Existing Home Sales Not As Good As Originally Thought


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Existing Home Sales Not As Good As Originally Thought

Just when you think the news on the housing market can not get any worse comes the news that existing home sales from 2007 to 2010 were not as good as reported.

According to the National Association of REALTORS, far fewer homes have been sold over the past five years than were previously estimated.  NAR says it plans to downwardly revise sales figures of previously owned homes dating back to 2007.

The monthly numbers released by NAR are a closely followed gauge of the health of the housing market.  It appears that there are two main factors that have led to the overstating of the sale of homes.

The growth of many of the regional areas has afforded opportunities of Multiple Listing Service boards to expand into new areas.  For example: A REALTOR can list a home in the MLS for that region, however, if they want to reach out to a near by metro area, they can also list it in that MLS directory.  When the house is sold it may be counted as two transactions when in fact, it is only one.

The other area that probably has a larger impact is that more and more people who are selling their homes are using an agent.  When the market is booming, some homeowners may sell the home themselves.  These homes are not counting in the statistics of sold homes.  As the real estate market hs become more difficult, more of these home owners have relied on real estate agents to conduct the sale, thereby causing an increase in the number of counted transactions, but not necessarily an actual increase in the number sold homes.

The chief economist for NAR reported that the median price of homes will not be affected by this reporting issue.  It is also worth noting that the sale of new construction homes was not affected by this either.

In reality, I don’t believe this will substantially change much of the upticks that we have seen in the housing market in the last few months.  Home prices are low; interest rates are historically low; and the market, especially in the Williamson County and Greater Nashville area have been steadily improving and will continue to do so.

As always, if I can help you with any of your real estate needs, or to answer any questions you may have, please don’t hesitate to contact me by text or phone call at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland                                                                                       www.GreaterNashvilleRealEstate.info

The Long Term Value of Home Ownership in the U.S.


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The Long Term Value of Home Ownership in the U.S.

Housing is shelter first and foremost, but under normal circumstances it also is a proven sound long-term investment.  Abnormal swings in recent years have distorted those perceptions, and for many people the reality as well.   But a closer examination of the underlying fundamentals shows housing will continue to be a good, long-term investment in the future – as long as we don’t tamper with basic policies which promote responsible and sustainable home ownership.

Beyond the factors of shelter and investment, buying a home generates a pride of ownership and commitment to the community, which comes with achieving this key part of the American Dream. Combined, these factors contribute to the quality of life in communities across the country – inspiring our nation to be described as the “best housed nation on earth.” The goal is sustainable home ownership which contributes to the vitality of communities.

Favorable Tax Treatment and Economic Benefits 

Congress has long recognized the intrinsic values of home ownership, and consequential economic and social benefits, and has offered tax incentives for home owners since the inception of the Internal Revenue Code with the Revenue Act of 1913. Most important is the mortgage interest deduction, which reduces the tax burden for home owners. The use of itemized deductions grew notably during the 1950s and 1960s as home ownership increased.   In addition, state and local property taxes are deductible.

Today, home owners pay 80 to 90 percent of the income taxes in the U.S., and among those who claim the mortgage interest deduction, nearly two-thirds are middle-income earners.  In the mid-20th century, the deduction became a key component in how the housing system works in the U.S., stabilizing communities while helping owners accumulate long-term wealth. That, in turn, provides confidence for consumers to spend and stimulate other economic activity.

For each home purchase, nearly $60,000 in direct and indirect spending occurs in the economy. Besides the services directly tied to a home purchase, other sectors benefit from the demand for related goods and services, including carpeting, furniture, appliances, window treatments, landscaping, home improvement, etc.  In total, housing and related economic activities account for more than 20 percent of Gross Domestic Product in a typical year.

Virtually every indicator is now pointing to an uptick in the housing market in many parts of the country.  If now is the time for you to buy or sell real estate, talk to a REALTOR in your market who can give you the facts you need to make an informed decision.

As always, if I can help you with any of your real estate needs, or to answer any questions you may have, please don’t hesitate to contact me by text or phone call at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland                                                                                       www.GreaterNashvilleRealEstate.info

reposted from the National REALTOR Association.

