on homelessness.

Source: Newsweek, Matthew Philips

New interest in basements

2008-07-26T05:16:00.000-07:00

As more people are staying put in their homes, rather than selling and moving to a bigger place, the basement is becoming a more important living area. A recent survey says more people are remodeling this part of the home to make the most of every square inch of living space.

ServiceMagic.com, a company that connects home owners with pre-screened contractors, commissioned the survey. Results revealed that nationwide basement remodels rose 10 percent in the first six month of 2008 compared with the same period last year.The most popular uses for the space are spa-like bathroom retreats, children’s playrooms, workout areas, billiard rooms, and home offices.

With an average cost of $40 to $60 per square foot - or a base price of about $35,000 - basement remodels are far more economical than an addition, says Laura Sanchez, director of internal operations at McStain Neighborhoods, a home builder in Colorado.

Source: The Denver Post, Sheba R. Wheeler (07/17/2008)

Why "Energy Star Rated" for your home?

2008-07-09T04:31:00.000-07:00

Exerted from the US Gov't Energy Star web site:

A typical household spends about $1,900 a year on energy bills and contributes twice the amount of greenhouse gases to the environment as an average car. ENERGY STAR, the government-backed symbol for energy efficiency, can guide you in making your home more energy efficient, reducing high energy bills, improving comfort, and protecting the environment—whether you do it yourself or hire a qualified professional.

Improving energy efficiency with ENERGY STAR is also an important first step in the growing trend of “green remodeling.” That’s because the energy we use in our homes often comes from the burning of fossil fuels at power plants, which contributes to smog, acid rain, and global warming. So, the less energy we use in our homes, the less air pollution we generate.

What's involved becoming more Energy Star Rated?

Heat and Cool Efficiently- when replacing look for Energy Star rated systems.
Choose Energy Star appliances when initially purchasing or replacing.
Check Seal Air and Ductwork leaks.
Add more insulation in Attics (easiest and most cost effective to lower energy use).
Select high efficiency Hot Water Heater when replacing.
Select high efficiency windows/doors when replacing.
Replace lighting with florescent models.
Install a programmable thermostat.

Go to http://www.energystar.gov/index.cfm?fuseaction=home_energy_advisor.showGetInput for a free energy audit.

Why should "Going Green" matter to Home Sellers?

2008-06-26T04:17:00.000-07:00

Consumers are being forced to make changes in their lives and they are expecting the real estate industry to help them. They’re hearing ‘global warming,’ ‘glacier melting,’ ‘polar bear habitats,’ and they already know about rising gas prices and rising utility bills.

When they’re looking for housing, they are looking at many new factors. If there are two houses listed for about the same price, and one has a monthly utility bill of $280 and the other is $140, the consumer is going to want to know that difference and what’s accounting for that difference.

For years HUD, the Department of Energy, Bank of America, and Wachovia have had Energy Efficient Mortgages available, but most people don't know they’re out there; even mortgage brokers who have no idea that they’re available.

Also, in preparing a home for sale these days we need to consider a host of new issues:

If you need to paint that room, but be sure to use a paint that is low in toxins.
If the carpet needs to be replaced, be sure its low in toxins.”
If the Central Air/Heating or appliances need replaced make sure to use models that are Energy Star rated (especially hot water heaters & dishwashers).
If replacing plumbing fixture use low water usage units.
Are the windows and doors "low energy" units?
How do utility bills compare with similar homes?
Are window treatments consistent with saving energy?
Is there a programmable thermostat?

These are the kinds of features and items that will make a difference to buyers in the future. Whenever possible all repairs and/or renovations should include some or all the above considerations and documentation verifying same should be kept.

What's all this "Green" hype about

2008-06-17T06:11:00.000-07:00

We all see it on the news, read about it in the newspaper, see it on the Internet. Is "Going Green" the next big boom, Trend, or Fad, in the Building and Home Renovation industries?

Having been an avid recycler for a long time, I find this new interest in the environment refreshing. In an effort to help others be more aware about the next biggest change in our lives (my opinion), I will post several short articles intended to shed some light on the subject, and why it is so timely with today's $4/gallon gas prices and energy related products going sky high. Virtually, no one in our country is untouched by these events.

