HGTV’s FrontDoor.com Identifies Top 10 Real Estate Predictions for 2010

(BUSINESS WIRE)--With some subtle signs of recovery in the housing market, the real estate industry is due to bounce back – but more challenges could lie ahead for buyers and sellers alike. HGTV’s FrontDoor.com identifies the top 10 must-know real estate trends for the coming year: (http://www.frontdoor.com/top10)

#10: Cash is king. All-cash offers will become even more popular for foreclosures and short sales, as banks would rather get less money than deal with the hassles of loan transactions.

#9: Smoother short sales. As lenders and real estate professionals become more accustomed to short sales (sales in which the proceeds are less than the outstanding debt), the process will become more streamlined and successful for all parties involved.

#8: Tricky appraisal rules. Due to the government’s Home Valuation Code of Conduct passed in May, property appraisals will be more expensive and take longer, sometimes hindering (or breaking) real estate deals.

#7: A conflicted construction market. Though lenders are still reluctant to finance new housing projects for builders, there’s a chance of double-digit increases in new construction next year (according to the McGraw-Hill Construction Outlook Report).

#6: Rising mortgage rates. The Fed’s effort to keep mortgage rates at historic lows is scheduled to end in March. Homebuyers should act now to capitalize on the lowest interest rates in years.

#5: Lending standards still tight. With the subprime mortgage debacle in recent memory, lenders will continue to require stellar credit and thorough documentation from borrowers.

#4: Some stabilizing home values. Nationally, the outlook for home values is good, with a rise in home prices during the last two quarters of 2009. Locally, however, many markets are a long way from full recovery.

#3: More foreclosures to come. Though more homes will go into foreclosure in 2010, some homeowners will be able to lease back their property at market rental rates for a year’s time, allowing more people to stay in their homes longer.

#2: More buyers entering the market. The government’s first-time homebuyer tax credit was extended to April 30 and to a broader range of buyers, which should bring even more buying activity to bear.

#1: Still a buyer’s market. As 2010 looks to be another year of low home prices and a robust inventory of homes for sale, it will still be the best opportunity for buyers to cash in on some great real estate deals.

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Bankrate: Mortgage Rates Remain Near Record Lows

/PRNewswire/ -- The average conforming 30-year fixed mortgage moved a touch higher from 5 percent to 5.01 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.39 discount and origination points.

The average 15-year fixed mortgage set a new record low of 4.46 percent while the larger jumbo 30-year fixed rate inched lower to 6.02 percent. Adjustable rate mortgages posted mixed results, with the average 3-year ARM jumping to 4.77 percent and the 5-year ARM sinking to 4.52 percent.

Mortgage rates are at ultra-low levels because the Federal Reserve isn't showing any indication of raising interest rates soon and because investors around the globe maintain a healthy appetite for debt backed by the U.S. government. The demand for government debt and federally guaranteed mortgage-backed securities have kept bond prices elevated and held bond yields down. Mortgage rates are closely related to yields on government and mortgage-backed debt. However, there are no guarantees about how long mortgage rates will remain near record lows.

Mortgage rates are nearly one full percentage point lower than one year ago. This time last year, the average 30-year fixed mortgage rate was 5.92 percent, meaning a $200,000 loan would have carried a monthly payment of $1,188.83. With the average rate now 5.01 percent, the monthly payment for the same size loan would be $1,074.87, a savings of $114 per month for a homeowner refinancing now.

SURVEY RESULTS
30-year fixed: 5.01% -- up from 5.00% last week (avg. points: 0.39)
15-year fixed: 4.46% -- down from 4.47% last week (avg. points: 0.32)
5/1 ARM: 4.52% -- down from 4.54% last week (avg. points: 0.30)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. The majority of panelists, 62 percent, expect mortgage rates to head higher and just 7 percent predict lower rates. Nearly one in three, or 31 percent, forecast that rates will remain more or less unchanged over the next 30 to 45 days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI

To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/

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Housing Prices Continue to Decline Nationwide

(BUSINESS WIRE)--IHS Global Insight, the world's leading company for economic and financial analysis and forecasting, today released the third-quarter 2008 update of the U.S. housing valuation analysis, House Prices in America, showing that single-family U.S. home prices fell at a faster pace across a wide area of the country — after moderating earlier in the year — and are now 6.5% below their 2007 peak. House prices fell at a 6.9% annualized pace, affecting 241 of the 330 analyzed metropolitan areas, up from 150 metro areas in the second-quarter 2008. For the United States as a whole, the housing market is now slightly undervalued. When weighted by market value, the nation is 3.8% undervalued; when weighted by housing units, it is 5.7% undervalued.

