Realty Reality

Renters Often Unlikely Victims of Foreclosure

2009-11-15T22:04:00.001-05:00

When the foreclosure crisis first hit the U.S., many individuals and families living in rental housing were evicted without notice after the property they called home entered foreclosure. Often those tenants, who had been paying their rent on time, had no idea the property was in delinquency or facing foreclosure until they received notice to evict.

At a forum today during the 2009 REALTORS® Conference & Expo, a panel of experts discussed the impact, liability and ethical issues of foreclosure on single-family and multifamily rental housing to the property owners, managers and tenants. Data from the National Low Income Coalition show that nearly 40 percent of families facing foreclosure are renters.

“Realtors® build communities and are working to reduce the impacts of foreclosure on all community members – homeowners and renters alike,” said National Association of Realtors® (NAR) President Charles McMillan. “Our goal is to help keep people in their homes, but if a sale can’t be avoided, it’s important that rights of renters are protected as much as the owners.”

According to panelist Charles Achilles, vice president of legislation and research for the Institute of Real Estate Management, a new law signed into effect in May 2009 by President Obama, “The Helping Families Save Their Homes Act of 2009,” included provisions to protect tenants from eviction after their rental property enters foreclosure.

Under the new law, tenants must be given 90 days notice prior to eviction. Depending on state law, tenants are allowed to stay in the property through the end of their lease with two exceptions – if the new owner wants to occupy the property as a personal residence, or if no current lease is in place or there is a lease but state law allows the lease to be terminated at any time upon notice. Even under these exceptions, tenants must be given 90 days notice.

Achilles said a number of states have existing laws protecting tenants; however, the new law preempts existing state laws, unless the state’s law offers renters greater protection. The provisions of the law expire December 31, 2012.

Panelist Stan Mullin of California Real Estate Receiverships in Newport Beach, Calif., said there are many potential liabilities and ethical issues facing tenants and property managers during foreclosure.

Mullins said receiverships are incredibly beneficial and are used during disputes between two parties. Receiverships are appointed by the court and play an important role in protecting the property and the interests of the all parties.

According to Mullins, the benefit of real estate receiverships is that they work with the owners, tenants and property managers to ensure the property doesn’t become neglected and help all parties come to an agreement on the course of action. Receiverships typically last several months, but can extend for more than a year, until the loan is modified or the property is sold.

Panelist Gabe del Rio of Community HousingWorks in San Diego shared information on several successful initiatives to help owners and tenants during the foreclosure process, including free foreclosure prevention counseling and more than 50 community homeownership clinics that provide education, one-on-one legal and foreclosure counseling, and review of real estate and lending documents. To date, the clinics have helped more than 3,500 consumers.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

Home Composting

2009-11-15T21:31:00.006-05:00

Home composting can be an easy way for your household to make a direct positive impact on the environment. According to the Environmental Protection Agency (EPA), food residuals and yard trimmings account for 24% of the municipal solid waste stream in the United States. The EPA estimates that 56.9 percent of yard trimmings were recovered for composting or grasscycled in 2000, a significant increase from the 12 percent recovery rate in 1990.

What is Compost?

Composting, nature's own way of recycling, is the controlled decomposition of organic material such as leaves, twigs, grass clippings, and vegetable food waste. Compost is the soil amendment product that results from proper composting.

Natural composting, or biological decomposition, began with the first plants on earth and has been going on ever since. As vegetation falls to the ground, it slowly decays, providing minerals and nutrients needed for plants, animals, and microorganisms. Mature compost, however, includes the production of high temperatures to destroy pathogens and weed seeds that natural decomposition does not destroy.

Where to Compost?

Composting can be practiced in most backyards in a homemade or manufactured composting bin or simply an open pile (some cities do require enclosed bins). Businesses, schools, and other facilities can also easily compost. Contact your city or county government for information about free composting workshops and discounted or free composting bins.

Homemade bins can be constructed out of scrap wood, chicken wire, snow fencing or even old garbage cans (with holes punched in the sides and bottom).

Manufactured bins include turning units, hoops, cones, and stacking bins. These can be purchased from retail or mail-order businesses. Take the time to consider your options and then select a bin that best fits your needs.

What to Compost:

Eggshells
Coffee grounds and filters
Fruits and vegetables
Cardboard rolls
Grass clippings
Tea bags
Cotton rags
Dryer and vacuum cleaner lint
Houseplants
Leaves
Hair and fur
Hay and straw
Nut shells
Sawdust
Wood chips
Wool rags
Yard trimmings

What Not to Compost:

Black walnut tree leaves or twigs
Why? Releases substances that might be harmful to plants

Coal or charcoal ash
Why? Might contain substances harmful to plants

Dairy products (e.g., butter, egg yolks, milk, sour cream, yogurt)
Why? Create odor problems and attract pests such as rodents and flies

Diseased or insect-ridden plants
Why? Diseases or insects might survive and be transferred back to other plants

Fats, grease, lard, or oils
Why?Create odor problems and attract pests such as rodents and flies

Meat or fish bones and scraps
Why? Create odor problems and attract pests such as rodents and flies

Pet wastes (e.g., dog or cat feces, soiled cat litter)
Why? Might contain parasites, bacteria, germs, pathogens, and viruses harmful to humans

Yard trimmings treated with chemical pesticides
Why? Might kill beneficial composting organisms

Using Compost

It can take anywhere from 14 days to 12 months to produce your finished compost. The time it takes can vary widely depending on the materials and methods used. The point at which the compost is ready varies based on how the compost will be used. In general, though, compost is ready when dark and crumbly and mostly broken down with a pleasant, earthy, soil-like smell to it. For most uses it is acceptable to have some recognizable pieces of leaves or straw remaining.

Finished compost can be applied to lawns and gardens to help condition the soil and replenish nutrients. Compost, however, should not be used as potting soil for houseplants because of the presence of weed and grass seeds.

Commercial Real Estate Market Continues to Suffer from Credit Crunch

2009-11-13T22:09:00.000-05:00

A severe ongoing credit crunch in commercial real estate lending is hampering recovery, according to a commercial market update at the 2009 REALTORS® Conference & Expo. NAR Chief Economist Lawrence Yun shared insights into the commercial markets and the current lending environment during the “Economic Issues and Commercial Real Estate Business Trends Forum” here today.

Yun said the recent severe economic downturn and high unemployment continue to impact commercial real estate markets. “The commercial real estate market continues to struggle in this difficult economy, with rising vacancy rates and falling rents,” said Yun. “Commercial transactions and sales are down across the country from the virtual lack of available credit – banks are not lending and mortgage-backed securities are virtually nonexistent. The government needs to take action to relieve some of the lending pressure.”

According to Yun, the commercial real estate market price movement of the past 10 years closely mimicked the rise and subsequent fall of the residential housing market, even though commercial underwriting standards were far more prudent than those of residential subprime and other risky mortgage loans. Yun said in the current market the federal government is not backing commercial loans as it is for the residential home market.

While commercial REIT equity issuance increased recently because of positive increases in the U.S. stock market, the flow of capital into the commercial real estate market remains weak because lenders remain very reluctant to lend, said Yun. Data from Real Capital Analytics shows that the largest source of financing for commercial projects under $5 million is currently local and regional banks, which helped fund nearly 48 percent of recent transactions. Yun said there are many small regional banks that weren’t involved in risky lending in recent years and aren’t suffering from large amounts of loan defaults like some of the larger banks.

The lack of credit has also led to a dramatic increase in seller-financed transactions. This type of financing previously accounted for less than 1 percent of transactions; recently this number has jumped to nearly 13 percent.

Like the residential housing market, commercial defaults have dramatically increased among all property types, especially the retail and multifamily sectors – and Yun predicts that defaults will continue to rise for the next six to 12 months.

Yun estimates that $800 to $850 billion in commercial loans will mature in the next 2 years and will require refinancing. “Policymakers need to step in and address some of the continuing lending problems in the commercial real estate market by developing policy or regulations to help facilitate the refinancing of these large, looming commercial loans,” said Yun.

Yun ended his presentation with a prediction that the commercial real estate market could see more weakness before lending and transaction activity improves in mid- to late 2010.

