January 21, 2012
Filed under: Philadelphia Area — Tags: Camden County, Delaware Valley, Gloucester County, Lehigh Valley, Long and Foster, market updates, Mercer County, New Jersey, Philadelphia, Real Estate — admin @ 1:20 am
SEES INCREASE IN SALES, TIGHTENING INVENTORY IN DECEMBER
CHANTILLY, Va., Jan. 20, 2012-The residential real estate market in the Delaware Valley/Lehigh Valley region of New Jersey experienced some positive trends compared to December of last year, according to The Long & Foster Market Minute® reports. In December, sales increased in some areas of the region and active inventory tightened in the New Jersey counties surrounding Philadelphia.
According to December data, sales increased in some areas of the region, with year-over-year increases in Camden and Gloucester counties of 9 percent and 21 percent, respectively.
In December, active inventory in the Delaware Valley/Lehigh Valley region continued to tighten compared to year-ago levels. Gloucester County saw the largest decrease in inventory with a 13 percent decrease. Camden and Mercer counties, according to data, each decreased by 10 percent. Burlington County inventory decreased by 11 percent year-over-year.
December data shows that all of the Delaware Valley/Lehigh Valley region experienced decreases in median sale price compared to the same month last year. Sellers in December received approximately between 93 percent to 95 percent of their asking price, on average, an indicator of movement toward a more balanced market between buyers and sellers.
Across the region, homes are selling in approximately four to five months, on average.MercerCountyhad the fewest days on market (DOM) with an average of 119 days.
“As we start to see glimpses of improvement across the Delaware Valley/Lehigh Valley region, it’s important for consumers to have as much information as possible to make well-informed decisions pertaining to their homeownership goals,” said Jeffrey S. Detwiler, president and chief operating officer of The Long & Foster® Companies.
“The positive trends that we are seeing here in the Delaware Valley/Lehigh Valley region such as increases in the number of homes sold in some areas and quickly-selling homes, could signal to consumers who may have been on the fence that now is an ideal time buy or sell real estate. Historically-low interest rates and reasonably-priced homes are creating real estate options for consumers that we have not seen for generations,” he added.
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January 20, 2012
Filed under: Philadelphia Area — Tags: Bucks County, Chester County, Delaware County, Long and Foster, Montgomery County, Philadelphia County, Real Estate — admin @ 1:14 am
PHILADELPHIA HOUSING MARKET
SEES INCREASE IN SALES, SOME PRICE INCREASES IN DECEMBER
CHANTILLY, Va., Jan. 20, 2012— The greater Philadelphia real estate market, including Bucks, Chester, Delaware, Montgomery and Philadelphia counties, experienced some positive trends compared to December of last year, according to The Long & Foster Market Minute® reports. The number of homes sold increased throughout much of the greaterPhiladelphia region compared to a year ago, according to December data, and homes continue to sell, on average, in less than four months.
In December, sales increased across most of the greater Philadelphia region. The largest increase in sales was reported in Delaware County, in which year-over-year sales increased by 8 percent. Bucks County increased 7 percent, and Montgomery and Philadelphia counties also experienced increases in year-over-year units sold, according to data.
Most homes in the region continued to sell in less than four months, on average. According to this month’s data, days on market (DOM) was 88 days in Philadelphia County, 107 days in Chester County, 104 days in Montgomery County, 102 days in Delaware County, and 111 days in Bucks County. Long & Foster agents indicate that many homes priced competitively in the region sell after just several weeks on market, a reflection of continued demand and the relative lack of supply in some local areas.
According to December’s data, median sale price was mixed across the greater Philadelphia region compared to the same month last year. Chester County experienced a 7 percent year-over-year increase to a median sale price of $297,750.
Inventory decreased throughout the region, according to December data, with a drop of 15 percent in both Bucks and Montgomery counties, 8 percent in Delaware County, 12 percent in Chester County, and 17 percent in Philadelphia County, compared to the same month last year.