While the contraction in residential real estate value is national in scope, it is most severe in the Southeast and Southwest, areas which were among the most overvalued in the country three years ago. According to the third-quarter analysis, extreme overvaluation is now "essentially nonexistent" — only three metro areas met the definition of extreme overvaluation, down from a peak of 52 metro areas in 2005. Only the Pacific Northwest remains overvalued.

According to the analysis, the overhang of unsold properties trending downward during the third quarter, and demand picking up slightly, the accelerated pace of depreciation likely reflects financing conditions that became increasingly stringent and expensive during this period. Recent policy responses, from the Federal Reserve in particular, to purchase mortgage-backed securities are not likely to have a significant impact until next year.

Home prices fell more than 10% in the third quarter in nine central California communities. The Central Valley communities of Merced, Stockton, and Modesto have seen property values fall to less than half their 2005 value. Twenty-nine metro areas in California, Florida, and Nevada — at one time among the most overvalued — have seen price declines in excess of 30%. Similar steep price drops are also occurring in Michigan, northeast Ohio, the southern metro areas from Charlotte to Atlanta, as well as in New England.

The incidence of extreme overvaluation has become negligible; only Atlantic City, New Jersey; Bend, Oregon; and St. George, Utah met the criteria. Overvalued markets are mainly located in the Pacific Northwest, extending to Utah. Southern metro areas from Mississippi to Texas remain generally undervalued.

Jeannine Cataldi, senior economist and manager of IHS Global Insight's Regional Real Estate Service, added, "Weak economic conditions and wary consumers continue to hold the housing market back. Although many areas are seeing home sales increase, it is largely due to foreclosure homes being snapped up at significantly discounted prices. As the inventory of these homes is removed from the market, prices will remain on a downward path."

James Diffley, group managing director of IHS Global Insight's Regional Services Group, said, "With no end in sight to the downward spiral of house prices, it is likely that long anticipated market correction will now overshoot fundamental valuations on the downside.”

The House Prices in America study, a joint effort by IHS Global Insight and National City Corporation, examines the top 330 U.S. real estate markets, representing 78% of all existing housing units and 86% of all related real estate value, to determine what home prices should be, accounting for differences in population density, relative income levels, interest rates, and historically observed market premiums or discounts. Markets with valuation premiums above 35% were deemed at risk for price corrections based on the typical degree of overvaluation that preceded the 79 known local market price declines observed since 1985.

House Prices in America combines a statistical model originally developed by Richard DeKaser, Chief Economist at National City Corporation (www.nationalcity.com/housevaluation) with data largely developed at IHS Global Insight. More information on IHS Global Insight's housing valuation analysis is available at www.globalinsight.com/housingvaluation.

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I’ll Buy Yours and You’ll Buy Mine - New Trend Sparks Win-Win Situations

RISMEDIA -Today’s market has made the prospect of buying a home a difficult task for most people. Whether you are in the market for a first home, a retirement home or something in between, a home trade may be your best option to get what you are looking for in a timely manner.

Home trading is not a new concept, but one that is often overlooked “as people don’t take the time to understand the process, one that is quite simple,” says Scott Warren, an agent with Villa Sotheby’s International Realty.

Warren, who has been in the industry for over 30 years and completed his first trade in 1979, recently orchestrated a real estate trade that resulted in the highest sales price ever recorded in The Bridges community in California. A $7.75 million custom home was successfully traded for a $2.5 million English Tudor-style home in La Costa in a process that took just 40 days.

A real estate trade is a simple process in which a seller with good equity, good employment and good credit who wishes to “move up” is matched with a seller who has good equity, employment and credit who wishes to “move down.”

