Housing Prices Continue to Rise

Housing PricesThe recovery in the housing market continues to gain momentum. Sales for existing homes were up at 5.9 percent in November. This was in spite of the destruction wreaked by Superstorm Sandy on the East Coast.

The final numbers were higher than expected, considering that this is not the time of year when most people think of buying homes. The anticipated number was 4.9 million, which was easily surpassed. This is the highest since November 2009 and was even up over October in spite of the fact that most experts make adjustments this time of the year.

Prices also Increase

The median price also increased to $180,600, which implies that home values are on the rise as foreclosure numbers continue to drop. Sales increased from October in the area most affected by Sandy. The Midwest also had good numbers, along with the south. The West did the worst, with just a small gain of 0.8 percent.

These improvements have been attributed to a better job market. These two areas often influence each other, with an improvement in the housing market helping people get jobs. As more people get jobs again, they become interested in home buying.

The Factors for the Increase

Three factors are considered responsible for the improvement in home sales. The first is low prices, as the cost of buying a home is still way below what it was before the crisis. Low mortgage rates also contribute to the increase in sales, along with job gains. Not only are the existing home sales up, but more homes are being built.

The improvement in the economy not only encourages more Americans to buy homes, but it helps to keep homeowners in the homes they are paying for by allowing them to keep up with their payments. Bank foreclosures have fallen to their lowest in over five years, which is good news for homeowners, banks, and the economy in general.

Sales of distressed properties, including foreclosed homes, were at their lowest at 22 percent for the month of November. This is a great boost for home sales, because the sale of these properties is usually around 20 percent less than the market value. As these sales decline, it helps to boost the price of other homes.

Another issue that helped sales was the drop in short sales. A short sale is where a homeowner who is in foreclosure is able to sell the property for less than its value. It was expected that these sales would increase before the end of the year due to possible changes in taxes after December 31st. Since they were below what was expected, that was good news for the rest of the houses on the market.

Every month continues with good news for the housing market. The steady increase in sales and prices is a good indication that the recovery will continue, even if it is at a slow and steady pace. While it is far from the numbers during the housing boom, it is a positive indication of the recovery.

How to Refinance if You’re Underwater

Now is a great time to refinance that home mortgage before rates start going up. You’ve probably seen the reports about the increase in home sales and prices, and you know that mortgage rates can’t stay this low forever. But what if you are underwater – owe more on your home than it is worth? While it may be harder to get a refinance loan, it’s not impossible.

There are two options under the Making Home Affordable program created by the government for people who are underwater on their loan.

HARP

The Home Affordable Refinance Program, or HARP, allows homeowners to refinance even if their ratio is at 105 to 125 percent of the home’s value. Not everyone qualifies for this program though. You cannot be moving towards foreclosure or have been delinquent on any loan payments in the last 12 months. The loan must also be owned either by Freddie Mac or Fannie Mae.

Once those two criteria have been met, the lender will have to look at your payment history and credit score along with the structure of the current loan and specific guidelines for lenders. It is worth looking into if it can cut your payments by a few hundred dollars.

HAMP

The second option, called HAMP (Home Affordable Modification Program), is for people who have missed some payments. For this program, you have to prove financial hardship that is serious enough to cause you to lose your home. Like HARP, you must have a loan owned by Fannie Mae or Freddie Mac, or one of the other programs that have signed up with the government to participate.

While this option is not a traditional refinance program, it does modify your payments for up to 60 months. After that time is up, your rates will go up one percentage point every year until it maxes out at the rate prevalent at the time of modification.

There are several ways a lender could modify your mortgage. They may extend it for a longer term, change to a lower interest rate, or even forgive some of the principal balance on the loan.

To qualify for the loan program, you must have a payment that is over 31 percent of your gross income, be able to show you have problems making the payments, and the home must be your primary residence. There are also income limits with this program.

If you do not qualify for either of these options, don’t assume it’s hopeless. Talk to your lender and discuss the possibility of refinancing. Many lenders are willing to work with you even if the program is not backed by the government. Lenders don’t want the hassle of a foreclosure if they can get the payment from you, even in the form of a modification.

Even if you are underwater on your mortgage, there are options for refinancing. You just have to work a little harder to find them.

Winter Housing Décor Trends

If you’re a fan of the cold and snow that comes with winter, you may want to find a way to bring the outdoors into your home. There are several unique and interesting ways to bring a touch of winter into your living space without losing the warmth of the room. Here are a few suggestions.

