What can your dollar buy you today?

Index raises risk of home price decline in Dallas area to just over 50% | Dallas Real Estate News | News for Dallas, Texas | Dallas Morning News

Index raises risk of home price decline in Dallas area to just over 50% | Dallas Real Estate News | News for Dallas, Texas | Dallas Morning News

Mortgage Rates Fall But Stay Above 5%

McLEAN, Va. – Rates for long-term mortgages dropped this week but still remained above 5 percent, mortgage financier Freddie Mac said Thursday.

The average rate on a 30-year fixed-rate mortgage was 5.07 percent this week, down from 5.21 percent a week earlier, a survey by Freddie Mac said. Last week's average rate for a 30-year fixed mortgage had been the highest since mid-August, when it was 5.29 percent.

Rates had dropped to a record low of 4.71 percent in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended at the end of March, but the Fed left the door open to reviving the program if the economy weakens.

"After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low," said Frank Nothaft, Freddie Mac's chief economist.

This week, the average rate on a 15-year fixed-rate mortgage was 4.4 percent, down from 4.52 percent last week.

Rates on five-year, adjustable-rate mortgages averaged 4.08 percent, down from 4.25 percent a week earlier. Rates on one-year, adjustable-rate mortgages dipped to 4.13 percent from 4.14 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The Associated Press

First time buyer tax credit extended, Not exclusive to first time buyers anymore

Local market from my perspective

From Thanksgiving to the end of January, the Real Estate Market has typically been very slow. This year is no exception.

Not to say that I haven't been selling, just selling a lot less than I normally do. The economy overall has been taking a pounding. Enough to shut down car manufacturers for short time periods which I never thought would happen.

When buyers are cautious about buying a sweater, television or even a car, can you imagine their thoughts about buying a house? We are all in this market together so I'm sure you understand where I'm coming from.

The good news for our market is #1. House prices in our market have not taken a beating. Are we down a little in value? Sure. But it is a slight correction and our home prices are stable and sound and have paved the way for #2. We have a strong job market. Business is moving out of high priced areas and coming to places where cost of living is much less. Dallas is the 3rd strongest market right now behind Seattle and Houston. #3. Business relocation will continue to bring new buyers into our market and builders have slowed with oversupply. This should start healing the balance between supply and demand.

Call me and lets talk your real estate needs through. Thanks JJ.

$7,500 tax credit for first time homebuyers

Housing price changes

Percentage change in home prices in June 2008 compared to year earlier in each market.
Atlanta -8.1%
Boston -5.2%
Charlotte -1.0%
Chicago -9.5%
Cleveland -7.3%
Dallas -3.2%
Denver -4.7%
Detroit -16.3%
Las Vegas -28.6%
Los Angeles -25.3%
Miami -28.3%
Minneapolis -13.9%
New York -7.3%
Phoenix -27.9%
Portland -5.8%
San Diego -24.2%
San Francisco -23.7%
Seattle -7.1%
Tampa -20.1%
Washington -15.7%
20-city composite -15.9%
SOURCE: Standard & Poor's and Fiserv

Dallas housing, while slumping slightly, is still one of the strongest housing markets in the country. For more information about your home either call me or sign up for my market snapshot service.

Market Snapshot-what's your home worth?

Danger of buying a house FSBO....

What are the dangers of buying a house FSBO

-You'll probably overpay for the house without an agent
-The seller probably won't disclose what he legally needs to disclose and theres no one there to make him
-Comps for the area where you are buying figure in real estate commissions...
-Peronsality with FSBO get in way of negotiations in many instances
-Good Realtors can negotiate better terms for their buyer clients
-Buyin a house (scheduling inspections, escrow, managing process is a full time job etc.)

There are exceptions to these....however, consider, I just met with a couple that bought a FSBO 2 years ago....the seller never disclosed that the house had serious foundation problems....the buyer didn't know to look....did my listing presentation and told them they needed to have someone look at the foundation and the bill comes to over $12,000...long story short, they are going to get to save up for foundation repairs on a house that they overpaid for 2 years ago....

Same goes with people that go into the builder...a good agent who sees real estate EVERYDAY (not a friend who's trying to break in the business, or a gal in Sunday school that does it on the side) is worth their weight in commissions....BUT, you have to find a good agent...a buyers agent works on your behalf and owes you fiduciary responsibility throughought the transaction....

Analysts: U.S. mortgage defaults to accelerate, peak in a couple of years

07:24 AM CDT on Monday, August 4, 2008
Associated Press

The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.

Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults.

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.

The mortgage troubles have been exacerbated by an economy that is still struggling. Reports last week showed another drop in home prices, slower-than-expected economic growth and a huge loss at General Motors. On Friday, the Labor Department reported that the unemployment rate in July climbed to a four-year high.

While it is difficult to draw precise parallels among various segments of the mortgage market, the arc of the crisis in subprime loans suggests that the problems in the broader market may not peak for another year or two, analysts said.

