Jason Stuyvesant – Des Moines, IA Realtor

Link to story

10% Jump in September Existing-Home Sales

Existing-home sales rose again in September, affirming that a sales recovery has begun, according to the National Association of REALTORS®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, rose 10 percent to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August, but remain 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.

Lawrence Yun, NAR chief economist, said the housing market is in the early stages of recovery. “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions,” he said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.35 percent in September from 4.43 percent in August; the rate was 5.06 percent in September 2009.

The national median existing-home price for all housing types was $171,700 in September, which is 2.4 percent below a year ago. Distressed homes accounted for 35 percent of sales in September compared with 34 percent in August; they were 29 percent in September 2009.

NAR President Vicki Cox Golder said opportunities abound in the current market. “A decade ago, mortgage rates were almost double what they are today, and they’re about one-and-a-half percentage points lower than the peak of the housing boom in 2005,” she said. “In addition, home prices are running about 22 percent less than five years ago when they were bid up by the biggest housing rush on record.”

To illustrate the jump in housing affordability, the median monthly mortgage payment for a recently purchased home is several hundred dollars less than it was five years ago. “In fact, the median monthly mortgage payment in many areas is less than people are paying for rent,” Golder said.

Housing affordability conditions today are 60 percentage points higher than during the housing boom, so it has become a very strong buyers’ market, especially for families with long-term plans. “The savings today’s buyers are receiving are not a one-time benefit. Buyers with fixed-rate mortgages will save money every year they are living in their home – this is truly an example of how home ownership builds wealth over the long term,” Golder added.

Total housing inventory at the end of September fell 1.9 percent to 4.04 million existing homes available for sale, which represents a 10.7-month supply at the current sales pace, down from a 12-month supply in August. Raw unsold inventory is 11.7 percent below the record of 4.58 million in July 2008.

“Vacant homes and homes where mortgages have not been paid for an extended number of months need to be cleared from the market as quickly as possible, with a new set of buyers helping the recovery along a healthy path,” Yun said. “Inventory remains elevated and continues to favor buyers over sellers. A normal seasonal decline in inventory is expected through the upcoming months.”

A parallel NAR practitioner survey shows first-time buyers purchased 32 percent of homes in September, almost unchanged from 31 percent in August. Investors were at an 18 percent market share in September, down from 21 percent in August; the balance of purchases were by repeat buyers. All-cash sales were at 29 percent in September compared with 28 percent in August.

Single-family home sales increased 10 percent to a seasonally adjusted annual rate of 3.97 million in September from a pace of 3.61 million in August, but are 19.5 percent below the 4.93 million level in September 2009. The median existing single-family home price was $172,600 in September, down 1.9 percent from a year ago.

Existing condominium and co-op sales rose 9.8 percent to a seasonally adjusted annual rate of 560,000 in September from 510,000 in August, but are 16.2 percent lower than the 668,000-unit level one year ago. The median existing condo price was $165,400 in September, down 6.2 percent from September 2009.

Existing-home sales by region:

Northeast – increased 10.1 percent to an annual pace of 760,000 in September but are 20.8 percent below September 2009. The median price in the Northeast was $239,200, which is 1.4 percent below a year ago.

Midwest – jumped 14.5 percent in September to a level of 950,000 but are 26.4 percent below a year ago. The median price in the Midwest was $139,700, down 5.2 percent from September 2009.

South – sales rose 10.6 percent to an annual pace of 1.77 million in September but are 14.9 percent lower than September 2009. The median price in the South was $149,500, down 2.6 percent from a year ago.

West – increased 5.0 percent to an annual level of 1.05 million in September but are 16.7 percent below a year ago. The median price in the West was $213,600, which is 4.9 percent lower than September 2009.

Source: NAR

The time to buy is now! As mortgage rates start to go up and sellers get anxious to sell before winter there has never been a better time to buy a home in Des Moines. Get in touch today and lets find you that home you have always dreamed of owning!

