Fannie to Offer Closing Cost Aid on Foreclosures

Fannie Mae, the largest provider of residential home funding in the United States, announced Friday that it would pay the closing costs on purchases of foreclosed homes in its inventory.

The government-controlled company said buyers of qualified properties will get up to 3.5 percent in closing costs, or an equivalent amount for the purchase of new appliances.

The goal of Fannie is to clear out the nearly 50,000 properties it has in inventory— listed on HomePath.com, the Web site created by Fannie Mae last year to sell the growing number of foreclosed homes.

“Attracting qualified buyers to the market and reducing inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover,” said Terry Edwards, executive vice president for credit portfolio management, in a statement.

Source: Reuters News, Al Yoon (01/28//2010)

4 Demographic Trends That Will Affect Housing

A new report from the Urban Land Institute predicts two major changes in the U.S. housing market as we began a new decade.

• Home appreciation will slow considerably to about 1 percent to 2 percent annually.
• The current U.S. homeownership rate, now at 67 percent (which is down from a record high of 69 percent), will fall further to about 62 percent.

4 Major Demographic Trends

The report also cites four major U.S. demographic trends that will have a major impact on housing.

1. Aging baby boomers (ages 55 to 64 years old): They will keep working, and many will be forced to stay in their suburban homes until values recover. Those who are able to move will choose mixed-age living environments that cater to active lifestyles. Walkable suburban town centers also will appeal to this group.

2. Younger baby boomers (46 to 54 years old): They are now entering their prime earning years but they will lack home equity and unlike the older members of their generation, they won’t be able to purchase second homes. This will likely curb the prospects for the second-home market.

3. Generation Y: They are larger than the baby boom generation (with a population of about 86 million). As they enter the housing market, they are less interested in homeownership than their parents were when they were young adults. “They will be renters by necessity or choice for years ahead,” says John K. McIlwain, author of the report.

4. Immigrants – both legal and illegal: They are nearly 40 million strong. They often prefer multi-generational households and if they can afford them, larger homes in neighborhoods with a strong sense of community.

Source: The Urban Land Institute (01/27/2010)

Public Is Slow to Embrace Green Housing

Nearly 99 percent of American homes are damp, drafty, noisy, and expensive to heat and cool, says Aleisha Khan, executive director of the Building Codes Assistance project, who blames the conditions on reluctance among states to adopt the International Energy Conservation Code.

Kahn says states are legally required to at least consider the IECC, but there is no requirement for adoption. Some states, like Alabama, have completely refused to even bring the code before their legislature. Khan calls the plethora of energy regulations “a mess.”

Currently, the U.S. House of Representatives is considering a climate bill that would require a nationwide energy efficiency code.

What are its chances for passage? Edward Vine, an energy efficiency expert at the California Institute for Energy and the Environment says adoption of strict energy efficiency standard will happen when consumers want it to. “That’s where I’d focus most of my energy,” he said. “We have to change the mentality of people.”

Source: The Daily Climate, Andrew McGlashen (01/25/2010)

Freddie Mac CEO: Housing Is Near Bottom

The inventory of foreclosed houses still hampers the recovery of the housing sector, but overall, the U.S. housing market appears to be at or near bottom, Freddie Mac CEO Charles Haldeman told the Detroit Economic Club on Tuesday.

He predicted that the 30-year fixed mortgage rate would remain between 5 percent and 6 percent through 2010.

“The big downside risk to all this is a large wave of homes now in foreclosure potentially hitting the market at prices that are destructive,” Haldeman said.

Source: Reuters News, Soyoung Kim (01/26/2010)

White Lies Some Sellers Tell

About 30 states have disclosure laws that require sellers to tell prospective buyers about any problems, but in this tough market, some sellers aren’t as forthcoming as they should be.

Here’s a short list of white lies and misrepresentations that real estate practitioners and regulators say are common and that buyers should be wary of as they shop for a new home:

• This room and this lot are really big. Some sellers are inclined to exaggerate, but smaller dimensions can result in a lower appraisal, the leading cause of scuttled deals. New York real estate attorney Michel Xylas recommends a carefully worded appraisal contingency in the purchase contract.
• There has never been significant damage from a disaster here. Buyers can find out a home’s history of property damage by buying a report from the Comprehensive Loss Underwriting Exchange (CLUE).
• Taxes and heating costs are low. Ask to see recent bills and get up-to-date information from the tax assessor’s office. Look for unrecorded improvements like decks and finished basements.

Source: The Wall Street Journal, M.P. McQueen (01/14/2010)

Good Neighbor Award Winner Heading to Haiti

As rescue and aid workers labor to save lives and bring relief to the people of Haiti after Tuesday’s devastating earthquake, Patrick Moore, a 2007 winner of REALTOR® Magazine’s Good Neighbor Awards, is preparing for his 64th trip to the island nation.

Moore, a sales associate with JoAnn Wine and Associates in Fort Gratiot, Mich., won the Good Neighbor Award for his work as the founder and director of the nonprofit humanitarian outreach group The Harvest of Haiti. He was planning his Jan. 29 trip well before the earthquake hit. His mission: to deliver six months of food for the orphanage his group set up in the mountainous village of Anse Rouge.