Create an Outdoor Design

Create an image that reminds you of the outdoors and print it onto low-tack vinyl that you can attach to a fireplace or wall. For those who are artistic and can work freestyle, paint an outdoor scene onto an accent wall. It can be an entire landscape or just an image of a deer or animal playing in the snow.

Use Silver and White

Create an instant feel of snow and ice with the use of silver and white around your home. Use all white or silver objects for your fireplace mantle or add white flowers as a table centerpiece. White coverlets can lie over the back of a chair or couch. Add as many items as you can in these two colors to create the impression of a blanket of soft snow in the room.

Add Outdoor Items

Add things typically used outside in the winter as decorations for your room. It could be a sled, a pair of ice skates, or a miniature sleigh that add a touch of whimsy to a room.

Use a Cool Blue and Shimmer

Another color palette that adds to the feel of the outdoors is a cool, icy blue. You can paint your walls, add pillows to the seating area, or a tablecloth to an end or dining table. Incorporate shimmer and shine with mirrors and silk material that allow light to reflect off of it to add to the feel of ice or snow from outdoors.

For a bedroom, this may include bedcoverings and drapes that give the impression of frost. It will make you want to snuggle under the covers to get warm.

Add Images of winter

Buy framed pictures with scenes of winter or take your own photos and have them matted and placed on the wall. Add items that use snowflakes or icicles in their design to give the room a wintery touch. A branch with no leaves also gives the impression of winter and can be used in place of other plants in a room.

A centerpiece of greenery with white pearls and beads gives a wintery feel to a dining table or coffee table. You can also arrange them on a chandelier or take an arrangement and spray paint it all white to give the appearance that it is bathed in snow.

Whether you’re looking for small touches or a grand design, you can bring a bit of the winter weather indoors. You can go all out or stay within a tight budget to create the cool outdoors feeling. With these ideas you can make your winter landscape fun, whimsical, or sophisticated.

How to Sell Your Home During the Holidays

‘Tis the season for selling your home, say real estate experts. A recent survey conducted by Realtor.com found that out of 429 real estate experts, over 60 percent always recommend sellers to list homes during the holiday season. While many sellers may want to wait until after the new year to list their home, real estate pros suggest listing during the holiday season to capture the market’s most serious buyers. If you’re considering listing your home over the holidays, follow these steps to ensure that your home is sold.

Know Your Buyers

Buyers have fewer choices during the holiday season, which means there is less competition for the seller. Holiday season buyers are often more serious because they’ve given themselves an end-of-the-year deadline for tax purposes. During the holiday season, home buyers tend to be more emotional, often bidding a higher price than they would at a different time of year.

Decorate for the Season

Homes decorated for the holidays show better because they look more inviting and cozier, especially in the cold winter months. It goes without saying, but before you decorate anything, you should clean and prep your home for staging. Decorations should be tasteful, without being too overbearing. They should also match the vibe of your home. For instance, if your home has cool blue tones, pick decorations like a silver ball wreath or white snowflake wall decals that mesh well with those hues.

Clear the Curb of Leaves, Snow, and Ice

With trees losing leaves left and right, curbside views of homes often feel more exposed. Make curb appeal a top priority and touch up the exterior paint, clean the gutters, and tidy the yard. If you regularly have snowfall and ice, keep sidewalks, stairs, and pathways to the home free of slippery ice and other hazards.

Create a Virtual Tour

Because of greater risk of inclement weather, virtual tours are vitally important to selling homes during the holidays. By making an attractive virtual tour of your home and posting it to free hosting websites like FlyInside.com, you provide potential buyers a digital way of exploring your home. If you don’t have a way to shoot video, you can take still photos to create a virtual tour of your home.

Don’t Let a Holiday Vacation Stop You from Listing

If you’re hesitating to list your home because you’ve got vacation plans, you’ve got no reason to worry. You can still list your home on the market and go on your holiday vacation. Restrict showing dates to all days except when you’re traveling or visiting family. You can also delay the closing day to squeeze in a few days of holiday cheer.

Remember, listing your home during the holidays can get you a better price because supply in the market is more limited and many buyers are looking to buy before the end of the year. Plus, once your home is sold, you’ll have an extra reason for celebrating the holiday season.