Mortgage Rates Inch Up Again
The 30-year fixed mortgage rate rose slightly to 4.23 percent this week compared to 4.21 percent a week ago, Freddie Mac reports.

Interest on 15-year fixed loans also rose, moving to 3.66 percent from 3.64 percent, while the five-year adjustable-rate mortgage fell to 3.41 percent from 3.45 percent and the one-year ARM remained unchanged at 3.30 percent.

Freddie Mac chief economist Frank Nothaft attributed the flat rates to mixed economic data released this week.

Source: Risk Center, Eileen Fitzpatrick (10/29/10)

© Copyright 2010 Information Inc.

The Obama Administration has released its October Housing Scorecard. Below Jann Swanson highlights some good things and bad things seen by the administration. Fortunately in Iowa we have been sheltered from some of the bigger problems facing the nation but it is still important to stay informed. Link to the original article with additional statistics is below.

Administration Releases October Housing Scorecard
by Jann Swanson

The take-away from the October edition of the monthly housing scorecard issued by the Obama Administration on Monday is that, nine months after the first Home Affordable Modification Program (HAMP) modifications become permanent, over 80 percent of the affected homeowners continue to perform under the new terms.

To date 568,100 homeowners have converted from trial to permanent modifications and the rate of conversions increased during the last reporting period from 39,200 to 56,400 as HAMP administrators continued to work with servicers to streamline program requirements, clean out persistent programmatic bugs, and better train servicer staff.

Since the September scorecard was issued 35,300 borrowers have entered into trial modifications which brings the total to 1,369,400 since the program’s inception in the spring of 2009.

The scorecard is a round-up of a number of regular reports compiled by others such as S&P/Case Schiller, CoreLogic, and RealtyTrac. While it lacks timeliness, it does provide a one-stop summary of what is going on in the housing market.

As previously reported here, early stage foreclosure activity continues to increase, with 102,400 Notices of Default filed during September compared to 96,500 in August. First notices of foreclosure sale were down slightly to 142,900 from 147,000 while foreclosures were completed on 102,100 housing units compared to 95,400 the previous month. Foreclosure figures are taken from RealtyTrac reports.

While the foreclosure picture is still grim, the scorecard editors stress that the number of homeowners helped by various mitigation and restructuring programs is nearly triple the completed foreclosures during the April 2009 to August 2010 period.

Mortgage delinquencies have remained stable with over 4.28 million borrowers seriously delinquent on their mortgages. The delinquency rate for Prime mortgages was unchanged from the previous month at 5.2 percent and the subprime rate inched up from 36.2 to 36.4 percent. The FHA rate slipped one basis point to 12.4 percent.

“Over the last 21 months, the Obama Administration’s swift action in the housing market has kept millions of families in their homes and provided responsible borrowers with incentives to refinance or to become a homeowner,” said HUD Assistant Secretary Raphael Bostic. “But, with many unavoidable foreclosures still in the pipeline, it’s clear that we have a hard road ahead. That’s why we’re focused on successfully implementing the programs we’ve put in place – such as additional assistance on refinancing and helping unemployed homeowners stay in their homes – and ensuring that help is available to homeowners as soon as possible.”

Over 64,000 FHA purchase mortgage originations were completed during the current reporting period compared to 67.2 in the previous month and FHA refinancing decreased from 51,700 to 47,400. Virtually all of the purchase mortgages were given to first time home buyers. Information on other mortgages is compiled quarterly by the Mortgage Bankers Association and was reported previously.

The report says that the impact of recent new and expanded resources is expected to contribute to progress in future scorecards. For example, in July FHA announced a short refinance option targeted at underwater borrowers. Those who are current on their existing mortgage and whose lenders agree to write off at least 10 percent of the unpaid principal balance will be offered the opportunity to qualify for a new FHA-insured loan.

Original Link with charts

We are getting in to the season where junk food and candy are at the front of every child’s mind. It starts with Halloween and carries on right through Christmas season. This is a great article on some healthy snacks your kids will enjoy. Candy, chips, and soda are ok as a special treat but can do tremendous damage to your children’s teeth and overall eating habits if consumed regularly.