“Despite all of the challenges in the market, I expect to see some modest improvement in commercial lending to small business owners and commercial projects next year as banks become more stable,” said Yun. “This could happen even sooner if the Federal Reserve stepped in with clearer rules and guidelines about refinancing commercial loans.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Kitchen Appliance Buying Guide

2009-11-12T07:48:00.005-05:00

New space-aged appliances have the American kitchen looking more and more like the bridge of a science-fiction spaceship. High tech innovations, upgrades to energy efficiency, sleek style enhancements and lowering prices all make new kitchen appliances appealing to a number of different types of consumers.

Home owners: Revitalizing your kitchen doesn’t necessarily require an expensive, full-scale remodeling project. Upgrading individual kitchen appliances can help refresh the style of the entire room while also enhancing your cooking experience. Obtaining financing on individual appliances is also easier than getting a home equity line of credit or other loan for a full-on remodeling project.

Sellers: In a slower housing market, making cost-conscious home improvements increases the likelihood of selling at or near your asking price. Which appliance is oldest or showing its age the most? Are there any common appliances that your kitchen lacks, such as a dishwasher? By focusing your spending on one major item of need, your home just might appeal to a wider range of buyers.

Buyers: When considering two otherwise comparable homes, typically the one with new kitchen appliances and furnishings will carry the higher asking price. You can certainly choose the newer kitchen, but you will essentially be paying part or all of the cost of that remodel, a remodel that may include stylistic touches you don’t care for and furnishings or appliances that are now available at cheaper market prices. As an alternative, buyers should consider the possibility of buying an older kitchen and upgrading some or all of the kitchen appliances with brand new models. Whether you’re looking to upgrade one appliance or re-do a whole kitchen’s worth of equipment, this buying guide will serve as an excellent primer.

Dishwashers

Of all kitchen appliances, dishwashers take more than their fair share of abuse. A new replacement dishwasher is welcome upgrade for almost any kitchen. If you are currently sink-and-sponging all of your dishes clean, you’ll find that a new dishwasher is time-saving and environmentally friendly (modern dishwashers use less water to clean dishes than hand-washing).

Style/Capacity: Dishwashers come in a number of different alignments and capacities. The right dishwasher for your kitchen will depend on the space you have available, the load needs for your household and the individual style of your kitchen.

24” Built-In – The most common installation, the 24” fits under a kitchen counter and has space for 10-16 place settings. Washers in this size have the widest range of features, options and prices.

Compact 18” Built-In – These smaller-capacity models are ideal for smaller kitchens or households with 1 to 2 occupants. The smaller capacity results in more efficient loads.

Portable – Portable dishwashers connect to the kitchen faucet, and can be stored out of the way when not in use. Available in both 18” and 24” configurations, they have the benefits of standard dishwashers with portable flexibility.

Two-Drawer Washers – Two-drawer setups allow for increased efficiency and flexibility. Each drawer can be operated separately, or they can be run simultaneously. The ability to run two different cycles at once allows for fle, while single-drawer usage allows for increased efficiency when washing smaller loads.

Energy efficiency: The overall efficiency of dishwashers has been greatly improved over the last decade. New dishwashers use less energy and water, saving you money in the long run. Models with the ENERGY STAR label exceed federal energy standards by 25% or more.

Stationary vs. adjustable racks: While most dishwashers have preset rack spaces, those with adjustable configurations allow provide greater flexibility when loading large or irregularly shaped dishes.

Delayed start: Many models allow you to set a delay on the load start time. By running the dishwasher during off-peak hours, you can take advantage of cheaper utility periods. Such units also allow you to maintain a quieter kitchen during the day.

Noise insulation: More insulation around the tub will reduce dishwasher noise, so check for units with thicker insulation.

Built-in food disposers: Many newer models feature food disposers that grind up food particles and flush them out with waste water, preventing food specks from being re-deposited on your dishes.

Cleaning Capabilities: Wash arms with smaller spray holes provide more scrubbing power. In addition, many dishwashers are equipped with multiple tiers and washer arms to better dislodge caked-on food.

Cycle types: in addition to regular wash cycles, many dishwashers allow specialty cycles designed to tackle specific dishes such as pots and pans, crystal, and fine china.

Finish and style: Dishwashers now come in a wide variety of materials, colors and finishes to better match your kitchen décor. Some unites come with fitted wood paneling to perfectly match your cabinetry, while others accommodate fully customizable front panels for an even more unique look.

Ranges and Ovens

Today’s range and oven combinations help can help everyone from the novice cook to the amateur chef create amazing meals in shorter times and with easier cleanup. When shopping for ranges and ovens, you should consider the size and design of your kitchen, the types of foods you most commonly cook, and the kinds of features that could make food preparation in your home easier.

Installation Type: Three basic styles of ranges are available. The range that best suits your kitchen will depend both on the kitchen design and the space/location available for the range unit itself.

Freestanding – Ranges with finished sides and a backsplash. Electric freestanding units typically have controls located on the backsplash, while gas models will have the controls located on the front.

Slide-in – These ranges have a built-in look with no backsplash, and controls located in front.

Drop-in – Drop-in models also blend seamlessly with the existing cabinetry, and may require custom cabinet modification for a tight fit.

Power Source: Aside from some exotic specialty models, most range and oven combo units fall into one of three power sources:

Natural Gas – Gas ranges provide a wide range of cooking power and precise cooktop heat controls.

Electricity – Electric ranges are energy efficient, and electric ovens are known for even, high quality cooking.

Dual-Fuel – These models feature a gas cooktop with electric oven. Such units require a higher initial investment, but combine the heating power of gas cooktops with the even cooking of electric ovens.

Cooking Surface: Both gas and electric range tops are available in a variety of cooking surfaces, including:

Coil – A common burner type in electric ranges that provides economical heat.
Ceramic-glass cook tops- Use radiant heat and are available in electric and some high-end gas ranges.

Open Burner – Common standard amongst gas ranges.

Sealed burner – An advanced gas range cooktop, sealed burners with upswept surfaces make cleaning easy.

Electric Range Features:

Energy efficient burners with selectable sizes.
Warming zones to keep food hot and fresh
“Hot surface” safety indicator lights
Gas Range Features:
Simmer and high-output burners
Pilotless ignition
Re-igniting burners
Dedicated griddle space

Ventilation options: Most ranges come equipped with standard overhead or “hood” ventilation, but some units utilize downdraft exhaust, eliminating the need for overhead ventilation equipment.

Oven Heating Type: New innovative heating systems have dramatically changed the cooking options available to consumers.

Conventional – Operating on either electricity or gas, conventional ovens feature one heating element for baking and roasting, and another for broiling.

Convection/European Convection – In addition to the standard bake and broil elements in the oven, a third heating element is located in the back of the oven near the fan.

Trivection – These ovens combine conventional, convection and microwave heating to create optimum cooking results in minimal time.

Oven Features: Some of the most popular oven features available today include
Self cleaning cycle.

Adjustable oven racks
Electronic controls and “auto-off” functionality.
Large display windows and strong interior lights
Warming drawers to keep food hot and fresh.
RefrigeratorsUsually the largest appliance in the kitchen, the refrigerator plays a central role in day to day cooking and kitchen use. Finding the right model for your household is a matter of evaluating space needs, style preferences and desired functionality.

Capacity/Size: Full-size refrigerators come in a wide variety of capacities. Large, family-sized units can feature upwards of 26 cubic feet of space. Two people generally need eight to ten cubic feet of fresh food storage. For each additional member of the household, add an extra foot to foot and a half of storage space

Configuration: Several different refrigerator designs are available, each of which offer their own advantages.

Top Mount -The freezer compartment is on top with the refrigerator located below. This is the most common design, and provides a spacious interior.

Bottom Mount - The freezer compartment is located underneath the refrigerator, often in a slide-out drawer. Commonly-used fridge items are easier to access without bending down. The refrigerator compartment may use either a single door or French door design.

Side by Side - The refrigerator and freezer compartments are adjacent. Both frozen and refrigerated foods are within easy reach, but the design may not accommodate larger items such as frozen pizzas or turkeys.

Compact Models - Scaled-down versions designed to fit into tight spaces or underneath counters. Though they have smaller capacities, they are ideal for dorm rooms, basements, offices or family rooms

Energy efficiency: Refrigerator units manufactured in the last few years are vastly more efficient than older models. Energy-efficient models help reduce utility bills. Models with electronic controls and digital displays make setting precise temperatures even easier, and many refrigerators feature advanced temperature regulation systems.

Adjustable shelves: The adjustability of shelving varies from model to model. Some allow you to move shelves up or down without being removed, while others provide the flexibility to adjust both the height and depth of any shelf.