Home Remodeling On the Rise

According to the National Association of Home Builders, home remodeling projects have seen a strong uptrend this year, back toward 2005 when the housing market was at its peak. Even though we are nowhere close to that now, these numbers show more consumer confidence in the market. Repairs and improvements that had been put off are now being taken on. So, what are the best improvements you can make to increase the value of your home today?

Kitchens

Kitchens have taken over the top spot for most popular renovations project. This is an indication that people are focusing more on luxury instead of necessity. They are generally the most expensive remodel and can take the longest time to complete. The estimate for an average kitchen remodeling was around $100,000.

While the return on investment for a kitchen is only around 66 percent, it can be a worthwhile investment for selling your home. Most buyers look at a kitchen first and will buy or pass on a house based on that room alone. However, don’t do an expensive remodel if your kitchen only needs a few updates. A home that has a more expensive kitchen than others in the area will be overpriced for the neighborhood.

Bathrooms

This is another area that can make or break a sale, especially for a master bath. Don’t skimp on that room since it’s supposed to be luxurious. Install two sinks, custom showers, and plenty of correct lighting. Outdated bathrooms require a lot of work, so buyers want to see that work already completed to pay top price for a home. Size is a big deal, so if you plan to remodel the bath, try to find additional space.

Attic Bedrooms

If you have attic space that’s unused, converting it into a bedroom is a great idea. When you add square footage onto a home, you are making a great investment. Most homeowners are happy to have an additional bedroom, because in reality, it can work for many purposes, including a den, office, guest bedroom, or hobby space.

Renovations to Avoid

Don’t bother creating a permanent home office. Even though more people are working from home, they often don’t use a designated space; rather, they combine it with a guest room or hobby room. If you put in office furniture, make sure it’s removable.

Sunrooms are also not popular, except possibly in regions where they can be used year-round. This is one addition that results in the lowest return on investment. Unless you’re installing one for your enjoyment and plan to stay in the house for several years, it will be a waste of money.

Now may be a good time to begin thinking about renovating your home, but only if you choose the right things to spend your money on. Make sure you are updating your home for the right reasons and choose the best project if you plan to sell.

Is a Housing Boom on the Way?

If you look at statistics and the available information, it looks like the housing market is not only recovering, but heading towards a possible boom. That is good news for homeowners.

-Foreclosures are down.

-Home prices are rising.

-Home sales and construction is up.

-Mortgage rates are still at rock bottom.

This is the perfect climate for an explosion in the housing market. Even though many experts expect a slow and steady climb, a few are predicting a much stronger recovery.

Demand for More Housing

Experts who believe that a strong increase in sales is likely say that the market has been well below normal for 5 years, and that has resulted in more people who are waiting to see an improvement. They will flood the market as things continue to improve. They also expect housing prices to start seeing gains of between 5 and 7.5 percent per year.

Others predict an increase of at least 20 percent in new construction for each of the next two years. These predictions are bolstered by the numbers we are already seeing. Housing was up again in September by 15 percent, with 11 percent towards increase in new home construction, and another 25 percent in apartment construction. That kind of improvement will mean more jobs in the industry.

The Ripple Effect

As the housing market sees an improvement, it will extend into other areas, too. The housing business is already seeing an increase in the price of stocks, and that is expected to continue into relevant industries, such as carpeting, drywall, kitchen fixtures, and others. This will bring an increase in jobs in these areas, which will allow more people to afford a home, driving sales and demand even higher.

Analysts predict that four million jobs will be added to the economy over the next five years. This will bring about an improvement in the nation’s economy in many areas. Historically, the housing market has had a strong influence on the rest of the economy, and that trend will continue.

Strict Lending Requirements

The one thing that could hold back this major improvement is the difficulty for homeowners in getting a loan. Because of the housing collapse and the massive number of foreclosures that resulted, many lenders have raised their lending requirements. This makes it difficult for borrowers to qualify for a loan and limits the number of people who can buy a home.

Experts say that the increase in sales is due in part to corporations buying up cheap properties that are not the traditional buying market. Until more buyers can qualify for a home loan, experts predict limited improvements.

Regardless of the limitations on the lending industry, the numbers are making people more hopeful. An improvement in the housing industry will help other areas of the economy. Even if the predictions prove incorrect, things are heading in the right direction. In this case, all news is good news.

10 Questions to Ask Your Mortgage Lender

When you’re looking for a mortgage, it’s vital to ask certain questions to each of your potential lenders so that you can make a fair comparison. Here’s our guide of the ten most essential questions to ask your lender.