Powering Up Your Kids with Healthy Snacks

By Nancy Churnin

RISMEDIA, October 26, 2010–(MCT)–There was a time, a few years back, when the Arsenal soccer team would chow down on doughnuts at a morning game.

Not anymore.

The boys, now a sixth-grade recreational YMCA team in Dallas, snack on orange slices, clementines and bananas, cheese sticks, and whole-grain or rice crackers, along with drinking lots of water.

The kids seem to feel better and play better because of it, says Laura Forson of Dallas, whose husband, Jim, coaches the team on which their 11-year-old plays.

“We decided as a group of parents that we want to reinforce what our kids are hearing at school, that if we’re good to our bodies that our bodies will be good to us. We’re trying to stress the importance of a healthy body for longevity.”

Increasingly, parents are taking a healthier approach to the treats they bring to their children’s sports games, says Meridan Zerner, a dietitian at Cooper Aerobics Center in Dallas.

“I am seeing parents helping their children make better choices more often,” she says. “I think parents want to give their children every advantage, and one of those is health. Besides, if you want your kids to play stronger, faster and smarter you can’t fuel that with candy and treats.”

The trend is not universal, though — so Zerner, a mother of two, tries to have something healthful on hand in her car for those times when she doesn’t like what’s being offered.

“When parents bring these little Gummi bears or chips, I pull my son aside and say, ‘You can have some of this,’ because I don’t want him to feel excluded, but I also give him something healthy because I know that’s what his body needs.”

Dr. Shane M. Miller, a pediatric sports medicine specialist at Children’s Medical Center Dallas, says the right foods can make all the difference.

“Simple snacks such as fruit, pretzels or a bagel contain carbohydrates and may be appropriate for longer periods of activity, after activity or in between games,” he writes in an e-mail. “Replacing carbohydrates within an hour after exercise offers the best opportunity for the muscles to utilize the sugar and restore fuel availability.”

Forson says their team’s move to healthier snacks started when the boys were being scheduled for back-to-back games. That’s when the parents noticed that sugary treats after the first game gave boys a burst of energy that petered out quickly in the second match.

“It was a common-sense solution to the problem,” she says. “And the boys were welcoming of it. I asked my son if he minded having healthier snacks and he said no. He feels he’s got a lot of endurance because of them and his energy level is higher.”

The Arsenal parents are trying to slip in a lesson about the environment, as well, by urging the children to bring water bottles that they refill out of a big jug of water the parents bring to each game, Forson says.

“We don’t want to have plastic bottles strewn all over the field. We’re trying to send a message that we need to treat the earth well just as we treat our bodies well.”

WHAT TO SERVE
Dietitian Meridan Zerner offers these recommendations for young athletes:

Pregame: Easy-to-digest carbohydrates, such as graham crackers and milk, whole-grain crackers with a little cream cheese, a small bagel with a little peanut butter, pasta, brown rice, a healthful cereal bar such as Kashi, a Clif Z Bar or Kellogg’s All-Bran Fiber bar.

Halftime: Handful of Cheerios or the mini Honey Nut Cheerios bags, whole-grain graham crackers.

Postgame: Trail mix, watermelon, low-fat cheese, whole-grain Goldfish, yogurt sticks, minibagels with peanut butter, oranges and bananas, 100 percent fruit bars, yogurt fruit bars. For kids who want something more exciting than water, she suggests Honest Kids, a flavored water with no high-fructose corn syrup that comes in a pouch with a straw.

Tips on buying snacks: Look for the words “real fruit” and “whole grain,” and less than 3 grams of saturated fat; avoid high-fructose corn syrup or any sugar if it’s in the first five ingredients. Zerner says she always brings two snacks to maximize the chance that each child will find something he likes.

(c) 2010, The Dallas Morning News
Distributed by McClatchy-Tribune Information Services.

Original Post

NAR: 10 Market Facts for Uncertain Times.