Defaults are likely to accelerate because many homeowners' monthly payments are rising rapidly. The higher bills come as home prices continue to decline and banks tighten their lending standards, making it harder for people to refinance loans or sell their homes. Of particular concern are “alt-A” loans, many of which were made to people with good credit scores without proof of their income or assets.

“Subprime was the tip of the iceberg,” said Thomas H. Atteberry, president of First Pacific Advisors, a investment firm in Los Angeles that trades mortgage securities. “Prime will be far bigger in its impact.”

In a conference call with analysts last month, James Dimon, the chairman and chief executive of JPMorgan Chase, said he expected losses on prime loans at his bank to triple in the coming months and described the outlook for them as “terrible.”

Delinquencies on mortgages tend to peak three to five years after loans are made, said Mark Fleming, the chief economist at First American CoreLogic, a research firm. Not surprisingly, subprime loans from 2005 appear closer to the end of defaults than those made in 2007, for which default rates continue to rise steeply.

“We will hit those points in a few years, and that will help in many ways,” Fleming said, referring to the loans made later in the housing boom. “We just have to survive through this part of the cycle.”

Good day!

This has been a strong week for finding new buyers. Unfortnatley, I have talking to many vendors connected to the real estate business and many of them are struggling to make ends meet.

We continue to see a number of full time agents having to get part time jobs, title companies closing, lenders losing loan officers and inspectors getting out of the business.

Depending on who you talk to, the current real estate trends could take from 2 to 4 years to recover. It may not recover to the significance of before any time soon. The foreclosures are going to be affecting our market for at least the next 10 years.

Sellers need to continue to have patience when selling their home. It will sell if it is priced correctly and is in appropriate condition.

Precarious pricing

If you follow the trends these days, you just might follow them into a ditch. It’s been said time and time again, but it’s constantly discussed, and for good reason. Pricing a home too high in a lulling (or falling) economy is quite simply counterproductive for all parties involved. The seller can’t seem to sell their home. The buyer can’t find a home within their parameters. And the real estate agents involved might not even make a commission. So no matter who you are in this equation, try to combine your optimism with realism and price your home accordingly.

Open house announcement

Please visit my open house at 3301 Heritage in Melissa.

Saturday March 29, 2008 from 12 to 3 p.m.

Dallas Morning News Spotlight on real estate market in Melissa!

I mentioned last week about the Dallas Morning News quoting me in an article. As promised, I found the link.

You can click HERE to read more on the market in Melissa, TX.

I was quoted in this weekends Dallas Morning News

On Sunday afternoon, a family friend called me and said that I was in the newspaper. I had done an interview with the Dallas Morning News last week. The premise of the story surrounds the city where I live, Melissa Texas.

If you would like a copy of this article, please email me or call me. I will try to link a copy of the article to my blog this week.

2214 Royal Oaks, Irving, Texas

This beautiful starter home is in move-in-condition. Mature landscaping, recent interior paint upgrades, large bedrooms, ceramic tile and a huge secondary living area are just some of the amenities that make this home one of the best values in the area. The seller is also willing to pay up to $3,000.00 of the buyers closing costs with a full-price offer in addition to the many amazing features that this light, bright and airy home has to offer. Priced to sell at $135,000.00.

U.S. real estate a 'bargain' for foreign buyers

Many paying cash as dollar falls in value
Wednesday, January 23, 2008
By Tom Kelly Inman News

