The Wall Street Journal is reporting that after years of expensive homes the decline in home prices is making buying more financially appealing than renting.

Nick Timiraos writes, “Now, after two years of rapid home-price depreciation, the relationship between the cost of rental payments versus after-tax mortgage payments is tilting toward ownership in a number of metropolitan areas.”

So that is good news that could get more renters out from under landlords to being king of their own castles.

If you don’t have near perfect credit, it can be hard to refinance. Also if you have an unusual type of dwelling - say a cave - banks aren’t in the whimsical mood they were just a few short years ago.

These are the factors facing a St. Louis family who built their dream home in a cave. ABC news is reporting that despite have a 50% down payment on their home, the family is unable to find a lender to refi their cave before their $80K balloon payment is due.

It’s a case of thinking a little too far outside of the box. Personally, I’m rooting for them - well, I guess I’m rooting for all of us in this slow recovery period.

Many more photos here.

Location is the first rule in house hunting, even when the home itself is a sweetheart.

The one weekend we don’t have our kids, my husband decides to drag us aboard the house hunting roller coaster again. We liked the house we saw, we really did. Had a great view, updated kitchen and a ferocious efficiency of space. It had that “Not so Big House” thang going on, using long site lines to great a sense of volume. And did I mention it had a killer lake view?

It wasn’t in a horrible neighborhood, but it wasn’t a great one either. Here’s a few things we did to help us make this big decision.

1. Used the free Crime Mapping Site: We entered the address and looked at the number and types of crimes in the area.

2.  Walked the neighborhood at night just to see how it made me feel. Would I want to walk a smallish dog here? Did it have sidewalks - and did neighbors take the trouble to shovel them?

3. Used a blog network: I’ve mentioned before that when you’re thinking of moving into an area try to find an area blog where people chat it up. I’ve been posting on a local blog for a while and felt comfortable sending a message to a fellow poster asking for the skinny. Turns out she had lived one block away from where we were looking and chose to move when she had children.

4. Drive the neighborhood in the morning to see how many kids are making their way to school.

When we did all this, it was clear this wasn’t going to a place that held its value like Edina has during the recession.  And since location is the name of the Real Estate game, this truly wasn’t the house for us.

But it’s still an exciting time for looking and we’re still scouring the ads and bending our agent, Tom’s, ear. We just have to be patient.

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.

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

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)

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

Alright, I looked at a house yesterday that had only been on the market for a week.

The MLS listing only shows exterior shots…and the open house had 17 people at it.

A friend who had a house on the market for several months accepted an offer yesterday.

This seems incredible. There’s a change in the air - people are out snoofling homes and finding 5% or better loans available.

The whole thing feels really hopeful.

Are you hopeful?

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.

I recently got a question on Trulia from a prospective buyer who is moving to our fair state this August.  She informed me that they were relocating here for a short period of time (4 Yrs) and wanted to buy in an area where the home they purchase would at least maintain its value over that time, or even (god forbid) appreciate a little bit.

My first instinct was to tell her to buy in Southwest Minneapolis or Edina.  Turns out my instincts were correct, but I wanted to back it up with facts and data.

Going back 7 years, below is the average sales price for Edina, MN.

           YEAR              AVG Sales Price

1. 2008                 $528,724
2. 2007                 $490,257
3. 2006                 $502,437
4. 2005                 $450,131
5. 2004                 $402,321
6. 2003                 $396,287
7. 2002                 $353,081

The % change from 2007 to 2008 was an increase of 7.8% and from 2002 to 2008 Edina’s Average Sales Prices went up 49% making Edina the best performing community in the Minneapolis Metro Area…for sustaining consistent appreciation.

NOTE:  I researched this information on the Minneapolis Area Association of Realtors Website: www.mplsrealtor.com and to see the full report - click here historical-average-mpls.pdf

And, while the homes are more expensive - it is a safe bet, that you can buy a home in Edina, and not lose.  (Most of the time.  There are always exceptions for every rule.)

But - if you are in the market to buy in Edina - then you can see a complete list of active homes  by clicking here.

A coat of paint is the cheapest way to make a huge impact on your home before it hits the market. But choosing colors can be overwhelming, especially when you’re facing the climbing wall-sized paint section at the hardware store.

Fortunately there’s a new book perfect for folks looking to do their own staging. It’s called Neutral Color Schemes from Firefly books available for $29.95 (or 19.77 on Amazon).

It offers over 200 palette suggestions with a main color and 4 accent colors for trim, pillows, curtains and the like to give a room a pulled together look.

Another nice feature is that it purse/man-bag sized so you won’t ever have to face the paint swatch section alone again.

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)

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com