This is an interesting take on real estate markets by Joe Manausa down in Florida. Here is the original article

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It is always a sellers’ market in real estate, and it is important to know this whether you are buying or selling real estate. This is a fact that is often missed by people who want to buy a home, as well as by sellers who want to sell a home.

If you have been paying attention to the housing market at all, then you know there is a nationwide glut of homes for sale. Both the National Association of Homebuilders and the National Association of REALTORS like to gloss over this fact, but the truth is we over-built in most areas around the country and it will take growth at each and every local level to consume the excess inventory of homes.

We know that when trying to sell any commodity, when supply is far higher than the rate of demand, pricing pressure ensues and values drop until more buyers are drawn to the values available. Knowing this, you might be surprised when I accurately and confidently state that
Real Estate Is Always A Sellers’ Market

But it is true. And if this something you don’t understand, you should read on.

Homes Are Unique

The great thing about owning a home is knowing that it is not exactly like any other on the planet. Our homes are unique, as our individual touches make them special to us and our families. Because of this, there is no “shelf” to display them upon when it is time to sell them, and the value of the home will be based upon what similar homes can be purchased for at that specific moment in time.
Homes Are A Necessity

The one thing for sure is that our society has no desire to move back into caves. I am fairly confident that real estate will be a recognized commodity for the remainder of my life, and well into the future. People need a home, so there will always be some level of demand for housing. So why do some reports say “now is the time to buy” and yet others say “be cautious, this is a buyers market?”
Understanding The Difference Between “The Housing Market” and “Your Housing Market”

This is a point lost on many real estate consumers, and unfortunately even misunderstood by many real estate “professionals.” There is a housing market that is larger than any one person, and we can study this market, identify current supply and demand relationships, and then determine whether or not the housing market is currently in a buyers’ market or a sellers’ market.

But what we cannot do is conclude that this market influence has ultimate control over the saleability of a specific home. You see, ultimately, the seller gets to decide his or her asking price, and this alone will determine whether or not that seller is priced to be in a sellers’ market or a buyers’ market. To fully understand this, let’s look at a specific example.
Home Owners Can Choose To Be In A Sellers Market

Let’s say there is a home for sale that is worth roughly between $150K and $200K, but more accurately closer to the $200K level. The homeowner decides to sell the home and must determine an asking price. Here are some thoughts based upon our current market conditions where there are a glut of homes for sale:

*

Asking Price $210K – This home seller “doesn’t want to leave any money on the table” so he asks an amount that leaves room for negotiation. By pricing it here, the seller has made many homes on the market appear more attractive than his, and thus he has placed himself in a buyers’ market. Prospective home buyers get to choose whether or not they want to look at his home and whether or not they want to make an offer. There is no fear that they will “miss out” on this home, as everybody knows it is a buyers’ market and this home (at the current price) is easily replaceable.
*

Asking Price $195K- This home seller has priced the home for roughly what is appears to be worth. Unfortunately, with over a year’s supply of homes on the market, that does not mean a buyer is going to feel compelled to make an offer today. If this home sells, there are hundreds that can replace it, so buyers still have the edge (because we all know that it is a buyers’ market, right?).
* Asking Price $180K- This home seller has priced the home for less than it is worth. He knows that there is only 1 home in every price range “that is a steal,” and thus he has made his own private market a sellers’ market. He can motivate buyers to act today, because they know what is available and this is absolutely the best deal out there. If the seller is too low, the competition among buyers will often times bid the home right back up to what it is worth (if it doesn’t, what is it really worth?).

Home Buyers Better Understand What Type Of Market There Is For Each Specific Home

Understanding that buyers have tons of homes to view often makes them think they need to use the same offer strategy for each and every home. But using the example from above, home buyers do not want to approach each home the same way.

The first home requires some study to determine what the home is really worth, the second home will require a little negotiation, but the third home requires responsiveness. It will sell today, and if a buyer wants the home, a “full price plus” offer is what it is going to take to purchase the home.