Two years ago, while attending a home-builder convention in Orlando, Fla., a top-producing local real estate agent was bubbling over the interior design features of a vacation home.
"All of my international buyers are just going to love this," the agent said. "I can't wait to tell them what's now available."
I was intrigued. How many international buyers did she have?
It turned out that more than 60 percent of the agent's clients were buyers from overseas. And, she is not the only real estate professional cultivating the foreign market. According to the National Association of Realtors, 65 percent of Florida Realtors had at least one international customer, and the trade group's "Profile of International Home Buying Activity" indicated that at least 7 percent of home sales in Florida were to foreign purchasers.
"When you consider how the U.S. dollar has slid in value compared to other international currencies, you begin to understand why investors are purchasing real estate in this country," said Mitch Creekmore, senior vice president of Stewart Title Co. "Real estate prices here are a bargain compared to many areas in western Europe and Asia."
The currency environment probably played a major role in the proportion of foreign buyers who paid cash for their homes. The cash group (28 percent) was much greater than that of the general U.S. home buyer population (8 percent). In addition, international buyers who can afford a home abroad often are from wealthier households with higher monthly incomes and cash reserves. Also, the tax benefits of mortgage-interest deductions may not apply -- depending on the buyer's home country's tax code -- which lowers the incentive to take out a mortgage.
Buyers come from around the world to buy different types of properties at various prices. They plan on using the U.S. property for different reasons. Here are some common factors from NAR:
The typical international buyer purchased a single-family home or townhouse. The primary purpose in purchasing the home was as a vacation venue for family and friends.
The median sales price paid by the typical foreign buyer was $299,500, and the purchase was financed through a mortgage loan.
The typical foreign buyer in the U.S. spends 4.2 months in his or her U.S. property. U.S. visa rules allow nonresidents (unless under a student or work visa) to remain in the country for only six months. Because foreign buyers are nonresidents of the U.S., most of them plan to spend less than six months in their U.S. home. A small percentage -- 6 percent -- spend less than two weeks. Forty-four percent intend on using their U.S. property for one to six months.
While the top three state destinations for foreign home buyers in the NAR study were Florida, California and Texas, significant overseas buyers surfaced in all areas of the country. Dolly Lenz, a New York City residential specialist who led all salespersons with $748.3 million in gross sales in 2007, reported that approximately 35 percent of her customers were second-home buyers and about 50 percent of that group lived outside the U.S.
The median price foreign buyers paid for a home was $299,500 in 2006 -- significantly greater than the national median sales price of $221,900. More than 20 percent of international buyers purchased a home that cost between $200,001 and $300,000. Fourteen percent of foreign home buyers paid more than $750,000 for their U.S. property, according to the NAR study.
Among international clients, the top five countries of origin were Mexico, the United Kingdom, Canada, India and China. Although more than two-thirds of Realtors report that their international clientele accounts for about the same level of business during the past five years, fully a quarter of them indicate that their international business has increased. Despite the recent slowdown in the U.S. housing market, U.S. real estate is still a popular option for many people outside of the country.
Foreign buyers from the United Kingdom and China paid the most for their U.S. property -- a median of $335,000 and $340,000, respectively. Those from Mexico paid the least -- $227,300. Buyers from Canada were more likely to have purchased homes priced over $1 million. The median price of homes purchased by Indian buyers -- $292,000 -- was closest to the overall median price paid by all foreign home buyers.
The American dream of home ownership is more popular than ever -- especially overseas.

Refi applications climb 16.9%

Refi applications climb 16.9%
Lower rates fuel rush, but tighter credit could deny many
Wednesday, January 23, 2008
Inman News
Applications for home loan refinancings jumped by double digits last week as interest rates continued to fall, the Mortgage Bankers Association reported today.
The group's market composite index, a measure of home loan application volume, got an 8.3 percent boost last week on a seasonally adjusted basis from the second week of January as refinance applications climbed 16.9 percent during the period. Filings for purchase loans, however, fell 4.6 percent, MBA reported.
Since the beginning of November 2007, refinance applications have risen 92 percent and purchase-loan applications are up 7 percent, according to Jay Brinkmann, MBA's vice president of research and economics. "With tighter credit conditions we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40- to 80-basis-point drop in rates we have seen since Nov. 2 across products."
Borrowing costs on all loan products sank again last week, as the average contract interest rate on 30-year fixed-rate mortgages fell to 5.49 percent from 5.62 percent; the average rate on 15-year fixed loans dropped to 4.96 percent from 5.07 percent; and average rates on the one-year adjustable-rate mortgage (ARM) tumbled to 5.51 percent from 5.77 percent.
Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.07 on the 30-year loans, 1.22 on the 15-year, and 1.01 on one-year ARMs. These points include the origination fee and are based on loan-to-value ratios of 80 percent.
According to MBA, the refinance share of applications increased to 66 percent last week from 62.7 percent the previous week, and the ARM share grew to 9.3 percent from 9.2 percent.
The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

Mortgage rates mixed

Long-term mortgage interest rates were either flat or slightly higher Thursday, and the benchmark 10-year Treasury bond yield fell to 3.62 percent.
The 30-year fixed-rate average edged up to 5.43 percent, and the 15-year fixed rate stayed at 4.93 percent. The 1-year adjustable rate was up at 5.3 percent.
The 30-year Treasury bond yield dropped to 4.25 percent.
Rates and bonds are current as of 7:15 p.m. Eastern Standard Time.
Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.
In other economic news, the Dow Jones Industrial Average plummeted 306.95 points, or 2.46 percent, finishing at 12,159.21. The Nasdaq tumbled 47.69 points, or 1.99 percent, closing at 2,346.9.
Stock figures are current as of 7:30 p.m. Eastern Standard Time.
***

Shh! Don't tell anyone....this is our secret!

Local builder announces their intent to leave Texas

An area home builder has announced their intent to withdraw their homebuilding venutres in the State of Texas.

With these plans, the homebuilder is having a blow out "fire sale" to get all their inventory sold within the next 30 days.

This is great news for local buyers who can capitalize on instant equity. Homes with hard surface counter tops, ceramic tiles, stainless appliances and large and open floorplans are up for sale at drastic discounts.

In one instance, there was a 2700 sf home listed at $240k sold to a lucky buyer for only $170k. Don't miss out on this great opportunity. Call 972-254-2011 for more information.

Cedar Hill Residential Lot