What is "Green" Let's start by defining what Green is: According to Wikipedia, the free encyclopedia,

"Green" building is the practice of increasing the efficiency with which buildings use resources such as energy, water, and materials; while reducing building impacts on human health and the environment, through better siting, design, construction, operation, maintenance, and removal — the complete building life cycle.

A similar concept is natural building, which is usually on a smaller scale and tends to focus on the use of natural materials that are available locally. Other commonly used terms include sustainable design and green architecture. The related concepts of sustainable development and sustainability are integral to green building.

Effective green building can lead to 1) reduced operating costs by increasing productivity and using less energy and water, 2) improved public and occupant health due to improved indoor air quality, and 3) reduced environmental impacts by, for example, lessening storm water runoff and the heat island effect. Practitioners of green building often seek to achieve not only ecological but aesthetic harmony between a structure and its surrounding natural and built environment, although the appearance and style of sustainable buildings is not necessarily distinguishable from their less sustainable counterparts.

Future posts will briefly describe how it will affect trends in real estate, and how we can all do more for our environment, and save $$$$ in utility bills at the same time.

Latest Boomer Home buying trends

2008-06-14T06:53:00.000-07:00

Baby Boomers already account for a large portion of home buyers today. It should come as no surprise, then, that Boomers may soon dominate trends in features and fixtures for new homes and even renovations.

A recent article in the Wall Street Journal explains, designers and architects are catering toward this fast-growing segment of the population. The influx of aging home buyers exhibit needs for wider halls and doorways for walkers and wheelchairs, and master suites and laundries on the ground floor so residents can avoid stairs (most builders offer 1st floor master models).

Now, the technology behind home appliances and fixtures is making all kinds of appliances and home electronics more senior-friendly. Some of the innovations appliance re-design include:

Stoves that monitor pots to prevent boiling over.
Adjustable typeface on appliance control panels.
Faucets that turn on and off with just a touch any where on the spout.
Dishwashers designed to be mounted at a more comfortable height.
Refrigerators with storage designed to reduce bending over (readily available now).
Adjustable volume/pitch of oven alarms.
There's even a toilet on the market with an electric-blue night light built in and a motorized heated seat cover that rises with the touch of a button.

These trends will certainly continue to evolve, as buyer average age advances and Boomer life style preferences emerge.

Why use a local lender vs. Internet nationwide firm

2008-06-12T07:02:00.000-07:00

First, simply put, buying a home in any market can be somewhat complex, and stressful for the inexperienced (or even the experienced) buyer. That's partly why it normally takes 30-45 days from time of contract signing to move-in. Thankfully, much of the activity is carried out behind-the-scenes by attorneys, lenders, etc.

Choosing the right professionals in the beginning is paramount, since much of the transaction involves the lender and associated contractors. Laws and regulations regarding property purchases vary significantly between states. The required documentation (often crucial in timing) varies widely as well. Late/wrong documents can delay or even prevent successful sales processing.

Since local office lender/brokers such as Chase, Wells Fargo, & in-house, offer competitive rates it's kind of a no-brainer as to why not use them. Since they operate daily in a specific area, they're always aware of local requirements (and recent changes) and documents. Hence they can offer smoother transactions and maximize the buyer's ability to get through the process with minimal risk and stress.

I've had clients have used out-of-town lenders in hopes of saving, only to find that there are hidden fees, and the overall cost for the loan to be as high or higher than that of a local lender.

Since, as Realtors, we don't get paid unless the deal goes through, its in our best interest as well, to suggest lenders with the skills and experience to secure a loan that is tailored to the buyer's needs.

Just as you choose a local Real Estate Agent to ensure proper area knowledge, you should work with a local lender for the same reasons. Ask your Realtor for a recommendation.

FHA loans are getting more popular

2008-06-12T06:12:00.000-07:00

As lenders toughen their standards, loans by backed the Federal Housing Administration (FHA)are increasingly popular. The number of FHA loans issued rose 126 percent in the first quarter of 2008, compared with the same period a year ago. Most of FHA's business now comes from refinancing.