The biggest mistake made by buyers today is trying to negotiate with a well-priced seller. While there are not many sellers doing this correctly, the ones that are have complete control of the process of selling their home. I have seen buyers fall in love with homes that are priced below all competition but make a low-ball offer, then they get upset when the seller sells the home to somebody else. Think about it…

Home sellers who price competitively will use a low offer to get a higher bid from another buyer. Don’t make an offer that they will say “no” to. If you are looking to buy a short sale or foreclosure, and you think you can steal it, you might be right. But the “steal” level is easily determinable by a real estate professional who understands the market inside and out, and if you offer below that amount, you will not get the house.
Moral Of The Story

If a home seller is asking too much money, they most likely will not sell due to conditions in real estate right now (see home sales failures). But if they are priced to sell, they will sell at or above their asking price. They can and do create favorable conditions to sell a home, so sellers should employ this as their pricing strategy and buyers need to recognize a deal when the see it. They are few and far between, but if you snooze, you lose!

Here is the recent letter from the FHA Commissioner on new FHA rules for 2011
Link to letter

October 21, 2010

As FHA has now moved into a new fiscal year, I want to take the opportunity
to update you on several FHA policy initiatives that went into effect earlier
this month (October 4). These include a new product option for FHA’s Home
Equity Conversion Mortgage (HECM), changes to our Mortgage Insurance
Premiums (MIPs), and new credit score and down payment requirements for
FHA borrowers.

In addition, I want to provide you with details of a proposed rule on lender
indemnification that was published on October 8. Each of these measures is
designed to strengthen our risk management practices as we continue to
work to increase our capital reserves.

HECM Saver
HUD has just introduced a major new FHA insurance product for reverse
mortgages. HECM Saver gives seniors a new option for accessing their
home’s equity to pay for health care costs, home repairs and other needs.
Despite the popularity of the HECM loan product, we have noted concerns
that some senior citizens find that the upfront fees are too high for them. In
response, we created this new product which will provide seniors with
another reverse mortgage option that significantly lowers costs by almost
eliminating the upfront Mortgage Insurance Premium that is required under
the standard HECM option.

The new product enables seniors to borrow a smaller amount than would be
available with a HECM Standard loan. This option will be available for all
HECM case numbers assigned on or after October 4, 2010.

As described in Mortgagee Letter 2010-34, HECM Saver will have an upfront
premium of only .01 percent of the property’s value. This provides the
borrower with significant savings in comparison to HECM Standard’s two
percent upfront premium. Under HECM Saver, the principal limit, or amount
of money available to a borrower, is lower than under HECM Standard.
Borrowers will receive approximately 10 to 18 percent less proceeds under
the HECM Saver option than they would receive under HECM Standard, which
lowers the risk to the FHA insurance fund.

The annual MIP for both HECM products is 1.25 percent of the outstanding
loan balance.
MIP Changes
Legislation signed by President Obama on August 12 gave FHA the flexibility
to increase the annual premium on FHA single family mortgages up to a
maximum of 1.50 or 1.55 percent of the remaining insured principal balance,
depending on the loan’s initial loan-to-value ratio.

Beginning October 4, the annual premium for FHA Borrowers with a loan-to-
value ratio of 95 percent or higher is 90 basis points. Borrowers who have a
loan-to-value less than 95 percent will pay an annual premium of 85 basis
points.

Simultaneously with the increase in the annual premium, we have reduced
the upfront premium by 125 basis points, from 2.25 percent to one percent.
This reduces the barriers to consumers in purchasing a home because the
annual premium is paid over the life of the loan instead of at closing. Thus,
the new premium structure should help FHA increase the capital ratio in the
MMI Fund without disrupting the housing market. For details on the new
MIP structure, see Mortgagee Letter 2010-28.

We are confident this new premium structure is sound policy, more in line
with private mortgage insurers’ pricing, and will facilitate the return of private
capital to the mortgage market. This change is estimated to yield
approximately $300 million per month of additional income for the MMI
Fund.

