The national home supply is falling, down to its lowest levels since December 2008.

In June, there was 9.4 months of supply, down from a year-ago level of 11.0 months.  It’s one more sign that the housing market may be mending itself.

Housing supply is an important metric because home values across every U.S. market are rooted in Supply and Demand.  When the supply of available homes outpaces buyer demand, home values tend to fall.  And, by contrast, when homes are relatively scarce, values tend to rise.

We’re still a long way from historical averages, but dwindling home inventory may be one reason why the national median sale price rose by $7,000 last month. 

A reduction in inventory may also explain why two other popular home value metrics — the government’s Home Price Index and the private-sector’s Case-Shiller Index — are each showing signs of a rebound, too. 

However, before we get too excited, it’s important to remember that home sales of late have been spurred by low mortgage rates and by the First-Time Home Buyer Tax Credit.  A real estate trade group says first-timers represent 29 percent of the market, for example.

But so long as rates remain low and buyer stimulus is in place, we can expect that the recent trends in real estate will continue.  Inventory should continue to drop and prices should start to rise. 

Therefore, if you’re planning to buy a home in the next 12 months, buying sooner rather than later may be a smart way to save on your next home.

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If you’re going to put your home on the market soon, now is the time to start thinking about your curb appeal. And the physically largest part of a yard is often the grass. Crappy grass does not invite people into your property.

But here’s a free class:

The Home Depot is offering a seminar on April 26, 1-2 at all stores. You can register in person or online at www.homedepotclinics.com.

A report published Tuesday showed that home values fell nearly 3 percent in January 2009 versus the month prior and by 19 percent from last year.

On the surface, data from the study looks like more bad news for housing.  With deeper inspection, though, we uncover reasons to discount the report’s finding.

For one, the report includes home price data from just 20 cities around the country — and they’re not the 20 most populated cities, either. 

For example, data from #4-ranked Houston is not included and neither is #7 San Antonio nor #10 San Jose. #54 Tampa, however, is included.

Secondly, the report is two months lagging. 

Published March 31, its data is only accurate as of January and a lot has happened in the last 2 months. This includes a record-drop in interest rates and the introduction of an $8,000 tax credit for qualified first-time home buyers.  The stimulus has helped raise home sales volume on both new homes and previously-owned ones.

And lastly, one more reason to question the relevance of the Case-Shiller report is that a government study on the same topic showed home values rising over the same period, not falling.  According to the Federal Housing Finance Agency, home values grew 1.7 percent from December 2008 to January 2009.

In the end, home values are a local phenomenon that can’t be summarized as a national “summary”.  National data can be helpful for watching longer-term trends, but it shouldn’t be used to make a “Buy or Not Buy” decision.

For that, talk with a real estate professional with access to local data instead.

Source
List of United States cities by population
http://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

(Image source: LA Times)

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People are crazed for waterfront property - and probably no place more than lake-filled Minnesota.

But taxes are taking the fun out of cabin life. Jeff Forester, a cabin lobbyist, is hoping that legislators will help regular folks continue to make lakeside memories. There is a bill making its way down the halls of the Capitol that would allow cabin owners to pay HALF taxes now and the remainder would be paid by their family members who eventually buy the cabin down the line.

This move could prevent regular folk cabin owners from having to sell the property to get out from under the tax burden.

It’s hard to see the State going for any tax breaks with budget shortfalls all around, but we’ll have to wait and see.

Mortgage delinquencies are on the rise nationwide, but the news may not be as bad as it appears at first glance.

Using anonymous data from its national credit database, TransUnion reports that 4.58 percent of American homeowners were at least 60 days past due on mortgage payments last quarter.

Comparing the statistic to the data from a year ago, the credit reporting agency goes on to say that mortgage delinquencies are up 53 percent.

Although fair, the comparison carries a distinct, negative connotation because if we flip the data to its positive, the statistics don’t seem nearly as menacing.

Consider: In the last quarter of 2008, 4.58 percent of homeowners were delinquent on their respective mortgages.  The positive sign, therefore, is that 95.42 percent of homeowners were not delinquent on their home loans.

Furthermore, in looking at TransUnion’s data for the 5 largest states in the Union, it’s clear that the national delinquency rate is being skewed by California and Florida.  New York and Texas, for example, exhibit delinquency rates below the national 4.58 percent marker.

North Dakota’s delinquency rate hovers near 1 percent.

Headlines are designed to attract eyeballs and nothing else. To get the complete story, therefore — the real story — it never hurts to dig a little deeper into the facts.

(Image courtesy: TransUnion)

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The stimulus package wasn’t just filled with goodies for buyers of homes. People staying in homes get some serious encouragement to weatherize with the government picking up 30% of the tab up to $1,500!

Here’s the skinny on windows as provided by the Andersen Window site:

As part of the Economic Stimulus package, the American Recovery and Reinvestment Act of 2009 modifies and extends federal tax credits for eligible building components that improve energy efficiency.  To be eligible, windows, doors and skylights must have both a U-Factor equal to or less than 0.30 and a Solar Heat Gain Coefficient (SHGC) equal to or less than 0.30.