“As we start to see glimpses of improvement across the greater Philadelphia region, it’s important for consumers to have as much information as possible to make well-informed decisions pertaining to their homeownership goals,” said Jeffrey S. Detwiler, president and chief operating officer of The Long & Foster® Companies.
“The positive trends that we are seeing here in the greater Philadelphia region such as increases in sales throughout most of the region, and increases in median sale price, could signal to consumers who may have been on the fence that now is an ideal time buy or sell real estate. Historically-low interest rates and reasonably-priced homes are creating real estate options for consumers that we have not seen for generations,” he added.
The Long & Foster Market Minute® is an overview of market statistics based on residential real estate transactions and presented at the county level. The easy-to-read and easy-to-share reports include information about each area’s units sold, active inventory, median sale prices, months of supply, new listings, new contracts, list to sold price ratio, and days on market. Featuring reports for more than 500 local areas and neighborhoods in addition to more than 100 counties in seven states, The Long & Foster Market Minute is offered to buyers and sellers as they aim to make well-informed real estate decisions.
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January 16, 2012
Filed under: Home Sellers,My Realtor Experiences,Philadelphia Area — Tags: estate, executor, power of attorney, real estate agent — admin @ 7:33 pm
With recent events in my personal life, I thought it might be good to do a bit of research about real estate transactions that involve a power of attorney or an estate. Many people find themselves in this situation with questions about how to properly handle the estate of a loved one, here are some good tips and information about how to proceed in this situation:
There are situations when a title owner is unable to participate in the listing and sale of his or her property. Infirmity, incapacity, overseas service and death are the frequently encountered circumstances. In lieu of an owner, you will likely deal with an executor, court appointed guardian, or one who holds a power of attorney or other special power. Understanding the terminology and legalities is essential.
A power of attorney is a document by which an owner (principal) appoints another person (agent) to act for the owner. It is used when the owner is living but unable to act for himself. Do not confuse the use of the word “agent” with real estate agent. The agent named in the power of attorney is usually a relative, loved one or someone who holds a position of trust with the principal.
Only a competent person can sign the necessary document to create a power of attorney. If an owner signed a properly drafted “durable” power of attorney before becoming incompetent, the power is effective and the agent may act for the owner. The Pennsylvania legislature has dictated what constitutes a properly drafted form. Do not assume that any power of attorney form has been properly drafted. Pass it by counsel or your title company to see if it comports with law.
If an owner becomes incompetent before signing a power of attorney, then only a guardian appointed by the court can act. Obtaining a court order requires the filing of a petition, publication of legal notices, costs money and takes time.
Another limitation of a power of attorney document is that it may only be used when the principal is living. After, the power of attorney is no longer effective and an estate must be opened with the county court where the principal resided. A representative is then appointed by the court to handle the principal’s assets including real estate. If a person died with a Will, the representative(s) named in the Will is appointed by the court and referred to as an executor(s). A person who dies without a Will has an administrator(s) appointed by the court. The administrator is usually the next of kin. If the person appointed is female, the court will use the terms executrix and administratrix.
When a real estate agent is asked to list a property by an executor or other non-owner, the real estate agent must obtain a copy of the correct documentation before taking any other action and should not operate on word alone. In a power of attorney situation, you must obtain a copy of the power of attorney document and keep it in your file. An original will have to be recorded at the county’s recorder of deeds. The agent is the person who will communicate with the real estate agent about the real estate property. If there is more than one person appointed, then all the named agents need to make decisions and sign all documents.
The documentation that is required for the representative of an estate is referred to as the Short Certificate. It is given by the Register of Wills and names the representative(s) of the estate who has the power to list the real estate. Like the power of attorney, if there is more than one representative appointed, all must make the decisions and sign documents.