The volume of FHA loans at Wells Fargo has increased 342 percent this year from the same time in 2007, says Greg Gwizdz, the company's national retail service manager. Helping increase business were live simulcasts for real estate professionals that the lender recently held in movie theaters nationwide touting the benefits of FHA loans. Only borrowers who can make at least a 3 percent down payment or have at least 3 percent equity in their homes and who can document their income can qualify for FHA loans.

Guy Cecala, publisher of Inside Mortgage Finance, says FHA paperwork remains daunting and the rates aren’t always the lowest. “But if your choice is vanilla ice cream or no ice cream, vanilla starts looking good," he says.

Source: The Washington Post, Dina ElBoghdady (06/10/08)

Sellers staying current with the market...ranking

2008-06-07T06:18:00.000-07:00

Everyone knows we continue to be in a Buyer's market, which is good if you're looking to purchase a home. For Seller's, there are a number of things to consider before planting the "For Sale" in the front yard, for which much has be written, including ranking.

Let's say, there at any one time, there may be 20-30 similar homes available in your area. You may not realize it, but all new listings are by nature quickly ranked by agents and perspective buyers. If your home makes the top 5 in that list the chances of your home selling quickly are greatly increased. If, however, you're at 10 or below it becomes very unlikely your home will sell early or if at all.

Furthermore, you might think that your ranking would automatically increase as higher ranking homes are sold. Not true; ranking doesn't really change as homes are sold since new listings come on the market every day. If you're 15 today, its likely you'll be 15 a month from now.

Prevention is always better than a cure. Increasing your ranking after-the-fact is hard to do, as lower ranking homes simply put get labeled as "house-worn" after the first few weeks and get a lot fewer reviews by online buyers and agents.

You might ask : How do I get in the top five in ranking? That part's really no mystery, go back to the basics:

1. Condition- every repair (roof, painting, landscaping, etc.) "MUST" be done before listing the property.

2. Price- It never makes sense to over price the property. Put the price right from the beginning. If possible have a Pre-listing appraisal (often can be discounted).

3. Staging-Listen to your professional real estate agent as to what buyers expect today. Remember the look of everyday living in a home is likely not the best look for selling. Over furnished rooms can, for example, make a room look small and less attractive. Kitchen cupboards should always be uncluttered.

In summary, nothing beats having your home priced and staged right for selling at the beginning of the selling process.

More in future posts.

Did you wonder how jobs affect housing

2008-05-06T04:47:00.000-07:00

Historically, one new home owner is created for every two new jobs in an area. That would imply that whenever 100 new jobs are created in your area there would be 50 more housing units needed.

It's easy to see why officials give so much priority to encouraging new businesses and ventures.

FHA loans may help ease mortgage crisis

2008-05-05T13:41:00.000-07:00

Potential home buyers may be hesitant as they start their hunt in today's market, but many quickly discover that their market is full of choices, sellers are becoming more willing to negotiate, and interest rates are still low.That's not to say there will be no setbacks. The hard part may come when they go shopping for a mortgage. Minnesota Mortgage Association President Tim Bendel said 100 percent financing has all but disappeared. He advises borrowers with good credit scores seeking a conventional loan to come to the table with at least a 5 percent down payment. Borrowers with credit scores below 700 may need a more significant 20 percent down payment.But there is help on that front. The answer for some buyers is a Federal Housing Administration (FHA) loan. Credit scores count less with FHA loans; the more important factor is whether the potential borrower has paid other bills on time, says Todd Johnson, CEO of Edina Realty Mortgage. FHA's government-backed loans require only 3 percent down and allow cosigners and gifts for down payments.Source: Star-Tribune, Kara McGuire (04/26/2008)

Higher FHA limits should help

2008-03-30T06:17:00.000-07:00

Thanks to the Economic Stimulus Act of 2008 that President Bush signed into law several weeks ago, the Federal Housing Administration (FHA) has temporarily increased its loan limits and can insure larger mortgages at more affordable rates in high cost areas of the country, HUD announced.
The new temporary loan limits, which range from $271,050 to $729,750, will give 240,000 more homeowners and buyers a safer, more affordable mortgage alternative for purchases and refinancing. The maximum amount of $729,750 will apply only to high-cost areas, such as New York, Los Angeles, San Francisco and Washington, D.C.