Icemakers/ water dispensers: Icemakers have become a common feature, and the best are those that are integral to the door, leaving more space in the main freezer compartment for food. Many water dispensers also incorporate a water filtration unit.

Individual storage bins/crispers controls: Many fridges now allow you to customize the humidity and temperature settings for each storage and crisper bin, ideal for those who purchase a lot of fresh fruits and vegetables.

Reversible doors: Refrigerators with reversible doors allow customization for right-or-left handed access. These can also be useful for kitchens where the fridge area is tight against a wall or cabinet.

Style and finish: Ideally your refrigerator will be with you for many years, so it is important to pick a style that will match your kitchen design and compliment your changing tastes. Stainless-steel finishes are very popular, albeit slightly more expensive. Black, white, and bisque are the most common refrigerator colors, and trim kits are available that can make a freestanding unit appear more like a built-in model.

Microwave Ovens

If you use your microwave for more than just preheating or thawing, it might be time to upgrade your current model. Today’s latest versions come with a wide variety of settings and features that can let you cook entire meals in mere minutes.

Size: Microwaves now come in a variety of sizes and power levels. Choose a size that best fits both your counter/cabinet space and the sizes of cookware that you typically use in the microwave.

Compact - 18” wide x 12” high x 14” deep (less than .8 cubic feet capacity), 500-800 watts power;

Midsize - 20” wide x 12” high x 14”deep (.8 – 1.2 cubic feet capacity), 800-1000 watts power;

Large/full-size - are 20” wide x 12” high x 20” deep (.8 – 1.2 cubic feet capacity), over 1000 watts power

Built-in microwave spaces: Over-the range models are full size ovens designed to be placed above the stovetop, including a vent feature. These microwaves free up counter space and place the microwave at a convenient eye level. If your kitchen features a built-in microwave area for, make sure to accurately measure the space when comparing models, including some buffer room.

Convection: New combination microwave/convection ovens let you cook in either microwave only, convection only, or combination convection/microwave mode. The convection feature crisps and browns foods in ways that microwave cooking alone cannot.

Turntable: Turntables rotate food for more even cooking, and can be removed for easy cleanup.

Noise: If possible, test out the noise output of several models. Some powerful models can be fairly loud.

The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

Existing-Home Sales Surge in Many States in Third Quarter, Metro Prices Moderating

2009-11-10T19:31:00.000-05:00

Most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas, according to the latest survey by the National Association of Realtors®(NAR).

Total state existing-home sales, including single-family and condo, increased 11.4 percent to a seasonally adjusted annual rate1 of 5.30 million units in the third quarter from 4.76 million units in the second quarter, and are now 5.9 percent above the 5.01 million-unit pace in the third quarter of 2008.

Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C.

Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” he said. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”

During the third quarter, 123 out of 153 metropolitan statistical areas2 reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.

The national median existing single-family price was $177,900, which is 11.2 percent below the third quarter of 2008; the median is where half sold for more and half sold for less. Distressed sales – foreclosures and short sales – accounted for 30 percent of transactions in the third quarter, which continued to weigh down median home prices because they sell at a discount relative to traditional homes.

“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 5.16 percent in the third quarter from a record low 5.03 percent in the second quarter, but was dramatically lower than the 6.32 percent average rate in the third quarter of 2008.

The biggest sales gain between the second and third quarters was in North Dakota, up 42.3 percent; followed by Rhode Island which rose 26.5 percent; and Pennsylvania, up 25.6 percent.

The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2 percent from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3 percent to $115,600, followed by Oklahoma City, at $144,100, up 9.1 percent from a year ago.

“The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is,” Yun said. “The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable.”

Median third-quarter metro area single-family home prices ranged from a very affordable $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area in the third quarter was San Francisco-Oakland-Fremont at $538,100; followed by the Anaheim-Santa Ana-Irvine area of California at $498,800.

Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $70,700, and Lansing-East Lansing, Mich., at $86,600.

In the condo sector, metro area condominium and cooperative prices – covering changes in 55 metro areas – showed the national median existing-condo price was $178,000 in the third quarter, down 15.4 percent from the third quarter of 2008. Four metros showed annual increases in the median condo price and 51 areas had declines.

The metros experiencing condo price gains were San Diego-Carlsbad-San Marcos, at $215,100, up 13.3 percent; followed by the Cincinnati-Middletown area, up 2.0 percent to $119,700; the Toledo, Ohio, area, where the median price of $130,400 rose 1.7 percent from the third quarter of 2008; and the Indianapolis area at $114,400, up 0.8 percent.

Metro area median existing-condo prices in the third quarter ranged from $67,600 in Las Vegas-Paradise, Nev., to $432,800 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was New York-Wayne-White Plains at $297,500, followed by Boston-Cambridge-Quincy at $293,700.

Other affordable condo markets include Reno-Sparks, Nev., at $81,300 in the third quarter, and Jacksonville, Fla., at $91,600.

Regionally, existing-home sales in the Northeast surged 16.7 percent in the third quarter to a pace of 930,000 units and are 6.9 percent higher than a year ago.

The median existing single-family home price in the Northeast declined 9.4 percent to $244,500 in the third quarter from the same quarter in 2008. The best price gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8 percent from the third quarter of 2008; followed by Manchester-Nashua, N.H., at $237,600, up 2.6 percent; and the Pittsburgh area, where the median price rose 1.5 percent to $124,600.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: Data tables for both metro area home prices and state existing-home sales are posted at:www.realtor.org/research/research/metroprice. For areas not covered in the tables, please contact the local association of Realtors®.

Pending Home Sales Rise for Record Eight Straight Months

2009-11-02T19:26:00.000-05:00

Pending home sales rose again, marking eight consecutive monthly gains – the longest streak since measurement began in 2001, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in September, rose 6.1 percent to 110.1 from a reading of 103.8 in August, and is 21.2 percent higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.

Lawrence Yun, NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”

NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”

The Pending Home Sales Index in the Northeast slipped 2.0 percent to 83.6 in September but remains 16.9 percent above September 2008. In the Midwest the index rose 8.1 percent to 98.2 in September and is 17.8 percent higher than a year ago. In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008. In the West the index jumped 10.2 percent to 143.8 and is 23.7 percent above a year ago.

Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
A forecast for housing and the economy will be released November 13 at 11 a.m. PST at the 2009 REALTORS® Conference & Expo in San Diego. Existing-home sales for October will be reported November 23 and the next Pending Home Sales Index will be on December 1; release times are 10 a.m. EST.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Real Estate Cyber Tips - November 2009

2009-11-01T19:42:00.004-05:00

CYBER MAGIC TRICKS

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The information contained in Real Estate CyberTips is believed to be true and correct but no warranties or guarantees are provided and readers should rely solely on their own information and advisors in connection with any sites, services or products reviewed. All content Copyright 2009, RECS. All rights reserved.

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Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum

2009-10-23T23:06:00.000-04:00

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®(NAR).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 9.4 percent to a seasonally adjusted annual rate1 of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”

Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

NAR President Charles McMillan, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said.

“Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.

Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply2 at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.

The national median existing-home price3 for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price4 was $175,100 in September, down 11.7 percent from September 2008.

Regionally, existing-home sales in the Northeast increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price in the Northeast was $234,700, down 7.0 percent from a year ago.

Existing-home sales in the Midwest jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price in the Midwest was $147,600, which is 1.0 percent below September 2008.

In the South, existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price in the South was $153,500, down 7.6 percent from a year ago.

Existing-home sales in the West surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: NAR also reports monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, and is posted with other tables at: http://www.realtor.org/research/research/ehsdata. For information on areas not included in the report, please contact the local association of Realtors®.

1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.

3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

4Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for October will be released November 23. The next Pending Home Sales Index is scheduled for November 2. NAR’s quarterly report on metro area home prices and state home sales is on November 10; release times are 10 a.m. EST.

Federal Reserve Beige Book Report October 2009 Report

2009-10-21T19:17:00.000-04:00

Reports from the 12 Federal Reserve Districts indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels. Leading the more positive sector reports among Districts were residential real estate and manufacturing, both of which continued a pattern of improvement that emerged over the summer. Reports on consumer spending and nonfinancial services were mixed. Commercial real estate was reported to be one of the weakest sectors, although reports of weakness or moderate decline were frequently noted in other sectors.

Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered. For example, Dallas cited slight improvements residential real estate and staffing firms, while New York noted gains only in a few sectors (predominantly manufacturing and retail). Retail and manufacturing conditions were mixed in Boston, but some signs of improvement were reported. New York, Philadelphia, Cleveland, and San Francisco cited small pickups in manufacturing activity. In the Kansas City District, an uptick was noted in technology firms, while services firms posted revenue gains in Richmond. However, conditions were referred to as stable or flat for business services and tourism firms in Minneapolis and agriculture in St. Louis and Kansas City.

The weakest sector was commercial real estate, with conditions described as either weak or deteriorating across all Districts. Banking also faltered in several Districts, with Kansas City and San Francisco noting continued erosion in credit quality (often with more expected in the future). One bright spot in the banking sector was lending to new homebuyers, in response to the first-time homebuyer tax credit. Finally, labor markets were typically characterized as weak or mixed, but with occasional pockets of improvement.
Districts generally reported little or no increase to either price or wage pressures, but references to downward pressures were occasionally noted. While upward price pressures were generally subdued in most Districts, materials prices increased in Cleveland (mainly for steel) and Kansas City. Manufactured goods prices were flat to up slightly in Boston. Boston reported that in some market segments "product competition and customer clout are leading to downward pressure on prices." Minimal wage pressures were noted in Cleveland and Minneapolis.

In the Philadelphia (Third District) region, economic conditions have shown little change in recent weeks. Manufacturers, on balance, reported a small increase in shipments and a steady rate of new orders. Retailers indicated that sales picked up for the back-to-school shopping period, although there was little improvement compared with a year ago. Motor vehicle dealers indicated that sales declined from August to September as the federal "cash for clunkers" program terminated. Third District banks reported flat loan volume, overall, and further declines in credit quality. Residential real estate agents generally noted steady sales of existing homes. Nonresidential real estate leasing and construction activity declined. Business firms in the region reported mostly level input costs and output prices in September.

The outlook in the Third District business community remained subdued in September. Manufacturers forecast a rise in shipments and orders during the next six months, on balance, although most of those expecting gains believe that they will be slight. Retailers are generally cautious. Although some retailers see signs of rising sales in the fourth quarter, most believe consumers will continue to limit spending. Auto dealers expect sales to remain slow through the rest of the year. Bankers anticipate demand for credit to remain soft while business and consumer confidence continues to be fragile. Residential real estate contacts believe housing demand will continue to stabilize, but they do not expect significant improvement until some time next year. Contacts in nonresidential real estate expect leasing and construction to remain weak into 2010.

Source Beige Book

Click here for the Federal Reserve October 2009 Beige Book [Beige Book Archives]

See related blog articles:
Federal Reserve Beige Book For Economic Conditions (What is the "Beige Book"?)
The Federal Reserve - Making Sense In Plain English

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Effective Selling Of Your Property

2009-10-10T13:27:00.015-04:00

When marketing a property for a seller, I don't just "List and cross my fingers". My job is to move property. That is done by maximizing four primary factors, which effect how buyers will perceive a property's value.

To effectively sell a property, these four factors that must be adjusted to a maximum combination so that a sale can occur are:

Price, Condition, Terms and Location.

Who hasn't heard the phrase in real estate marketing, "Location, Location, Location"? While location is a critical component of real estate valuation, we usually can't change property location, but we can vary the other factors to some extent.

Terms can include credits (for repairs, updates, etc.), financing help (including seller assist at closing, private mortgaging of property, either as a primary or secondary loaner), allowing extended time to complete the sale, or any number of other concessions and incentives.

Property Conditions that can be addressed vary from repair of deteriorated aspects of property or replacements to remodeling and upgrading section(s) or all of the property (interior and/or exterior). Proper staging, including de-cluttering and rearranging spaces for maximum appeal, is also an important component of enhancing the condition of any property.

Market conditions also directly impact properties for sale: supply (and demand), competition (what other properties are offering at similar price point and/or value).

The bottom line: it always boils down in the end to price. A good price is one that is based on the value of the property as perceived by the buyer. There is always a price (assuming buyers exist) at which any property will sell in a reasonable amount of time. If the potential buyer sees good value for the price, he will take action to acquire it.

If none of the other factors can be adjusted significantly, then adjusting price is critical.

Of course, it doesn't do any good to maximize the four factors if no buyer is aware of that great property for sale.

I put a great deal of time, effort and expense in assuring that any property we list will be getting maximum exposure to the widest market of potential buyers (local, state-wide, regional, national and international). Our web sites are some of the tops in the industry, providing not just basic information, but also sophisticated, yet easy to use search, tracking and evaluation tools.

If a buyer exists, he will find the property that we list.

We work closely with sellers to obtain the best combination of the four factors based on current market conditions and reach the widest possible numbers of potential buyers.

Our goal is to obtain the best price that will yield a sale in the shortest possible time.

Visit my web site for more details about our experienced professional real estate services and support: LawrenceYerkes.com [NJ/PA]

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U.S. Foreclosure Laws

2009-10-09T16:13:00.000-04:00

Here is a link to the United States foreclosure laws site providing complete foreclosure information, by state.

Each state foreclosure page includes a summary of state foreclosure law as well as links to other foreclosure law resources.

United States Foreclosure Laws

Record Streak Continues for Pending Home Sales

2009-10-01T23:16:00.000-04:00

Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.

Lawrence Yun, NAR chief economist, said not all contracts are turning into closed sales within an expected timeframe. “The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month.”

The Pending Home Sales Index in the Northeast jumped 8.2 percent to 85.3 in August and is 12.0 percent higher than August 2008. In the Midwest the index rose 3.1 percent to 90.8 in August and is 7.6 percent above a year ago. In the South, pending home sales increased 0.8 percent to an index of 104.6 and is 8.2 percent above August 2008. In the West the index surged 16.0 percent to 130.5 and is 22.3 percent above a year ago.

“There is likely to be some double counting over a span of several months because some buyers whose contracts were cancelled have found another home and signed a new contract to buy,” Yun explained. “Perhaps the real question is how many transactions are being delayed in the pipeline, and how many are being cancelled? Without historic precedents, it’s challenging to assess.”

Yun also noted that the data sample coverage for pending sales is smaller than the measurement for closed existing-home sales, so the two series will never match one for one.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said first-time buyers need to act now. “Potential first-time buyers must make a contract offer very soon to have a reasonable chance of qualifying for the tax credit,” he said. “Congress needs to extend and expand this program because it’s stimulating the economy and reducing inventory close to price stabilization points.”

McMillan said a sizable number of homebuyers already in the pipeline could be let down because of the tight deadline. “We know there is a pent-up demand because sales are below normal levels for the size of our population. The faster we absorb excess inventory, the sooner we’ll turn the corner on home prices, prevent additional families from becoming upside-down in their mortgages, and give Wall Street the confidence to extend credit to other sectors,” he said. “Each home sale pumps an additional $63,000 into the economy through related goods and services, so the benefits of extending and expanding the tax credit far outweigh the costs.”

Yun said the forecast for home sales and prices depends very much on whether a tax credit is extended. “All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession,” he said. “Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for September will be released October 23; the next Pending Home Sales Index will be on November 2.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Existing-Home Sales Ease Following Four Monthly Gains

2009-09-25T10:41:00.001-04:00

Existing-home sales in August gave back some of their strong gain in July but remain above year-ago levels, according to the National Association of Realtors®(NAR).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 2.7 percent to a seasonally adjusted annual rate[1] of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4 percent above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2 percent.

Lawrence Yun, NAR chief economist, said the tax credit is working. “Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus. The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions,” he said. “Some of the give-back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can’t take a housing rebound for granted.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.19 percent in August from 5.22 percent in July; the rate was 6.48 percent in August 2008.

An NAR practitioner survey shows first-time buyers purchased 30 percent of homes in August, and that distressed homes accounted for 31 percent of transactions; both were unchanged from July.

“The recent trend shows broad improvement in most of the country, but with an expected rise in foreclosures over the next 12 months we need to maintain a healthy level of ready buyers to absorb the inventory. An extension of the tax credit is critical to preserve incentives for financially qualified buyers to enter the market,” Yun said.

He added that many buyers had been on the sidelines during the past few years, waiting for signs of stabilization. “Now that the market is showing some momentum, we have an opportunity to achieve a more rapid and broader stabilization in home prices. Extending and expanding the tax credit also would help to keep other families from becoming upside down in their mortgages or risk foreclosure,” Yun said.