An agent(s) under a power of attorney or a representative(s) in an estate has certain duties: (1) exercise the powers for the benefit of the principal (owner) (2) keep personal assets separate from those of the principal (3) exercise reasonable caution and prudence and (4) keep a full and accurate record. An estate representative’s duties are similar to that of an agent under a power of attorney include responsibility for preserving the assets of the estate and liquidating the assets if necessary. The representative is responsible for using the estate assets to pay the final debts and inheritance tax before distributing the proceeds to the beneficiaries. A representative(s) has the power to sell or lease the deceased person’s real estate as long as the real estate has not been specifically devised to someone in a Will. Accordingly, it is a good idea to take a look at the Will to make sure the real estate was not given to someone before you list it.
After you have the defined the situation, determined the correct person(s) of authority, and have received and reviewed a copy of the appropriate documentation, you are ready to proceed. Remember that all of the authorized agents under the power of attorney or representatives in an estate must sign the listing agreement, disclosure documents, etc. For example, when there are two executors in an estate, then they both must sign the Listing Contract. If only one executor signs, the document is not effective.
As you are aware, the Real Estate Seller Disclosure Law, exempts an estate representative from completing the Seller’s Property Disclosure Statement except for material defects known to the representative. How an agent under a power of attorney completes a disclosure form is a matter that requires its own article.
Adapted from an article written by Elizabeth H. Feather and James L. Goldsmith, Caldwell & Kearns, Thursday January 12, 2012
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January 11, 2012
Filed under: Philadelphia Area — Tags: attic insulation, Delaware County, home winterization, insulation, Pennsylvania, thermostat, weather-stripping — admin @ 11:46 pm
It’s been a mild winter so far in Eastern Pennsylvania, even hitting the 60s this past weekend in Delaware County; that means we still have time to run through a foul-weather checklist.
Here are 10 “must do’s” to have a warm, cozy and safe winter.
1. Check attic insulation. A foot of blown-in or batt insulation (R-38) in the attic reduces heat transfer from heated interior space to the great outdoors. This is a do-it-yourself job. If your attic is not insulated, blow in or roll out 12 inches of loose or batt insulation. If the amount of insulation is less than 12 inches, simply roll out unfaced fiberglass batts over the existing insulation to create a heavier thermal blanket. This is a case where more is better. Make sure to leave soffit vents unobstructed.
2. Install or replace weather-stripping, if necessary. Check the rubber threshold gasket at the bottom of exterior doors and replace if worn or torn. Next, make sure the top and sides of the door are weather-stripped and fit tightly. If there are gaps, replace the weather-stripping.
3. Check exterior doors and windows for gaps. Modern windows are probably OK, but older windows may need some help. To reduce air leakage, casement windows might need some weather-stripping at the joint where fixed and movable panes meet. Old double-hung wood windows are notorious air leakers. Place pieces of narrow self-adhesive rubber weather-stripping on the bottom sides and at the joint where the top and bottom panes meet.
4. Check the outside of doors and windows for voids, and caulk any gaps you see.
5. Change the filter in the heater. In older furnaces, filters should be changed monthly. Change or service newer, more efficient filters according to the manufacturer’s instructions.
6. Replace your old thermostat with a new programmable model. This allows you to regulate the heater to warm the house when you’re there and to reduce the temperature when you are at work or asleep.
7. Have your heater inspected by a licensed heating and air conditioning contractor. An inspection ensures that the heater is operating safely and efficiently. In many cases an inspection can alert you as to whether the unit is at the end of its life. It’s nice to have the option to replace an old heater before it quits and becomes an emergency on a cold January day.
8. Check the carbon monoxide (CO) detector. If you don’t have one, get one. Carbon monoxide is an odorless and colorless gas that kills. An operating CO detector can prevent a tragedy. While you’re at it, check the smoke detectors to ensure they’re operable.
9. Clean gutters and downspouts so fallen leaves won’t clog them. Make sure that downspouts discharge away from the foundation and that soil is graded away from the foundation and at least 6 inches below the siding.
10. Clean the fireplace of ashes; visually check the chimney for loose or missing mortar. Also consider having the chimney professionally inspected and swept by a licensed and bonded chimney sweep.