1. What is the interest rate?

Rates are constantly in flux. Your interest rate on a mortgage is determined both on national rates as well as your credit. In case your lender doesn’t go into the details, here are some excellent tangential questions to ask during this conversation: is this a fixed or variable rate? Is this the best rate for my credit score?

2. What will I pay for discount and origination points?

You probably pay attention to mortgage rates, but it’s also important to consider a mortgage company’s “points.” Ask your lender to explain these types of points and where they come from. They can be cost-effective, but you’ll want to ask the lender for a chart, as shown in this example.

3. What are the closing costs?

Closing costs can be financed along with your mortgage or you can pay for them out-of-pocket. You can use an online calculator to determine approximate closing costs, but before you make the decision to obtain the mortgage, be sure to ask your lender what those fees add up to.

4. When can I lock in the rate?

In a volatile housing market, it can be crucial to lock in the lowest possible rates so that they don’t rise unexpectedly during the loan processing period. A locked-in interest rate is valid for a specific number of days; typically 30 days. As you might imagine, by locking in the rate, you won’t risk getting stuck with a higher interest rate; though you won’t be able to lower your rate if interest rates drop.

5. Are there any prepayment penalties?

It may be wishful thinking on your part, but it’s still good to know whether or not there will be a penalty should you pay off the loan or refinance it before the allotted time period is over. When you ask about prepayment penalties, find out how the penalty is calculated and the duration of the penalty period. If prepayment penalties aren’t a problem for you, your lender may agree to lower interest terms.

6. What is the minimum down payment?

Your mortgage will be based on the amount of money you can put down on the loan first. Typically, the larger your down payment, the better your loan terms – including monthly payments, and interest rates.

7. What are the qualifying guidelines?

Your application for the loan will be a complete dossier of your life, and most of those documents will contribute to the loan’s qualifying guidelines. These requirements can be your credit history, income, employment, assets, and any liabilities, such as current debt. For those who worry about obtaining a loan, Veteran’s Association loans, first-time buyer programs, and government-backed loans have less stringent requirements, though they may require mortgage insurance and have higher rates.

8. What are the required documents for a loan application?

Most lenders will require a proof of identity, income, and assets, including bank account statements, investments statements, current loans and debts, and values of life insurance policies and personal property, like cars.

9. How long does loan processing take?

Get their best guess, but assume that most processing will take 45 to 60 days.

10. What may cause my loan to be delayed?

The length of time for loan processing depends a lot on how thorough your documentation is. As long as you’ve provided all the information accurately, the processing shouldn’t get held up. However, if the lender uncovers credit problems, it could delay the approval process. Also, be sure to notify your lender of any changes about your job, income, marital status, and/or debt.

Predicting the Future of the Housing Market

It’s been a long road back up from the bottom to where we’re at right now, and we still have a long way to go to get where we were before the crisis. However, several factors indicate a positive outlook for the housing market in the next few months.

Home Prices and Sales

The last S&P/Case-Shiller Home Price Index showed that prices for homes have gained in July compared to the previous year. All 20 cities showed an improvement from the prior month, and 16 of them showed an improvement from the previous year.

Prices are not the only thing gaining ground; sales have also improved. Sales of existing homes have had a national increase of 9 percent from the previous year. Consistent improvements in both sales of homes and prices are good indicators of a recovery.

Building permits have also experienced an increase, which means more homes will be built in the near future. This indicates that new home builders expect continued improvements and more demand for new housing. In some areas, houses that haven’t even been built are already sold. This shows an increased confidence in home buying and that more people are looking at brand new homes.

What the Future Holds

While all of this is good news and indicates that the housing market is steadily on the rise, it doesn’t mean drastic improvements are in store. The improvements will be modest at best because of other issues, including a lackluster job market and continuing credit issues. Shadow inventory is another concern, as foreclosures are still on the market.

Because of reduced inventory in some markets, experts predict a faster recovery in those areas, since new housing won’t be available for some time. This could mean that areas such as Phoenix and San Francisco could see home values rise at a faster rate than the national average. Notwithstanding, mandatory down payments and tightened lending requirements still prevent potential homeowners from obtaining the financing they need to acquire a house. While the promise of government backed funding for loans will likely result in a further reduction of mortgage rates, the poor job market will delay many buyers from jumping into homeownership.