“When home prices show sustained gains, credit will become more widely available to other sectors because Wall Street will be able to price risks confidently. Stable home values will also allow more families to purchase consumer products and provide a strong boost for the broader economy.”

NAR President Charles McMillan, said time is running very short for the existing tax credit. “Because it’s generally taking 60 days to close on a home after a contract is offered, buyers have little time to act to complete a purchase by the November 30 deadline,” he said.

“There’s no guarantee what Congress might do, so there’s really no time to waste. Since Realtors® have unparalleled knowledge of local markets, they can also advise first-time buyers on any additional state or local programs that might be able to offer them financial assistance, and help them close on a home before the tax credit expires.”

Total housing inventory at the end of August fell 10.8 percent to 3.62 million existing homes available for sale, which represents an 8.5-month supply2 at the current sales pace, down from a 9.3-month supply in July. Unsold inventory totals are 16.4 percent lower than a year ago.

The national median existing-home price[3] for all housing types was $177,700 in August, down 12.5 percent from August 2008. Distressed properties continue to downwardly distort the median price because they generally sell for 15 to 20 percent less than traditional homes.

Single-family home sales fell 2.8 percent to a seasonally adjusted annual rate of 4.48 million in August from a level of 4.61 million in July, but are 2.5 percent higher than the 4.37 million-unit pace in August 2008. The median existing single-family home price was $177,500 in August, down 12.1 percent from a year ago.

Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 620,000 units in August from a spike of 630,000 in July, but are 10.1 percent higher than the 563,000-unit level a year ago. The median existing condo price[4] was $179,300 in August, which is 15.7 percent below August 2008.

Regionally, existing-home sales in the Northeast declined 2.2 percent to an annual pace of 910,000 in August, but are 5.8 percent above August 2008. The median price in the Northeast was $241,100, which is 10.5 percent below a year ago.

Existing-home sales in the Midwest fell 6.6 percent in August to a level of 1.14 million but are unchanged from a year ago. The median price in the Midwest was $149,900, down 10.4 percent from August 2008.

In the South, existing-home sales were down 3.1 percent to an annual pace of 1.89 million in August but are 1.6 percent above August 2008. The median price in the South was $157,400, which is 11.0 percent below a year ago.

Existing-home sales in the West declined 2.7 percent to an annual rate of 1.16 million in August but are 7.4 percent higher than a year ago. The median price in the West was $220,500, down 12.2 percent from August 2008.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: Beginning with this report, NAR is including monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas. For information on areas not included in this report, please contact your local Realtor® association.

1 The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.

3 The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

4 Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for September will be released October 23. The next Pending Home Sales Index & Forecast is scheduled for October 1; release times are 10 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

Credit Crunch Constrains International Home Buyers in U.S. Market

2009-09-15T16:37:00.002-04:00

Interest in U.S. real estate by international buyers declined due to the worldwide recession and severe credit crunch, according to the 2009 National Association of Realtors®(NAR) Profile of International Home Buying Activity.

The share of Realtor® clientele who are foreign buyers is smaller than in previous years, but among those purchasing nearly half paid all cash – bypassing the mortgage process. Twenty-three percent of survey respondents served at least one international client in the 12-month period between the end of May 2008 and the end of May 2009, down from 26 percent in the 2008 study. During this period an estimated 154,000 homes were sold to foreign nationals, which is down from approximately 170,000 international transactions during the previous 12 months.

The median price for a home paid by foreign buyers for the year ending in May 2009 was $247,100, higher than the overall national price of $198,100 in 2008. A significant number, 45.8 percent of foreign buyers, paid cash for their property, in part because obtaining a mortgage was more difficult than in prior years. The total dollar volume was $38.7 billion.

Lawrence Yun, NAR chief economist, said recent improvements in the credit market will help reverse the slide in foreign buyers. “Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases,” he said. “In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States. Property investment here generally builds wealth over the long term.”

U.S. laws do not restrict or scrutinize most property purchases by foreign nationals. There are few barriers to owning property here, unlike transactions in many other countries, although immigration laws prohibit foreigners from remaining in the U.S. continuously for more than six months without a special visa. In addition, international investors are afforded the same property rights as those enjoyed by U.S. citizens.

The top five countries of origin for foreign buyers were Canada, with 17.6 percent of buyers; the United Kingdom, 10.5 percent; Mexico, 9.8 percent; India, 8.5 percent; and China, 5.4 percent. The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased.

Although most buyers were from North America, Europe and Asia, buyers from Latin America, Africa and Oceania also purchased U.S. real estate.

Foreign buyers were active in every state and the District of Columbia, with the most popular states being Florida, which accounted for 23.0 percent of all foreign purchases; California, 13.0 percent; Texas, 10.7 percent; and Arizona, 7.1 percent. These states are major gateways into the U.S. from other countries and also offer relatively mild climate.

California saw a notable rise in foreign interest as affordability conditions improved markedly in the state last year. “Florida is the most popular state for European and Latin American buyers, while Asian buyers are drawn to California,” Yun said.

The study shows 69 percent of international purchases were single-family homes, while condos accounted for 18 percent. Townhomes made up 8 percent of transactions, with commercial property at 4 percent. Nearly 46 percent of properties were in suburban areas and 25 percent in urban environments. The rest were evenly split between resorts and small towns or rural areas.

The prime purpose for purchasing a property in the U.S. is to use it for a vacation home, cited by 33.9 percent of respondents; for both investment and vacations, 23.5 percent; as a residential rental property for investment, 18.3 percent; and commercial property for investment, 3.5 percent.

The 2009 NAR Profile of International Home Buying Activity is based on responses from 3,785 Realtors® and describes international home buying activity in the U.S. over the 12-month period from the end of May 2008 to May 2009. The full report is available at www.realtor.org/research/research/reportsintl.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

IRS Deadlines Near for Expanded Business Loss Carryback Option

2009-09-11T16:29:00.000-04:00

Eligible taxpayers must act soon if they want to take advantage of the expanded business loss carryback option included in this year’s Recovery law. Click on the IRS link below for details

Deadlines Near for Business to Choose Expanded NOL Election; Sept. 15 for Many Corporations, Oct. 15 for Individuals

Source: IR-2009-79, Sept. 11, 2009

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

Federal Reserve Beige Book Report September 2009 Report

2009-09-10T16:12:00.001-04:00

Reports from the 12 Federal Reserve Districts indicate that economic activity continued to stabilize in July and August. Relative to the last report, Dallas indicated that economic activity had firmed, while Boston, Cleveland, Philadelphia, Richmond, and San Francisco mentioned signs of improvement. Atlanta, Chicago, Kansas City, Minneapolis, and New York generally described economic activity as stable or showing signs of stabilization; St. Louis remarked that the pace of decline appeared to be moderating. Most Districts noted that the outlook for economic activity among their business contacts remained cautiously positive.

The majority of Districts reported flat retail sales. Richmond, Philadelphia, Chicago, Atlanta, and Boston remarked that retailers continued to carefully manage inventories, keeping them in line with low sales levels. A majority of Districts confirmed that the "cash-for-clunkers" program boosted traffic and sales. Richmond, Atlanta, Chicago, and Minneapolis also noted increases or planned increases in automobile-related production. Most regions reported some improvement in residential real estate markets. Downward pressure on home prices continued in most Districts, although Dallas and New York noted that local prices were firming. Reports on commercial real estate suggest that the demand for space remained weak and that nonresidential construction-related activity continued to decline. San Francisco, Philadelphia, and St. Louis noted that the demand for nonfinancial services remained soft, although the pace of the decline was described as slowing in the latter two Districts. Loan demand was described as weak and many Districts reported that credit standards remained tight. Most Districts reported improvements in manufacturing production. For instance, Philadelphia, Richmond, Atlanta, Cleveland, and Chicago reported moderate increases in new orders. Labor market conditions remained weak across all Districts. However, staffing firms in Atlanta, Dallas, Richmond, Cleveland, Philadelphia, Boston, New York, and Chicago did report a slight pickup in the demand for temporary workers.

Wage pressures remained minimal across all Districts. Consumer prices were described as being steady in most Districts, although Kansas City and San Francisco noted some downward pressure on retail prices.