Winter tips brought to you by Bill and Kevin Burnett from Inman News.
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January 10, 2012
Filed under: Philadelphia Area — Tags: energy efficiency, federal taxes, homeowner, mortgage deductions, property tax, tax breaks — admin @ 11:44 pm
Tax breaks for new homeowners
Congratulations! You’ve become a homeowner. But now that you own a home, you might need to shift the way you think and look at some things, including your taxes and other financial matters.
Owning a home is one of those landmarks that signify financial adulthood. And one of the things that responsible financial adults do is get professional help when the situation requires it. Taxes are one of those areas that often do warrant calling the pros in.
The ultimate aim of using a tax professional is to make sure you get every deduction, credit and other tax advantage for which you qualify, without jacking up your chances at triggering the universally dreaded Internal Revenue Service audit by claiming dubious deductions.
What deductions are available to you, in the event you do decide to itemize your taxes?
1. Mortgage interest deduction. Assuming this home is your personal residence, 100 percent of the mortgage interest you owe and pay before Dec. 31, 2011, is deductible on your 2011 taxes. In January, your mortgage lender will send you a form documenting the precise amount of interest you paid, although most lenders also now make this form immediately available to borrowers online.
Chances are good that you paid some amount of advance interest on your home loan at closing — expect to see that on your statement from your lender, but you should also be able to find it on the HUD-1 settlement statement you received from your escrow agent at closing.
2. Property tax deductions. If this is your personal residence, you should be able to deduct 100 percent of the property taxes you’ve paid to your state and/or local taxing agency this year.
3. Closing-cost deductions. Discount points and origination fees paid to your mortgage lender and/or broker at closing are frequently deductible, but there are rules around this, which tax software and/or professionals can help you make sure you meet. Note that, according to Internal Revenue Service Publication 530, “You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home.”
There are various home improvements (especially those that increase your home’s energy efficiency), state and local tax credits for buying a foreclosure, and other tax advantages that might be available to you.
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January 9, 2012
Filed under: Philadelphia Area — Tags: Bucks County, Chester County, Delaware, Long and Foster, Montgomery County, Philadelphia, Real Estate — admin @ 7:05 pm
PHILADELPHIA HOUSING MARKET
SEES INCREASED SALES IN NOVEMBER
CHANTILLY, Va., Dec. 20, 2011— The greater Philadelphia real estate market, including Bucks, Chester, Delaware, Montgomery and Philadelphia counties, experienced some positive trends compared to November of last year, according to The Long & Foster Market Minute® reports. Units sold increased throughout the greater Philadelphia region compared to a year ago, according to November data, and homes continue to sell, on average, in less than four months.
The Long & Foster Market Minute® reports are compiled from data from residential real estate transactions within specific geographic regions, not just Long & Foster sales.
In November, sales increased across most of the greater Philadelphia region. The largest increase in sales was seen in Montgomery County, which increased its year-over-year sales by 14 percent. Bucks County increased by 4 percent, Chester, Delaware, and Philadelphia counties each increased units sold by 8 percent, 5 percent, and 9 percent, respectively.
Most homes in the region continued to sell in less than four months, on average. According to this month’s data, days on market (DOM) was 89 days in Philadelphia County, 116 days in Chester County, 104 days in Montgomery County, 109 days in Delaware County, and 102 days in Bucks County. Long & Foster agents indicate that many homes priced competitively in the region sell after just several weeks on market, a reflection of continued demand and the relative lack of supply in some local areas.
According to November’s data, median sale price was mixed across the greater Philadelphia region compared to the same month last year. Philadelphia County saw no change in median sales price from last year, remaining at $130,000. Chester County experienced a healthy 9 percent increase to a median sales price of $305,000.
Inventory decreased throughout the region, according to November data, with a drop of 13 percent in both Bucks and Montgomery counties, 8 percent in Delaware County, 11 percent in Chester County, and 15 percent in Philadelphia County, compared to the same month last year.