Determining A Listing Price For Your Home


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Determining A Listing Price For Your Home 

Establishing a reasonable listing price for a home is perhaps the biggest challenge for every home seller. Many sellers ask themselves, “The home down the street sold for a high price, can I sell mine for the same?” or “Can I list the house high and see what happens?” These and various other factors must be considered before determining the right amount. It’s important to consider the following steps before determining the proper listing price

Choose the right sales associate. While many people use a friend or relative’s referral to select a sales associate, it is smart to talk with agents and find one that you can communicate with well and you have a high level of confidence in bringing this transaction to a conclusion. Pay attention to how they plan to market the home, and find out the reach of their company’s Web site. In this day and age, it is not enough to simply list your home on the MLS – that should be a given.  If you are talking to a smaller brokerage, however, I would ask whether or not the home is listed on the MLS.  The use of today’s technology is a must.  Agents that embrace technology and utilize it have a better chance of finding a buyer than one who does not.  The days of listing it on the MLS and sitting back and waiting for a buyer are gone.

I strongly discourage anyone selling their home to “list it high to see what happens.”  I can save you some time and tell you what will happen – nothing.  There are too many homes on the market for buyers to focus on homes that are listed too high.  Everyone has a little wiggle room in the price, but listing your home to high is the kiss of death – market it to sell, not to list.

Do the homework. Ask a real estate sales associate for a written comparative market analysis (CMA). This will provide a list of recent sales prices of similar homes in the area (with comparable numbers of bedrooms, baths, and square footage and lot size), the asking prices of homes currently for sale nearby and other pertinent information. A CMA will provide a dollar range of where you can expect to list and sell your home.  Please be aware the CMA is not an appraisal.

Take the emotion out of it. While the seller likely has great affection for the home, the agent will not set the price based on the seller’s emotion. Instead, he or she will evaluate the location, condition and size of the home. A house in a secluded, exclusive area may appeal to some, while others want to be closer to schools, shopping and health care facilities. Also, what is the physical condition of the home? Is it a fixer-upper? Does it make a good first impression (i.e. “curb appeal”)? Will it attract a growing family, or is it better suited to empty nesters?   All of these factors will determine how an agent will market your property.  One size fits all, does not work for real estate.


Determine if it is a buyers’ or sellers’ market. Home inventory, mortgage interest rates and the economy play a role in determining whether the buyer or seller has a negotiating advantage. While most would normally consider the current market to favor buyers, with a surplus of inventory and lower interest rates, it’s important to remember that credit lending has become more difficult to obtain as a result of present economic conditions.  Sellers should be open to innovative ideas to making the transaction work, for example; having a closing date suitable to the buyer if that is an issue.

Do the math. Do not forget to figure in closing costs, legal fees and other selling expenses when determining the value of your home. The sales associate should be able to provide cost estimates and negotiate with a potential buyer to ensure a good sales price.

Give it the once over. There is one more step to be certain the house sells for your asking price, or for more. Do as much as possible to improve the home’s appearance: touch up the paint, fix leaks, seal any cracks, clean up the clutter, and eliminate pet odors. The house has only one chance to make a first impression!

Remember, real estate is a very local matter.  Consult with a REALTOR® in your area who can provide you with the facts you need to make an informed decision.

As always, if I can help you with any of your real estate needs, or to answer any questions you may have, please don’t hesitate to contact me by text or phone call at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland                                                                                    www.GreaterNashvilleRealEstate.info

The Real Estate Market Continues to Improve – Slow, but Steady!


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The Real Estate Market Continues to Improve – Slow, but Steady!

Make no mistake; the real estate market has had a sluggish recovery from the bust a few years ago.  Even in the best of markets, real estate is not selling the way it should or what buyers or sellers would like, and certainly not what real estate agents would like!  There are a number of reasons for this from the mortgage companies reluctant to give out mortgages to appraisers who play it safe and appraise homes for less than what a seller needs to sell, and to sellers who still want to make a profit in this market and have their home prices higher than what the market will pay.