After looking at all of the data, many experts are saying that the worst is behind us for the housing market, but that the recovery will be slow and steady rather than explosive. Some markets will show a faster improvement than others. Cities like Phoenix and Miami will probably see a much better housing market than places like Chicago and Atlanta that have seen slow improvements.

With low rates and decreased home values, it’s still a good time for buyers to get in the market, and it will probably stay that way for a while. Those looking for the right time to buy a home, now may be as good a time as any.

Home Prices Rising Faster Than Expected

With the release of the latest home price index from S&P/Case-Shiller, all signs point towards a speedy housing recovery. While unemployment rates and lackluster consumer confidence continue to be a lag on the U.S. economy, the housing sector is a definite bright spot, spurring economic growth.

For the fourth consecutive month, prices for single-family houses have risen across 20 American cities. Average home prices rose 1.5 percent in July, surpassing economists’ predictions by .2 percent. The increase is also over 6 percent higher than the index recorded in March of this year.

This upward trend adds to the growing consensus that the housing market has finally bottomed out and is on the mend. Last spring, home values were depreciating nationally, but have since rebounded, though they remain 30 percent below their value in 2006.

“Stronger housing numbers are a positive factor for other measures including consumer confidence,” said David Blitzer, chairman of the S&P index committee.

“The news on home prices in this report confirms recent good news about housing. Single family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down, and foreclosure activity is slowing. All in all, we are more optimistic about housing. Upbeat trends continue. For the third time in a row, all 20 cities and both Composites had monthly gains. Stronger housing numbers are a positive factor for other measures including consumer confidence,” said Blitzer in a statement.

Ivy Zelman of research firm Zelman & Associates echoed Blitzer’s statement. “Housing is no longer a negative. It is turning positive and we see the data reflecting that,” Zelman said.

Comparing year-over-year prices the index shows that prices in 16 of the 20 cities surveyed have improved since July 2011. The four cities still in the red compared to last year include, Chicago, Las Vegas, New York, and Atlanta. Atlanta has by far the weakest market, with home values nearly 10 percent lower than they were in 2011. Moreover, in Atlanta, Detroit, and New York, a home costs less than it did in January 2000.

So even with signs of a strong recovery, there remains a lot of ground to cover. According to housingviews.com, the S&P’s new blog that offers commentary and analysis on housing topics, it will take much time to get back to home price levels seen in the early 2000s.

Fortunately, a boom in home construction has taken the industry by storm, reaching the highest levels seen in two years.

How to Find a Handyman for Your Home Repairs

Do you have projects around the house that you can’t find time for or don’t have the expertise? If they’re too big for you because of time or know-how and too small for big contractors, you can hire a handyman. However, you need to know who can get the job done correctly and at a fair price. Here are some tips to help you with your search.

Talk to Local Hardware Stores

If you need recommendations, a local hardware store will know the best names. Unlike the large chain home improvement store, they won’t have their own team to recommend. However, they will know who frequents their store and who has a good reputation. They will also hear the complaints about the handymen you will want to avoid.

Don’t Choose Solely on Price

The lowest bid is not always the best one. Ask for references and go with your instinct. Remember that you’re saving money anyway since you aren’t using a general contractor, so don’t be afraid to pick the higher priced handyman.

Get More Than One Bid

For jobs that will take a couple of hours or ones that you don’t have an idea of a fair price, get multiple bids. While the bids may vary, they should be around the same price. You can also ask friends who have replaced a kitchen faucet or repaired a broken door lock about how long the job should take. That will give you an idea of the price based on an hourly rate.

Start Small

Don’t wait until everything in your house is falling apart. Contact a handyman with a small job. Try him out on something that should take less than an hour. Ideally, it will be a job that you know how to do if only you had the time. This way you can inspect his work to make sure it was done correctly. You will also know how long it should take and if he charged a fair price.

If he didn’t satisfy on the small job, look elsewhere. If he did a good job and you are pleased, try him out on a bigger project. After you’ve tested his skills on a few projects and are happy with the results, you can count on him for bigger jobs that you don’t know as much about.

Set a Limit

Many handymen do not like to give estimates for their work. This is not because they’re trying to cheat you out of money; many simple jobs are hard to estimate. A job that seems easy can turn complicated and may take hours to complete. They don’t want to be locked into a price that doesn’t pay them for their time. However, you don’t want to be stuck with a $50 bill that turns into $1,000. Set a limit on how much work they can do before they contact you; then you can decide if you want to approve more.