Philadelphia Housing Market
“As we round out what has been a challenging year for real estate, it’s more important than ever for consumers to have as much information as possible to support their buying and selling decisions,” said Jeffrey S. Detwiler, president and chief operating officer of The Long & Foster® Companies. “Because every real estate market is different, national housing data may not support local buyers and sellers as they look to make well-informed decisions pertaining to their homeownership goals.”
“For example,” Detwiler continued, “we are continuing to see some very positive trends in the greater Philadelphia region, including increases in sales throughout most of the region, and some increase in median sales prices, according to data. For consumers, these dynamics could signal an ideal opportunity to buy or sell real estate.”
“Armed with housing information specific to their local area and the assistance of a well-trained, experienced Realtor, some consumers may find that the opportunities that exist in today’s market—including historically-low interest rates and reasonably-priced homes—may present them real estate options unlike any we’ve seen for generations,” Detwiler added.
The Long & Foster Market Minute® is an overview of market statistics based on residential real estate transactions and presented at the county level. The easy-to-read and easy-to-share reports include information about each area’s units sold, active inventory, median sale prices, months of supply, new listings, new contracts, list to sold price ratio, and days on market. Featuring reports for more than 500 local areas and neighborhoods in addition to more than 100 counties in seven states, The Long & Foster Market Minute is offered to buyers and sellers as they aim to make well-informed real estate decisions.
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January 5, 2012
Filed under: My Realtor Experiences — Tags: Boston, Delaware County, Garnet Valley, Kevin Toll, Long and Foster, realtor — admin @ 12:41 am
As a Realtor for Long and Foster, I find one of the most important aspects of my job to be accessibility. Being available to my clients at all times and in all locations is essential to having happy clients and could make the difference between landing a deal or losing a clients dream home.
On my most recent trip to Boston for New Years Eve, I spent most of the ride on client related phone calls and emails. I have a listing in the Garnet Valley School District, in Delaware County, PA. When I got the email that an offer was coming in on the property, I was in route to Boston, so having a smartphone with internet access was essential.
Being accessible has proven to be essential time and time again. Two years ago I was in St. Thomas, US Virgin Islands, for a family wedding, when I found myself doing business on the beach. And without a doubt, every time I go on a hike, whether I am in California, Washington or in Maine, I find myself on a business call when I reach the peak of the mountain.
So, if you are looking for a realtor who is accessible and will make sure they are available to answer your calls, emails and texts, no matter where they are in the country; contact me at 610-609-1096 or kevin.toll@lnf.com
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January 4, 2012
Filed under: Philadelphia Area — Tags: Charleston, housing appreciation, Kansas City, midwest, Oklahoma City, Topeka — admin @ 12:37 am
A boom in farm prices has caused many Midwest cities to emerge as leaders for some of the strongest predictions for housing appreciation in 2012. Kansas City, Kan., came in the top spot in HousingPredictor’s annual survey, forecasting an appreciation of 5.8 percent for this year.
“The recovery is starting in housing with these cities and will eventually spread to other communities throughout the nation as the U.S. recovers from the worst collapse in real estate since the Great Depression,” according to HousingPredictor.
Here are the top cities expected to have housing appreciation in 2012 and by how much, according to HousingPredictor’s latest report:
1. Kansas City, Kan.: 5.8%
2. Topeka, Kan.: 4.7%
3. Charleston, W.V.: 4.5%
4. Oklahoma City, Okla.: 4.3%
5. Minot, N.D.: 4.2%
6. Overland Park, Kan.: 4.2%
7. Wichita, Kan.: 4.1%
8. Huntington, W.V.: 4%
9. Wheeling, W.V.: 3.9%
10. Bismarck, N.D.: 3.6%
11. Casper, Wyo.: 3.5%
12. Lake Charles, La.: 3.4%
13. Rapid City, S.D.: 3.2%
14. El Paso, Texas: 3.2%
15. Cheyenne, Wyo.: 3.2%
Source: “Best Housing Markets 2012,” HousingPredictor (January 2012)
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December 30, 2011
Filed under: Philadelphia Area — admin @ 10:27 pm
Jobs are up, and gas prices are down. Cash registers are ringing, and house prices are back in line. But if politicians can’t get their act together, the whole show could stall out.