In the Philadelphia (Third District) region, economic conditions showed little change from July to August, although there were a few scattered signs of improvement. Manufacturers, on balance, reported a steady rate of shipments and a slight increase in new orders. Retailers indicated that sales of back-to-school merchandise had picked up, although the overall sales pace remained soft. Motor vehicle dealers indicated that sales of new vehicles rose from July to August, although they remained below the year-ago pace. Third District banks reported level loan volume, overall, and further declines in credit quality. Residential real estate agents generally noted steady sales of existing homes, although they noted that the sales rate remained below the year-ago pace. Nonresidential real estate leasing and construction activity continued to be slow. Service sector firms reported mainly steady activity at a slow pace. Business firms in the region reported mostly level input costs and output prices in August, although they noted some increases compared with July.

The outlook in the Third District business community was slightly better in August than at the time of the previous Beige Book. Although most contacts do not expect strong improvement in the immediate future, some now believe economic conditions are beginning to stabilize and that a slow pickup in activity might get under way in the near term. Manufacturers forecast a rise in shipments and orders during the next six months. Retailers are generally cautious, expecting only slight sales gains in the rest of the year. Auto dealers think sales will ease in the short term, but they believe that the sales rate might be better in the later part of the year than it was in the first half. Bankers anticipate demand for credit to remain soft as businesses and individuals continue to reduce indebtedness. Residential real estate contacts believe housing demand will continue to stabilize, although they expect only a slight improvement in market conditions during the rest of the year. Contacts in nonresidential real estate expect leasing and construction to remain weak during the rest of this year.

Source Beige Book

Click here for the Federal Reserve September 2009 Beige Book [Beige Book Archives]

See related blog articles:
Federal Reserve Beige Book For Economic Conditions (What is the "Beige Book"?)
The Federal Reserve - Making Sense In Plain English

IRS Web Site for Back-to-School Tax Breaks

2009-09-09T16:19:00.001-04:00

Click on the link below for information on various tax breaks for higher education may be found on a new Web section of IRS.gov.

Special IRS Web Section Highlights Back-to-School Tax Breaks; Popular 529 Plans Expanded, New $2,500 College Credit Available

Source: IR-2009-78, Sept. 9, 2009.

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land, Investment).

Real Estate Cyber Tips - September 2009

2009-09-01T19:46:00.001-04:00

CYBER MAGIC TRICKS

TRICK#1

ARE THEY TELLING YOU THE TRUTH?
Wouldn’t it be useful to know when someone in not telling you the truth? This interesting service uses technology has been evaluated by various governmental, security and law enforcement entities and it is easy to use and understand. Once you have your pin number you just dial the toll-free access number, put in your PIN and provide the destination phone number of the party to be analyzed. Once your call begins, you'll be able to engage in a natural conversation. A buzz is played when the called party is suspected of not telling the truth. In addition you can view a web-based dashboard to watch a truth indicator move as your subject is speaking. We usually lean toward programs that are free in this column – but this one ignited our curiosity – and the price/value ratio isn’t exorbitant!
Click Here for This Cyber Trick

TRICK#2

WALK AWAY FROM YOUR CELL CONTRACT!
Are you stuck in a cell phone contract and want to get out? Maybe you want to get a snazzy new phone that a different network is offering but have a year to go on your existing agreement – with a penalty that could cost up to $200 to cancel. These folks have a neat way to help you transfer your contract to another consumer for the remainder of the contract period. You are fully absolved of all responsibility and are free to initiate a new plan with a different carrier. This system also provides an incentive for those looking to start a wireless service plan with a short-term contract and no activation fees that otherwise could run as high as $45. Kiplinger liked this one. Maybe you can get that snazzy phone after all!
Click Here for This Cyber Trick

GREAT PLACES!

GREAT PLACE #1

TRACK YOUR WARRANTIES!
This happens to us all – and if it hasn't happened yet – it will -- guaranteed! You buy that great appliance, TV, cell phone – whatever. You get a warrantee (say 12 months). Then on the 368th day you decide to call and find out why the frober switch hasn’t been working for the last couple of weeks. You’re "outa luck"! These folks have a site that will help you avoid this type of dilemma and keep you on top of your warranties. They help you to organize your warranty information on anything you purchase. And you’ll get reminder emails at 3 months, 1 month and 1 week before your warranty expires. This way you can check your item to be sure it is in good working order. If it isn't you will have all the information needed, right in front you, to arrange for warranty service. Neat site ---and it's on the house!
Click Here for This Great Place

GREAT PLACE #2

SAVE ON YOUR SHIPPING COSTS!
Do you habitually fill out the usual form to ship your stuff to the next town -- or around the world? The Wall Street Journal says that to find the best shipping deals we would do well to check this shipping comparison site. Here you can check rates for your package with Google like ease by comparing the major carriers, including UPS, DHL, FedEx, and the U.S. Postal Service. Just enter your zip code and the zip code for the recipient plus the weight of the package. In a millisecond you’re looking at all of the options available with a neat cost comparison. Easy way to save—and the nice folks bring this service to you with their complements.
Click Here for This Great Place

The information contained in Real Estate CyberTips is believed to be true and correct but no warranties or guarantees are provided and readers should rely solely on their own information and advisors in connection with any sites, services or products reviewed. All content Copyright 2009, RECS. All rights reserved.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Pending Home Sales on a Record Roll

2009-09-01T16:12:00.000-04:00

Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index, [1] a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.

Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.

“Other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,” Yun said.

NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.

The Pending Home Sales Index in the Northeast declined 3.0 percent to 78.8 in July but is 4.7 percent higher than July 2008. In the Midwest the index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago. In the South, pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008. In the West the index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago.

NAR President Charles McMillan, said Congress needs to keep the momentum going. “Even with a good recovery taking place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices,” he said.

“To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy,” McMillan said.

Housing Affordability Index [2] stood at 158.5 in July, below the peak set in April but is still 36.0 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

Yun expects existing-home sales to rise through the fourth quarter. “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year,” he said. “However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,’ to ‘I don’t want to miss out on a recovery’.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

2 The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for August will be released September 24; the next Pending Home Sales Index will be on October 1.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Decline in Commercial Real Estate Sectors Appears to be Slowing

2009-08-19T17:34:00.003-04:00

Commercial real estate activity has suffered from a severe credit crunch for commercial sectors, sustained job losses and weak consumer spending, although the decline appears to be slowing. A forward-looking indicator shows commercial real estate will remain weak into 2010, but recent actions by the Federal Reserve should improve some flow of capital into commercial lending, according to the National Association of Realtors®(NAR).

The Commercial Leading Indicator for Brokerage Activity [1] declined 1.3 percent to an index of 101.5 in the second quarter from a downwardly revised reading of 102.8 in the first quarter, and is 13.7 percent below the 117.6 recorded in the second quarter of 2008. The index is at the lowest level since the first quarter of 1994; NAR’s track of the commercial leading indicator dates back to 1990.

Lawrence Yun, NAR chief economist, noted the pace of decline moderated, but the leading indicator has fallen sharply and quickly from the peak, suggesting much lower business opportunities for commercial real estate practitioners engaged in leasing, sales and property management. “The reduction in commercial real estate activity is expected at least through the first quarter of 2010. Any meaningful recovery is not likely to occur before the second half of next year.”

The decline is driven by falling industrial production, far fewer jobs requiring office and retail space, a fall in durable goods shipments, much lower personal spending, lower retail and wholesale sales, and a negative return on commercial investment.

“With the economic recession likely coming to an end within six months, a recovery in commercial real estate may soon follow,” Yun said. “The office sector requires job growth to fuel the demand for additional space, the industrial sector needs a rise in production and the retail sector is tied to consumer spending. Multifamily housing – the apartment market – often performs in reverse to trends in home sales, but can improve if there is sufficient household growth.”

The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, a separate attitudinal survey of more than 650 local market experts, [2] also suggests a lower level of business activity in upcoming quarters. Most respondents are seeing sales prices that are lower than replacement costs, and 96 percent report deep rental discounts and increased tenant concessions.

The SIOR index has declined for 10 consecutive quarters and stood at 36.0 in the second quarter, compared with a level of 100 that represents a balanced marketplace.

Realtors® Commercial Alliance Committee chair Robert Toothaker said it is crucial to improve the availability of funds for commercial loans. “Properties with positive cash flow have had trouble finding financing to roll over debt, transactions are essentially at a standstill and new development is virtually nonexistent in most areas,” he said.

“Commercial loans are mostly short term, and without ready financing even the most experienced commercial players can get into trouble. The Fed's recent decision to extend the TALF program for commercial mortgage backed securities beyond the end of 2009 is highly welcome because the flow of liquidity to commercial real estate will be critical for a sustainable economic recovery,” Toothaker said. “However, unless there is a tremendous short-term recovery in the CRE markets, we expect the Fed will be revisiting the issue of another extension of the TALF program early in 2010.”