How to qualify for the Tax Credit:**

1. Purchase a qualifying window withU-Factor and SHGC of 0.30 or lower.
2. Save your sales receipt and each window or door performance label (NFRC/ENERGY STAR® label)
   with your tax documents.
3. Purchase and install qualifying products beginning January 1, 2009 through December 31, 2010
   and meet all other requirements outlined in the federal tax code.
4. Claim the tax credit associated with your qualifying purchase on your Federal filing for the 2009 and/or 2010 tax year.
5. Woot!

Everything old is new again.

Conforming mortgages are limited by loan size, based on “typical” housing costs around the country.  The current conforming limit on a single-unit property is $417,000.

In 2008, as part of the Economic Stimulus Act of 2008, Congress authorized conforming loan limits increases in “high-cost” areas around the country.  In Los Angeles County, for example, a mortgage could be as large as $729,750 and still be considered “conforming”.

Those temporary increases rolled back effective January 1, 2009, to a maximum of $625,500.

However, as part of the American Recovery and Reinvestment Act of 2009 signed into law this week, conforming loan limits in high-cost areas have been returned to their elevated levels of 2008. 

You can see the text on the bottom of page 111 of 407.

Changes to conforming loan limits impact everyone with a stake in real estate, even if their neighborhoods are not considered “high-cost”.  This is because conforming mortgages offer the widest selection of home loan products, and often at the lowest rates.   The widespread availability of conforming mortgages helps to support home sales nationwide as well as providing ample refinancing options for people that need it.

Lenders have yet to pick up the change, but are expected to shortly.  Once they do, more homeowners will be eligible for cheap home financing.

To lookup your neighborhood’s conforming loan limits, visit the HUD Web site.  Or, if you have specific questions related to your home or an upcoming purchase, contact me directly anytime.

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In Mesa, Arizona, Wednesday, the President presented the Homeowner Affordability and Stability plan, a multi-pronged effort to support the housing market.

The story made the front page of nearly every newspaper in the country.

The president’s plan is sweeping:

1. Incent mortgage servicers to work with at-risk homeowners before delinquency starts
2. Let homeowners with good credit but little equity refinance to today’s low rates
3. Fund Fannie Mae and Freddie Mac to support mortgage markets

It’s a broad plan with many positive angles, but for now, we can’t forget that it’s just a plan.  Although the White House shapes and influences housing policy, Congress, Loan Servicers, and the Federal Agencies must still implement and execute it.  Until that implementation occurs, these reforms exist only on paper.

It’s a key aspect of the speech that’s not getting coverage. 

One thing we learned during the stimulus package debate was that just because the President wants something to happen doesn’t mean that it will.  There are always details to be worked out and that’s one reason why the Homeowner Affordability and Stability Plan couldn’t go into effect immediately.  There are still loose ends to tie and details to define.

According to its website, the White House lists March 4, 2009 as the plan’s effective date.  Until March 4, therefore, nothing in Wednesday’s speech is guaranteed.

(Image courtesy: Birmingham News)

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Alright I have heard about this two places now - including the Star Tribune - so I guessing it’s officially a trend.

If you search “house for sale” on YouTube you get over 3,000 listings. “A Home for Sale”  search gives over 4,000 videos.  Folks are posting videos of their for sale homes on-line. And not only are they filming their home, the owners are even in the video hawking its features.

Some even have “hosts” walking you through a home, which seems to me less desperate than having the owners themselves doing it.

And the upside of all this is YouTube is, of course, free. So for very minimal expense people can take a virtual open house - but lighting and such count for a lot.

Does this interest you? Love to hear from you.

The American Recovery and Reinvestment Act of 2009 was signed into law Tuesday in Denver, Colorado.  Also on Tuesday, stock markets fell near their November 2008 lows.

The two moves are related.

With each new stimulus; with each potential jumpstart of the economy, Wall Street questions whether the federal push will be enough to make an impact. 

Traders ended undecided on that issue yesterday, but resolute in something else — that whatever change stimulus bill brings, it’s not going to come fast enough to help.

The sell-off in equities was a boon to home buyers.  For the first time since early-December, mortgage markets gave a sustained rally, extending gains from the 8:30 AM market open through the 4:00 PM market close. Conforming mortgage rates were down on the day. 

Longer-term, though, it’s not likely that pattern will last.  Not only will the stock market eventually find balance, but, more importantly, there was verbiage in the stimulus bill that increased the nation’s debt ceiling by 53.4 percent. Debt, of course, is often financed with the printing more money and that leads to inflation.

Inflation is the enemy of mortgage rates.

So, for now, the stimulus plan is helping mortgage markets, albeit indirectly. If you’re shopping for home loan, consider locking quickly.  When markets flip — and they always do — it figures to be sudden.

(Image courtesy: Recovery.gov)

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