The orphanage was not directly harmed in the disaster, though Moore expects it will be impossible for him to travel there now given its remote location. He says he’s intent on finding some way to get the supplies delivered. He’s also going to do all he can for Haitians affected by the earthquake. Moore and two associates will focus on helping residents in communities in and around Port-au-prince that were hit hardest.

“The two things people need most are food and antibiotics. I’ve gotten a hundred phone calls in the two days after the earthquake from people wanting to support us,” he says. Besides the orphanage in Anse Rouge, Harvest of Haiti aids three villages on an ongoing basis and supports another orphanage close to the capital city that was heavily damaged. “We’re planning to bring two dozen pup tents so the children don’t have to sleep outside,” he says. “We’ll also deliver medical supplies and staples like tuna fish and peanut butter.”

Moore says he’s frustrated that bringing the maximum amount of luggage filled with supplies—five bags each—will incur extra airline charges of $900 for the three men. Fortunately, supporters have come forward with money to help fund the transport, he says.

If there’s a silver lining to the disaster, it may be that the devastating earthquake will serve as a wake-up call to the world that could lead to permanent changes for the better for this disaster-prone nation, Moore says. “The governments of the world will realize how bad off the people were even before this and how huge the problems were. There may be a will to fix things.”

He maintains optimism that outside aid, including private donations and at least $100 million from the Obama Administration, will help the country start afresh. “But there’s no way the Haitian government can be trusted to make the right decisions,” he says. “Someone else will (need to) be managing the purse strings.”

On Friday afternoon, members of the REALTORS® Relief Foundation board were meeting to discuss how the NATIONAL ASSOCIATION of REALTORS® might aid the devastated country. Direct, tax-deductible contribution to The Harvest of Haiti (especially appreciated before Moore’s Jan. 29 departure) may be sent to The Harvest of Haiti, 4233 State Road, Fort Gratiot, MI 48059.

Read Pat Moore’s story and watch a video from REALTOR® Magazine.

- By Wendy Cole, REALTOR® Magazine

Increase Appeal by Adding a Little Green

Eco-friendly homes are hot these days, and one way to make a property more saleable is to add a little green.

Real estate Web site HomeGain asked about 1,000 real estate practitioners to recommend low-cost green improvements. Here are some of their suggestions:

• Plant native trees and plants
• Replace air filters
• Weather-strip and caulk doors and windows
• Install programmable thermostats
• Install low-flow showerheads
• Install CFL or LED lights
• Repaint with low VOC (volatile organic compound) paint

Source: USA Today (10/14/2010)

Retail Vacancies Rise, While Rents Decline

Vacancies at strip malls and regional malls are at record highs, says real estate research firm Reis Inc.

Strip malls had a vacancy rate of 10.6 percent in the fourth quarter, the highest in 18 years. The vacancy rate at regional malls reached 8.8 percent in the fourth quarter, the highest since Reis started tracking regional mall performance.

Asking rent for strip malls fell 2.05 year over year to $19.12 per square foot. Asking rents for malls fell 0.4 percent to $39.03 per square foot.

“Our outlook for retail properties as a whole is bleak,” said Reis Economist Ryan Severino in a report released Wednesday. “Until we see stabilization and recovery take root in both consumer spending and business spending and employment, we do not foresee a recovery in the retail sector until late 2012 at the earliest.”

Source: Reuters News, Ilaina Jonas (01/06/2010)

Sellers Should List Homes Early

Selling a home in the dead of winter might seem ill-advised, particularly considering the state of the economy, but some experts think that making the decision to wait until spring to list the property could be a mistake.

Government incentives will likely have a big impact in 2010, with many buyers determined to sign a contract before the April 30 tax credit deadline.

“This year, we’re anticipating sales will peak earlier,” says Nicole Hall, editor in chief of Lendingtree.com, an online mortgage comparison service. “The best time to get your house on the market will be February or early March, and maybe even earlier if you want to avoid competition.”

Traffic on real estate Web sites begins to rise right after the New Year, says Ken Shuman, spokesman for real estate Web site Trulia.com.

Source: Forbes.com, Francesca Levy (12/24/2009)

Inheriting Property Could Get Complicated

If the U.S. Senate fails to pass an estate tax bill, the estate tax disappears Jan. 1. But it’s not all good news. By law, the tax will reappear in 2011 with higher rates and lower exclusions.
 
Under the law that takes effect Jan. 1, taxpayers will face capital gains taxes on inherited property. The tax will be calculated on the original cost of the property to the person who has died. This could be extraordinarily complicated: “How much did grandpa pay for that piece of property 75 years ago?”
 
It is likely that the Senate will pass a one-year extension of the current law, with a retroactive date to Jan. 1, 2010, buying time to fix the situation. But that will almost certainly result in a rash of lawsuits that could make inheriting property in 2010 no less murky.

Source: Washington Post Writers Group, Kenneth R. Harney (12/28/2009