After four years of recession and subpar growth, could 2012 be the year the U.S. economy finally snaps out of its funk? Despite the turmoil in Europe, many Americans would like to think so, among them President Obama (whose electoral prospects are dim unless things perk up).
Let’s start with the good news: Recently the economy has done better than expected. Back in June, citing rising gas prices and the drawing-down of the stimulus, I asked whether it was too early to start talking about a double-dip recession. Despite a lot of subsequent angst, it was. Between July and September, GDP rose at an annualized rate of about 2%; the fourth-quarter figure may well be close to 3%. If that rate of expansion were to be sustained, unemployment would come down (and Obama’s chances would greatly improve). Most professional forecasters think growth will be more modest. In a year-end survey by the National Association of Business Economics, the median prediction for GDP growth next year was 2.4%, which is basically an extrapolation from what we’ve seen over the past six months. As a recovering pessimist — from 1997 to 2007, I spent an entire decade doubting the Greenspan/Bernanke prosperity — I have been trying to be cheerier about the economy’s prospects.
There is one, and it consists of several parts. First, employers are hiring, and the unemployment rate is finally falling. Second, rising gas prices, which act like a tax on the economy, are gone for now. After topping $4 a gallon in the summer, the average price at the pump is about $3.30. Going forward, it could well dip below $3. Global stocks of crude are rising, which often augurs a fall in prices.
Third, there is a lot of pent-up demand out there. As the stampede to the malls on Black Friday showed, Americans are still shopping. After years of scrimping and saving, they are eager to buy new cars and gadgets, remodel their homes, and splurge on expensive vacations. Outside of the still-depressed real estate sector, many businesses are doing well.
Finally, some of the imbalances that built up during the Greenspan/Bernanke credit bubble have been alleviated, if not eliminated. Relative to income, house prices are now back to their historic average. Personal-savings rates have risen. Debt burdens are down. In 2007 the typical American household was paying about 14% of its income servicing debts. Today the figure is 11%.
With household finances improving and interest rates at historic lows, a few years of 3% growth shouldn’t be beyond the U.S. economy. But all else isn’t equal, and therein lies the threat, which can be encapsulated in one word: politics.
If the deadlock on Capitol Hill isn’t broken, the economy will be hit in January with a triple whammy of higher payroll taxes, lower unemployment benefits, and cuts in federal spending. Taken together, those measures (or non-measures) would reduce GDP by about two percentage points over the course of the year, bringing the economy dangerously close to stalling. And even if Washington does the right thing – extending payroll tax cuts and unemployment benefits — the outlook will hinge on another set of politicians: the ones in Europe.
It is clear what is necessary to stop the buyers’ strike in continental bond markets. The European governments, led by Germany, need to empower the European Central Bank to act as a lender of last resort, boost the European bailout fund, and launch some sort of TARP equivalent to recapitalize the banks. If those things were to happen and the markets came to believe that the authorities were finally getting a grip, U.S. stock prices would rally, giving a timely boost to the economy. But even after the latest efforts to save the euro, which were set to culminate in a summit Dec. 9, who would bet on such an outcome rather than a chaotic collapse of the currency, with bank failures, and global panic? Actually, I would — but not heavily. Which is why I remain a very cautious optimist!
From John Cassidy on December 13, 2011 in Fortune Magazine
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December 29, 2011
Filed under: Philadelphia Area — Tags: Devon, foreclosures, Home Buyers, homeownership, Kevin Toll, Long and Foster, mortgage rates — admin @ 10:13 pm
After 14 months of job gains, the economy is expected to continue its slow but determined recovery. Here’s what else to expect in 2012 and what it means for agents and the real estate market;
Delinquencies will go down, but foreclosures will go up.