Credit Score and Down Payment Requirements
Also effective October 4, FHA introduced a two-tiered down payment
requirement based on the credit scores of new borrowers. To qualify for
FHA’s 3.5 percent down payment program, new borrowers must have a
minimum credit score of 580. Borrowers with credit scores between 500 and
579 are now required to make a down payment of at least 10 percent. Those
borrowers with credit scores less than 500 are no longer qualified to obtain
an FHA-insured mortgage.

These new requirements should help strengthen the MMI Fund by both
reducing the claim rate on new loans and decreasing the losses experienced
as a result of those claims. These changes will help FHA manage its risk while
continuing to provide access to homeownership opportunities for borrowers
who have historically performed well.

For details, read Mortgagee Letter 2010-29.

New Proposed Rule
On October 8, HUD published a proposed rule for comment in the Federal
Register that would strengthen its authority to force certain lenders to
indemnify FHA for insurance claims paid on mortgages that are found not to
meet the agency’s guidelines. This rule is one of the initiatives announced
earlier this year as part of FHA’s increased focus on risk management.

HUD’s proposed rule would require all new and existing lenders with the
authority to insure mortgages on FHA’s behalf (Lender Insurance or “LI”
lenders) to meet stricter performance standards to gain and maintain their
approval status.

The proposed rule would create a regulatory framework and codify the legal
authority FHA currently has under the National Housing Act. It clarifies the
circumstances under which we will require indemnification and the level of
loan performance we expect lenders to maintain.

For LI lenders, HUD seeks to force indemnification for violations of FHA
origination requirements that are ‘serious and material’ to the extent that the
mortgage never should have been endorsed by the lender in the first place,
just as FHA would not have insured the mortgage on its own.

Specifically, these lenders may be required to indemnify HUD if they failed to:

(1) verify and analyze the creditworthiness, income, and/or employment of
the borrower;
(2) verify the source of assets brought by the borrower for payment of the
required down payment and/or closing costs;
(3) address property deficiencies identified in the appraisal affecting the
health and safety of the occupants or the structural integrity of the property,
or
(4) ensure that the property appraisal satisfies FHA appraisal requirements.

HUD may seek indemnification irrespective of whether the violation caused
the mortgage default.

Tightening Performance Standards
The proposed rule will also require LI lenders to continually maintain an
acceptable claim and default rate, both to gain and preserve this special
lender status. We are proposing that for initial and continuing approval to
self-insure mortgages, unconditional direct endorsement lenders must
demonstrate a default and claim rate at or below 150 percent for the
previous two years. This standard would apply to the state/states where the
lender does business, rather than a national default/claim average.

The present regulation defines an acceptable claim and default rate as at or
below 150 percent of either: (1) the national average rate for all insured
mortgages; or (2) if the mortgagee operates in a single state, the average rate
for insured mortgages in the state.

The current regulation may make it easier for a single-state lender to meet
the acceptable standard if that lender operates in a state that has a high
default rate. In contrast, a lender would be disadvantaged by having its claim
and default rate compared to the national average if it operates in states with
comparatively high default rates, even if the lender is in full compliance with
FHA requirements and otherwise eligible for “Lender Insurance” approval.

The proposed methodology will more accurately reflect lender performance
by evaluating each lender based on its actual area of operations. Also, FHA
will continually monitor lender performance rather than conduct an annual
review of each Lender Insurance mortgagee.

In addition, FHA will consider the two-year default and claim performance of
either entity in the case of an acquisition or merger without requiring these
entities to seek a waiver.

The rule also clarifies that FHA, at its own discretion, without any judicial or
administrative action, has the authority to immediately withdraw a lender’s
ability to self-insure mortgage loans. The proposed rule has a 60-day public
comment period that runs through December 7.

In closing, I want to assure you that we are constantly working to maintain
FHA’s sound financial footing so FHA can continue to provide access to credit
while meeting the unprecedented demands of the housing market. I will
keep you posted as we move forward.

###

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