HUD also calculated new limits for Fannie Mae and Freddie Mac loans. FHA Commissioner/Assistant Secretary for Housing Brian Montgomery says, “Many families all over the U.S. will benefit from this access to credit, and increasing these loan limits will inject much-needed liquidity into the housing market.”

Curb appeal! The #1 item for quick home sales

2008-03-27T13:09:00.000-07:00

A survey of almost 500 real estate agents commissioned by JELD-WEN Windows & Doors indicates the increasing importance of curb appeal in selling a home.

According to the Real Estate Agent Community Trends survey, 82 percent of practitioners polled said buyers unimpressed with a home's exterior will not want to look inside. The results also found that 90 percent of respondents said a sale depends on first impressions of the front entry, while 91 percent said the home's exterior is just as important as what is inside.

Additionally, 75 percent of those surveyed said natural light is important; while the appearance of windows and doors and the presence of energy-efficient products were mentioned by 71 percent and 63 percent, respectively. Universal design features are gaining in popularity as well, according to 65 percent of agents.

Source: Building Online (03/18/08)

Buy now! Get ahead of the crowd

2008-03-25T05:48:00.000-07:00

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said.

“Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year

What do Buyers want most from a resale?

2008-03-23T05:29:00.000-07:00

This is a continuation of the preceding Remodeling Post.

When considering remodeling it's always nice to know which items will yield the most
"bang- for- your-buck", when you eventually sell your home. Why, for example would you want to convert a garage to extra living space, if that expense isn't easily recovered.

We all know remodeling costs can exceed tens of thousands, so its wise to evaluate each item against "need" and "resale value" as well. Of course, if you plan to stay in your present home indefinitely, then "need and budget" reign supreme; but remember the average time for Americans in a home is about 5-7 years.

The list below gives an estimate (by percentage) of typical Buyer's survey when considering a resale home and what really matters. According to Remodeling magazine’s 20Th annual Cost vs. Value Report, the top five mid range home improvements that bring the greatest returns are:

1. A deck addition, 85.4% of the buyers surveyed said this would be their #1 priority
2. Siding replacement, 83.2 %,
3. Minor kitchen remodel, 83%, new appliances, fixtures, etc.
4. Wood window replacement, 81.2%
5. Vinyl window replacement, 79.3%

Should I remodel or sell and buy up?

2008-03-19T08:08:00.000-07:00

There are many situations where a family needs a larger home, more bedrooms/baths, etc. The big question in these difficult economic times is whether to add on to your existing home or sell and buy a larger home?

The list below is meant to provide a short method for examining needs in dollars and cents against other factors.

1. First, how would the improvements affect your home's neighborhood ranking? Would the
improvements cause your home to be best in your neighborhood; if yes than you
might not be able to regain all your improvement costs in any future sale; if no than an
addition or remodel might be fine and actually raise your home's value as well. By the way
bathroom and kitchen improvements seem to add more to the home value than
other rooms. Basement finishing ,on the other hand, may not add that much to value.

2. If you plan to stay in your home for the long term than improvements may be the best
answer.

3. If you are wishing to upscale to a much nicer home you may consider selling and buying
since the higher priced upscale homes are plentiful and at bargain prices. Also, medium
price home prices have relaxed the smallest and are in general easier to sell.

4. Other factors- If school locations, family activities, hobbies-golf water, biking or other
family dictate relocation rather than improve than now may be the time to talk to a
real estate professional to see how they can help.

How is Delaware doing in home sales?

2008-03-06T06:31:00.000-08:00

Much has been written about how poorly homes sales nationwide were in 2007, and I'm sure the data is correct in what they said. When you consider that normal housing appreciation rates have been 3-5% for many years, the 2003-2006 period with rates of 10-20% were abnormal and clearly not sustainable, else ordinary families wouldn't be able to afford even a starter home shortly.

Central Delaware housing exhibited some decline in units sold and price in 2007 as most areas of the Country, but is clearly alive and well, with sold units equal to that seen in 2004. So far this year I am encouraged at the number of inquiries and pending transactions (buying and selling).

Clearly, real estate continues to be a good investment especially with the many bargains available, Also, if you stop to think about it, what other investment allows you to live in it and enjoy its benefits while it continually appreciates in value.