But I have reported for several months now that there was a glimmer of hope, and that glimmer has turned more into a ray of sunshine.   The unemployment rate recently dropped to 8.6%, down from a 9.0% to 9.2% range for the last seven months.  Although that is still a high number, the encouraging news is that the survey of homes in the United States seems to confirm the downward trend.  We frequently hear that any drop in the unemployment rate is due to unemployed workers no longer being counted, and to some degree that is correct.  However, in the most recent report it appears that the decline of unemployment is supported by the survey of households.  This is very good news – not great news, but good.  And it is the continuing trend of good news that is what makes it noteworthy.

It is important to note that as the economy improves, there will be more and more people coming back into the job market.  Many unemployed workers may have given up looking for work or decided to go back to school.  In both situations, neither of those individuals would be considered unemployed.  However; as the market improves many of those individuals may come back into the job market which may result in a slight up and down effect of the unemployment rate.  It is important to look at a long term pattern of the statistics, and the long term statistics of unemployment indicates it is heading in the right direction.

In addition, the number of distressed homes on the market has been a major factor in driving home prices down.  Williamson County, Tennessee, where I live and sell real estate, has already seen an uptick in home prices.  On a national average, the percent of distress homes for sale has dropped from 30% in September to 28% in October.  This is a continued decline from a high of 49% of homes on the market that were distressed in March, 2009.

This trend will not turn around overnight.  Financial institutions have been holding distressed homes on their books for extended periods of time for two reasons.  One reason is that they hold these distressed homes on their books for the cost amount.  For example: If the financial institution received a property from foreclosure at the amount of $250,000, the bank held that property on the books for that amount even though the market value of the home may only be$175,000.  It benefited the bank to hold it on the books at the higher amount, even for a little while.

The second reason is that financial institutions appear to be dispensing the distressed properties a few at a time so as to not drive the price of homes into the gutter.  This has been a relatively painful plan, but one that has probably been good in the long run.  With distressed homes becoming fewer and fewer on the market, the prices should stabilize and eventually move back into the upward direction.

It is important to remember that real estate is a very, very local matter.  If you are thinking of buying or selling real estate, contact a REALTOR in your area.  They will be able to answer any questions you may have and provide you with the information you need to make informed decisions.

As always, if I can help you with any of your real estate needs, or to answer any questions you may have, please don’t hesitate to contact me by text or phone call at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland                                                                                    www.GreaterNashvilleRealEstate.info

 

 

Congress Reinstates Ceiling on FHA Loans


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Recently Congress reinstated the loan limit formula and the maximum cap for Federal Housing Administration insured loans for two years.  This is a move that is overdue in my opinion and will help the real estate market to some degree but is not the magic bullet.

The provision reinstates the FHA loan limits through 2013 at 125% of local area median home prices, up to a maximum of $729,750 in the highest cost markets.  The loan limits for Fannie Mae and Freddie Mac mortgages will remain at 115% of local area median home prices up to $625,000.

Many people misunderstand what these numbers mean.  This does not mean that you can automatically get a loan for $729,750 or that you can get a mortgage for 125% of the value of your home.  The limit is set for homes in high cost areas such as New York City or parts of California for example.  The 125% is of the local area median home prices.  It is not for the value of your home.  If you are trying to sell a home at the high end of your local market prices, chances are an FHA loan will not help your buyers.

In middle Tennessee where I live and sell real estate, the median price of homes is far less than those maximum amounts, never the less, FHA loans can be a big help for anyone looking to buy real estate.  Nearly two thirds of buyers who will be helped by the loan limits provisions have incomes below $100,000.

As I have mentioned many times on this blog, real estate is a local matter.  If you are thinking of buying or selling real estate, talk to a REALTOR who can give you the facts for your local market conditions.  A REALTOR can also help you find a mortgage professional if you need one who can answer specific questions you may have regarding loans of any type.

As always, if I can help you with any of your real estate needs, or to answer any questions you may have, please don’t hesitate to contact me by text or phone call at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland                                                                                    www.GreaterNashvilleRealEstate.info