“One motivating factor behind a real estate trade is for the financial benefit,” says Warren. “One buyer sees the ability to trade up in a market in order to gain equity and the other buyer who may not want to make the payment on their home-or can’t afford to-has the opportunity to get out of the situation before it is too late.”

The trading process is as simple as “I’ll buy yours and you’ll buy mine.”

“Once the match is made, the procedure turns into two purchase agreements that occur simultaneously,” says Warren.

Home buyers need to understand that trades are not limited to trading a home for a home.

“A successful trade can occur when someone has something of value such as a car, a boat or even diamonds,” says Warren.

One of the most unusual trades that Warren has been involved in was when a client traded a load of gravel for the down payment on a property.

“This goes to show that ‘non-traditional’ trades are just as successful,” concludes Warren. It all depends on how the deal is packaged and what motivates each party.

For more information, visit http://www.villasir.com.

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Baby Boomers Dominate New Housing Trends

By Sandy Boda
Executive Officer,
Home Builders Association of Midwest Georgia

The largest American generation is either retired or quickly nearing retirement age. Baby boomers, the generation born between 1946 and 1964 and who count more than 76 million, may be getting older, but they are definitely not ready to head to the retirement home!

The boomer generation is more active than generations past, has a more sophisticated style and wants options and choices in their homes. Whether they are selling the homes where they raised their children and heading to sunnier pastures, or staying put and redesigning to accommodate their retired lifestyle, boomers are making an impact on new housing trends. Some features that home builders and remodelers are seeing as they begin to cater to the boomers include:

Home Offices – Some boomers are choosing to work past the age of 65. As they transition from a traditional 9-to-5 job, however, they want home offices for flexibility. A second career or part-time employment often eliminates the hassle of commuting while keeping them active and bringing in supplementary income.

Tech/Media Centers – The tech-savvy boomer generation wants top-of-the-line amenities for their homes such as a media room with surround sound and central control systems, which manage all media sources in one location. The house may include a wireless home network (Wi-Fi), remote control lighting and security features.

Wider Doors and Hallways – As a person ages, there is likelihood that use of a wheelchair might become a necessity. Designing a home that is livable now but can transition and be functional as the occupant ages is important in ensuring that the home will be a good long-term investment. Wider doors and hallways are useful for moving larger furniture today, and will also be wheelchair accessible tomorrow.

Better Lighting/Bigger Windows – The need for more lighting usually increases as we grow older. To accommodate this, builders are adding more windows and making them larger to let in more natural light. They are also adding more light fixtures in areas including under cabinets and in stairwells. Multiple switches to reduce the number of trips and dimmer controls to eliminate glare are other options.

First-Floor Bedrooms and Bathrooms – More than 40 percent of new homes have master suites downstairs, a 15 percent increase over a decade ago. Boomers not wishing to go up and down stairs with bad knees and aching backs have helped fuel this trend. The bedrooms are also bigger, with larger walk-in closets and bathrooms that have a separate tub and shower and dual sinks.

Easy to Maintain Exteriors/Landscaping – Yard work, painting and other landscaping chores may no longer be enjoyable to aging homeowners. People who move to a new home when they retire may opt for a maintenance-free community. Those that choose to stay in their homes might make improvements to exterior surfaces such as installing stucco, brick or low-maintenance siding. Lawns are being replaced with living patios, decorative landscaping, or flowerbeds, which can be a hobby for gardening enthusiasts.

Flex Space – “Flex space” has become more prevalent in both new homes and remodeling. Flex spaces are rooms that take on the purpose of the present homeowner’s needs but can adjust with changes as they occur. What may have once started out as a guest bedroom can be redecorated to serve as a hobby room or library. This allows homeowners to stay in their homes longer as it continues to serve their needs throughout life’s stages.

To find a designated Certified Active Adult Specialist in House (CAASH) or Certified Aging-In-Place Specialist (CAPS) builder or remodeler in your area, contact The Home Builders Association of Midwest Georgia at (770) 716-7109. The HBA of Midwest Georgia serves over 700 businesses in the building industry in Fayette, Coweta, Spalding, Meriwether, Heard, Pike, Upson, Lamar, Butts and Jasper Counties.