Bond yields on CMBS rose following the announcement by the Federal Reserve on August 17 that it is extending TALF lending for existing commercial securities through March 31, 2010, and for newly issued CMBS through June 30.

Looking at the broad market, commercial vacancy rates continue to rise while rents decline, according to NAR’s latest COMMERCIAL REAL ESTATE OUTLOOK. [3] The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research.

Yun projects the unemployment rate to peak around 10.4 percent in the fourth quarter, then gradually improve as 2010 progresses. “We will need sustained economic growth before many employers have enough confidence to expand the job base and create new demand for space,” he said.

The gross domestic product should contract 2.9 percent in 2009 before growing 1.5 percent next year. Inflation, as measured by the consumer price index, is forecast to decline 0.5 percent this year before rising 2.0 percent in 2010.

Office Market

The office sector continues to suffer the most from job losses, which reduces the demand for space. Vacancy rates will probably increase from 15.5 percent in the second quarter to 18.8 percent in the second quarter of 2010.

Annual rent in the office sector is projected to fall 14.1 percent this year and 10.0 percent in 2010 after a 0.4 percent decline last year. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is estimated to be a negative 75.0 million square feet in 2009 and a negative 47.2 million next year.

Industrial Market

The contracting global economy has constricted the industrial sector. Vacancy rates are likely to rise from 13.0 percent in the second quarter of this year to 15.0 percent in the second quarter of 2010.

Annual industrial rent should fall 11.4 percent this year and another 11.7 percent in 2010, after declining 0.8 percent in 2008. Net absorption of industrial space in 58 markets tracked is seen at a negative 300.0 million square feet this year, and a negative 112.0 million in 2010. Because much construction in recent years was customized to meet specific industrial needs, many obsolete structures remain on the market.

Retail Market

Given a pattern of weak consumer spending, the retail vacancy rate is forecast to edge up from 11.7 percent in the second quarter to 12.9 percent in the same period of 2010. Average retail rent is likely to fall 6.1 percent in 2009 and 4.9 percent next year; it declined 2.0 percent in 2008. Net absorption of retail space in 53 tracked markets is expected to be a negative 25.9 million square feet this year and a negative 3.6 million in 2010.

Multifamily Market

The apartment rental market – multifamily housing – is facing higher home sales by first-time buyers, but also is experiencing increased demand from families who have lost their homes. Multifamily vacancy rates should slip from 7.4 percent in the second quarter of 2009 to 7.1 percent in the second quarter of next year.

Average rent is projected to decline 1.5 percent this year, then rise 0.8 percent in 2010, following a 2.9 percent gain in 2008. Multifamily net absorption is forecast at 168,300 units in 59 tracked metro areas in 2009 and 64,600 next year.

The COMMERCIAL REAL ESTATE OUTLOOK is published by the NAR Research Division for the commercial community. NAR's Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

More than 81,000 NAR and institute affiliate members offer commercial brokerage services.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 NAR’s commercial leading indicator is a tool to assess market behavior in the major commercial real estate sectors. That index incorporates 13 variables that reflect future commercial real estate activity, weighted appropriately to produce a single indicator of future market performance, and is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate.

The 13 series in the index are industrial production, the NAREIT (National Association of Real Estate Investment Trusts) price index, NCREIF (National Council of Real Estate Investment Fiduciaries) total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service.

NAR reviewed a wide variety of indicators, examined the relationships of indicators that demonstrated a historical impact on commercial real estate, and modeled a forward-looking index based on historic trends. Although individual indicators sometimes move in opposite directions, together they offer a better indication of future market activity.

Quarterly data for 13 selected series were reviewed back through the first quarter of 1990. The modeling demonstrated a change in commercial brokerage activity that could be seen two quarters later as measured by net absorption in the industrial and office sectors, and the completion of new commercial buildings as measured by the value of building construction put-in-place of office, warehouse, retail and lodging structures. An index of 100 is defined as the level of commercial real estate market activity during the first quarter of 1990, the first period to be analyzed.

2 The SIOR Commercial Real Estate Index, conducted by SIOR and analyzed by NAR Research, is a diffusion index based on market conditions as viewed by local SIOR experts. For more information, contact Richard Hollander, SIOR, at 202/449-8200.

3 Publication of additional analysis, including metropolitan data, will be posted under Economists’ Commentary in the Research area of Realtor.org in coming weeks.

The next commercial leading indicator index, forecast and market report will be released on November 19.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Creating the Right Curb Appeal - Do's and Don'ts of Preparing Your Home Exterior for Selling

2009-08-17T12:24:00.005-04:00

"You're ready to put a property on the market. Inside, it is beautifully decorated and sparkling clean. That bit of peeling paint on the porch and the bald spots in the flower beds won't bother prospective buyers, right? Maybe not..."

Check out this article prepared by our local MLS service to help increase the curb appeal of your listed property:

Creating the Right Curb Appeal

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]
and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Avoid Recalled Items

2009-08-16T20:14:00.000-04:00

When buying items on the Internet, you can minimized the risk of purchasing a recalled item by making use of the U.S. government's online recall resource website:

http://www.Recalls.gov/

According to the site, it's purpose is "To provide better service in alerting the American people to unsafe, hazardous or defective products, six federal agencies with vastly different jurisdictions have joined together to create www.recalls.gov -- a "one stop shop" for U.S. Government recalls."

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]
and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

2nd Quarter Existing-Home Sales Help by Metro Prices

2009-08-12T22:40:00.000-04:00

Existing-home sales in the second quarter showed healthy gains from the first quarter in the vast majority of states, and price declines have increased affordability in most metro areas, according to the latest survey by the National Association of Realtors®(NAR).

Total state existing-home sales, including single-family and condo, rose 3.8 percent to a seasonally adjusted annual rate1 of 4.76 million units in the second quarter from 4.58 million units in the first quarter, but remain 2.9 percent below the 4.90 million-unit pace in the second quarter of 2008.

Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises.

Lawrence Yun, NAR chief economist, said the sales gain appears to be sustainable. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said. “There have been sustained sales gains in Arizona, Nevada and Florida, as well as diverse areas such as Maryland, the District of Columbia and Nebraska. More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota and Montana.”

Yun explained housing’s impact on the overall economy. “Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy – that’s how the housing engine traditionally pulls us out of recession. In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy.”

During the second quarter, 129 out of 155 metropolitan statistical areas2 reported lower median existing single-family home prices in comparison with the second quarter of 2008, while 26 areas had price gains.

Distressed sales – foreclosures and short sales – accounted for 36 percent of transactions in the second quarter, which continued to weigh down median home prices because they typically are sold at a 15 to 20 percent discount; first-time buyers accounted for one-third of transactions. The national median existing single-family price was $174,100, which is 15.6 percent below the second quarter of 2008. The median is where half sold for more and half sold for less.

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage declined to a record low 5.03 percent in the second quarter from 5.06 percent in the first quarter; the rate was 6.09 percent in the second quarter of 2008.

NAR President Charles McMillan said there are unique opportunities in the current market. “Housing affordability is hovering near record highs and there’s a wide selection of homes, but first-time buyers need to move quickly to take advantage of the $8,000 tax credit because they have to finalize the transaction by November 30,” he said. “Various state, local and nonprofit programs target first-time buyers, and a Realtor® can help you identify the programs and financing options that are currently available in your area.”

The largest sales gain between the first and second quarters was in Idaho, up 67.5 percent; followed by Hawaii which rose 24.2 percent; New York, up 22.3 percent, Wisconsin; with a 21.7 percent gain; and Nebraska with a 20.3 percent increase. Twelve other states experienced double-digit sales increases from the first quarter.

Year over year, California, Minnesota and Michigan are showing double-digit gains from the second quarter of 2008 but are off from the first quarter of this year.

The largest single-family home price increase in the second quarter was in the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price of $113,200 rose 30.6 percent from a year ago. Next was the Cumberland area of Maryland and West Virginia at $123,500, up 21.7 percent from the second quarter of 2008, followed by Elmira, N.Y., where the median price increased 11.3 percent to $85,000.