Fewer borrowers will fall behind on their payments next year, thanks to the strengthening economy and refinancings. The share of delinquent borrowers is already down more than a quarter from the peak a couple of years ago. But many borrowers who fell behind on their payments during the housing crisis are still in limbo: last year’s robo-signing controversy threw a wrench in the gears of the foreclosure process. That means that some delinquent loans haven’t yet gone through the foreclosure process. Once a settlement is reached with banks over robo-signing, we’ll see a new wave of foreclosures and foreclosure sales.
What it means for agents: Despite the decline in delinquencies, the wave of foreclosures will hurt. New foreclosures will depress prices for several reasons – foreclosed homes are often sold at a discount and used as comps for non-distressed homes; vacant homes bring down the value of their neighbors; and high foreclosures are the worst thing for consumer confidence in the housing market. That will hurt seller motivation even more than buyer motivation since lower prices will mean deals for some buyers. Agents should be gearing up with competitive pricing strategies to catch buyers and preparing to counsel their traditional seller-clients about the depressed prices to come in high-foreclosure areas.
Rents will rise – which is a bad thing.
With fewer people buying homes and more people losing their homes to foreclosures, rental demand is increasing. High rents will hold back economic growth if businesses can’t pay workers enough to have a roof over their heads. Squeezed city-dwellers won’t get relief until late 2012: that’s when a wave of new multi-unit construction projects that started late this year will be completed and available for rent. To tackle growth-killing high living costs in the priciest cities head on, local governments need to get rid of height restrictions and arduous permitting processes, which hold back urban construction and push development to the suburbs.
What it means for agents: Rising rents and falling prices make buying a great deal – but only for prospective buyers who can afford the down payment and qualify for a mortgage. But the good news is that there will be buyers motivated by available inventory and low prices – even though these buyers may require more hand-holding around financing options.
Mortgage rates will inch up – which will probably be a good thing.
A stronger economy will push Treasury bonds and mortgage rates up because inflation becomes more likely and investors demand higher rates to hold bonds. But lots of factors can push rates up or down. For the housing market, which direction rates go is less important than why. Gradual economic recovery is good news for the housing market even if it means higher mortgage rates – because higher mortgage rates should go hand-in-hand with greater housing demand.
What it means for agents: Higher mortgage rates mean higher monthly payments for buyers, but a stronger economy means that buyers will be better able to afford those rates. Higher rates probably won’t hold back buyers much: rates are only one of many factors that enter into the cost of buying a home, and for many buyers the down payment is a much bigger barrier to homeownership than the monthly payments. Also, buyers need to be reminded that homeownership has other costs on top of the monthly mortgage payment, like insurance and maintenance, which can add half again as much to the cost of owning a home. Agents should help buyers figure out the overall costs and benefits of homeownership, not just the monthly mortgage payment.
Government will sit on its hands.
In election years, politicians don’t take risks: they’re more talk and less action, so don’t expect any bold housing policy reforms next year. What’s more, with the housing market now recovering, we’re not in enough of a crisis to force political opponents together. Instead, in 2012 we’ll see the effects of modest housing proposals from this year: easier refinancing under the expanded HARP program, and more government-owned homes coming to market for sale or rent. But the bitter debate in Washington over the budget deficit and debt will continue.
What it means for agents: No news may be good news: But government is slowly scaling back support for housing, both to encourage the private sector to come back in and also to help deal with the federal budget deficit. Late this year we saw increased fees on Fannie and Freddie to help fund the payroll tax cut, lower conforming loan limits, and proposals to scale back mortgage interest deduction. Agents should explain to buyers what these changes means for their mortgage costs, both before and after taxes.
If you’re ready to take advantage of the housing market, contact Kevin Toll of Long and Foster Real Estate, Inc Devon, PA, at kevin.toll@lnf.com or 610-609-1096.
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