How does Delaware rank in Foreclosures

2008-03-05T10:38:00.000-08:00

Delaware provides many positive reasons for its residents to crow; not the least are lower taxes, lower cost-of-living and housing choices that speaks volumes. When you compare its real estate health against the Country it again shines. Maybe that's why so many are relocating here from the high tax states of the Mid-Atlantic and Northeast.

In 2007 Delaware recoded some 1441 foreclosures state-wide ,and is ranked 14th best(lowest) in the country as far as states with the lowest overall foreclosure rates. When you apply the fact that 3 out of 4 homes that are initially placed in foreclosure, don't actually complete the process, due to owner recovery, sale, etc. we can infer the numbers are actually even better.

In case you're wondering why, there are many possible reasons, but just look at unemployment; Delaware's unemployment rate (3.6% in December 2007) is significantly lower than the nation (5% for the same period).

More to come.....

This is the first of several posts to help put explore Delaware Real Estate in full perspective and why there is no better time to buy here

The Feds cut rates but mortgages don't follow; why?

2008-03-01T04:40:00.000-08:00

What can the Federal Reserve really do to effect the current mortgage rate?

Not that much!

We get excited when we hear something about the Fed lowering interest rates. It seems only logical that mortgage rates are immediately going lower too. A mortgage interest rate is not the same thing as the Fed rate.

Other names for the Fed rate are short term rates, prime, Fed funds rate. This interest rate is the one tied to your car loans, credit cards, and home equity lines of credit. Even though a home equity line of credit is considered a mortgage, it is amortized like a credit card. That is the only mortgage product affected by the Fed funds rate or Prime.

Mortgage rates are indirectly affected by the Fed moving rates. When the Fed makes a rate move it is felt by the investors. Some of these folks invest in mortgage backed securities. It is the mortgage backed securities that move mortgage rates up or down.

The Fed makes rate decisions on what is happening in the market. The unemployment number, consumer confidence, consumer price index, etc. are just some of the economic indicators that are used to decide if a rate change is needed.

These same indicators are what affect the mortgage backed securities which in turn affect mortgage rates. Every day the market is examined using the economic indicators and a rate is established for the mortgage backed securities.

This happens whether the Fed is active or not. A good indicator of where mortgage rates are going is by watching the 10 year bond. When there is bad economic news then that often means good news for the mortgage market.

Investors get nervous when a bad economic indicator shows up, and they take their money out of the stock market where they feel their money may be at risk and put it into a safer place like the 10 year bond. When money floods into the 10 year bond it drives the price up but the yield down. When the yield is down then current mortgage rates go down.

When there are good indicators and news the investors take money out of the 10 year bond and put it back into the stock market. They can make a better rate of return in the stock market then in the 10 year bond. When they feel safe that the economy is rebounding then the stock market is the place to be. The 10 year bond price goes down and the yield goes up so mortgage rates go up.

by Rob K. Blake author of the BUILD System

Secret #7 To save $$$ when buying

2008-02-29T06:10:00.000-08:00

Get informed ahead of time and...

Lastly, it's important to get financially informed and ready before actually starting to look at homes. Knowing how much you can afford is crucial in getting fitted with the right home. Finding the perfect home and then finding you can't may the payments without becoming house-poor is very disappointing at the very least. Given the cost of gasoline today its in everybodies interest to limit looking to the right price range.

Also, compare your reasons for moving
- needing larger home due to family growth
- needing to downside due to empty nest
- relocation to different area
- job change

What type of home works best? What are the current real estate trends?

After carefully weighing the needs of you situation, and your financing picture, there is one more important step. Select an experienced Realtor to represent your needs.

Our extensive and ongoing training is aimed to providing only the best service to all our clients.
A dedicated Realtor can provide great assistance throughout the entire home buying process from original thinking thru moving in, and beyond. Remember, the realtor's services are always free to you the buyer (at least for me), since the seller provides payment for our services through the listing agency. Having someone to represent you through the somewhat complex home buying process is a win-win situation.

I hope this series on saving money when financing and buying has been helpful. Please contact me at (800)643-7752 or don@dbullis.com if I can be of any assistance.