“The sharpest price declines continue to be concentrated in metros with high levels of foreclosures, including areas in California, Florida, Arizona and Nevada, where distressed homes comprise many of the transactions,” Yun said

Median second-quarter metro area single-family home prices ranged from a very affordable $55,700 in the Saginaw-Saginaw Township North area of Michigan to $569,500 in Honolulu. The second most expensive area in the second quarter was the San Jose-Sunnyvale-Santa Clara area of California, at $500,000, followed by San Francisco-Oakland-Fremont at $472,900.

Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $71,500, and Lansing-East Lansing, Mich., at $81,200.

“Recently sold homes are concentrated in lower price ranges. The median price may not be representative of overall values in a given area because many middle priced homes are not on the market,” Yun clarified.

In the condo sector, metro area condominium and cooperative prices – covering changes in 57 metro areas – showed the national median existing-condo price was $176,900 in the second quarter, down 19.8 percent from the second quarter of 2008. Four metros showed annual increases in the median condo price and 53 areas had declines.

The metros with condo price rises were the Virginia Beach-Norfolk-Newport News area of Virginia and North Carolina at $195,000, up 2.6 percent, followed by the Wichita, Kan., area, where the median price of $109,500 rose 2.0 percent from the second quarter of 2008, Dallas-Fort Worth-Arlington, at $137,800, up 0.7 percent, and the Colorado Springs, Colo., area, which rose 0.2 percent to $145,200.

Metro area median existing-condo prices in the second quarter ranged from $66,400 in Las Vegas-Paradise, Nev., to $405,700 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was Honolulu at $318,400, followed by Boston-Cambridge-Quincy at $277,400.

Other affordable condo markets include the Sacramento-Arden-Arcade-Roseville area of California at $101,200 in the second quarter, and Tucson, Ariz., at $102,500.

Regionally, existing-home sales in the Northeast jumped 15.0 percent in the second quarter to a pace of 797,000 units but are 8.4 percent below a year ago.

The median existing single-family home price in the Northeast declined 9.7 percent to $246,000 in the second quarter from the same quarter in 2008. After Elmira, the best gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $115,400 rose 6.7 percent from the second quarter of 2008, followed by Syracuse, N.Y., at $124,600, up 0.8 percent.

In the Midwest, existing-home sales rose 3.2 percent in the second quarter to a pace of 1.06 million but are 5.3 percent below a year ago.

The median existing single-family home price in the Midwest was down 8.6 percent to $146,800 in the second quarter from the same period in 2008. After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Bismarck, N.D., where the median price of $157,800 was 3.5 percent higher than a year ago, followed by Springfield, Ill., at $116,200, also up 3.5 percent, and Topeka, Kan., at $113,300, up 2.7 percent.

In the South, existing-home sales increased 3.9 percent in the second quarter to an annual rate of 1.76 million but are 7.2 percent lower than the second quarter of 2008.

The median existing single-family home price in the South was $158,600 in the second quarter, down 10.3 percent from a year earlier. After Cumberland, the strongest price increase in the region was in Beaumont-Port Arthur, Texas, with an 11.0 percent gain to $138,600, followed by, Jackson, Miss., at $140,100, up 8.2 percent, and Shreveport-Bossier City, La., at $146,800, up 3.0 percent.

Existing-home sales in the West declined 2.3 percent in the second quarter to an annual rate of 1.13 million but are 11.8 percent above a year ago.

The median existing single-family home price in the West was $212,600 in the second quarter, which is 26.6 percent below the second quarter of 2008. The best metro price performances in the West were in Kennewick-Richland-Pasco area of Washington, where the median price of $163,900 rose 0.3 percent from a year earlier, and Yakima, Wash., at $162,800, also up 0.3 percent. No other areas covered in the region reported increases.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

Data tables for both metro area home prices and state existing-home sales are posted at:
www.realtor.org/research/research/metroprice.
For areas not covered in the tables, contact your local association of Realtors®.

1 The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing. NAR began tracking the state sales series in 1981.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

2 Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. A list of counties included in MSA definitions is available at:

www.census.gov/population/estimates/metro-city/0312msa.txt

Regional median home prices include rural areas and samples of many smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series was launched in 2006 with several years of historic data.

Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.

Third quarter metro area home price and state resale data will be released November 10.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

Uptrend Contining For Pending Home Sales

2009-08-05T12:33:00.000-04:00

Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®(NAR).

The Pending Home Sales Index,[1] a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.

Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said. “Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”

The Pending Home Sales Index in the Northeast rose 0.4 percent to 81.2 in June and is 5.8 percent above a year ago. In the Midwest the index increased 0.8 percent to 89.9 and is 11.6 percent above June 2008. The index in the South jumped 7.1 percent to 100.7 in June and is 8.9 percent higher than a year ago. In the West the index rose 2.9 percent to 100.4 but is 0.2 percent below June 2008.

NAR President Charles McMillan, is hopeful that a recently elevated level of contract cancellations will ease. “Last month, Freddie Mac and Fannie Mae clarified that appraisals should be done by professionals with clear local expertise,” he said. “This should mitigate the situation of many valuations done by out-of-area appraisers coming in below the price negotiated between buyers and sellers. Hopefully, in the months ahead, we’ll see an even closer relationship between contract activity and closed transactions.”

McMillan said NAR is continuing to press the appraisal issue. “We have asked Congress and the Federal Housing Finance Agency to immediately implement an 18-month moratorium on the new appraisal rules to further address unintended consequences of the new guidelines,” he said.

Housing Affordability Index [2] remains very favorable. The affordability index stood at 159.2 in June, down from record peaks in recent months but it remains 36.6 percentage points above a year ago. Under these conditions the typical family would devote 15.7 percent of gross income to mortgage principal and interest, well below the standard allowance of 25 percent.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record dating back to 1970,” Yun said. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”

A median-income family, earning $60,700, could afford a home costing $289,100 in June with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford. The affordable price was much higher than the median existing single-family home price in June, which was $181,600.

Yun expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder footing and inventory is gradually being absorbed.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

2 The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for July will be released August 21; the next Pending Home Sales Index will be on September 1.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research

Real Estate Cyber Tips - August 2009

2009-08-01T23:58:00.003-04:00

CYBER MAGIC TRICKS

TRICK#1

FIGHT BACK ON CREDIT CARD FEES!
Have you received a note in the mail recently informing you of new terms? With all of the craziness going on it’s hard to keep up with how the credit card companies are grabbing our hard earned dollars with all sorts of new fees and charges.This neat place will help you make sense from the movin’ and shakin’ going on. They research thousands of credit card offers and rates and rate the best credit cards. They provide a list of the top cards in each of several credit card categories along with an unbiased opinion on every card. In addition they compile the "Complete Credit Card Index" where you will find the current rates of all of the thousand plus credit cards available. Good stuff in this day and age!
Click Here for This Cyber Trick

TRICK#2

MAKE THE WEB TALK TO YOU!
This one is fun and can come in handy from time to time. Once this little program is downloaded and installed, you simply highlight any text you see on your internet browser. Then just right click and choose "speak text" ---and Shazam – the text is spoken aloud from beginning to end!It's easy to use and gives you a personal reader any time you want to rest your eyes! Oh, and yes, it's on the house.
Click Here for This Cyber Trick

GREAT PLACES!

GREAT PLACE #1

GIVE YOUR DOCTOR A CHECKUP!
Do you have a great Doctor? Or maybe your last visit was a horror show. Here's the place to let folks know about the good ones and warn them about the clunkers. Just type in your Doctor's (or Dentist's) name, location and specialty (not all are necessity unless your Doctor has a very common name). Up comes information on the Doctor plus any patient ratings that have been entered regarding knowledge, helpfulness and punctuality. Even the Doctor's staff gets rated.There are lots of additional tools at this great place – and, unlike many similar sites, there is no cost to use this service. This is worth a bookmark!
Click Here for This Great Place

GREAT PLACE #2

CHECK HOLIDAYS AROUND THE GLOBE!
Traveling this year? Want to find out what the holidays and cultural events are at your destination? This neat resource lists over 200 counties along with a calendar of holidays celebrated there during the year. You can search for holidays and celebrations around the world in several categories including country or by date. These folks define a "holiday" as any day that recognizes a cultural event, and not necessarily a day when businesses are closed. You’ll be looking for this the next time you plan a trip!
Click Here for This Great Place

The information contained in Real Estate CyberTips is believed to be true and correct but no warranties or guarantees are provided and readers should rely solely on their own information and advisors in connection with any sites, services or products reviewed. All content Copyright 2009, RECS. All rights reserved.

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