5 Reasons you should list your home today

5 Reasons You Should List Your House TODAY! Posted: 28 Jan 2013 04:00 AM PST Many homeowners are waiting until the Spring ‘buying season’ to list their homes for sale. Here are five reasons why that might not make sense this year: 1.) Demand Is High Homes are selling at a pace not seen since 2007. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that annual sales in 2012 increased 9.2% over 2011. There are buyers out there right now and they are serious about purchasing. 2.) Supply Is Low The monthly supply of houses for sale is at its lowest point (4.4 months) since May of 2005. The current month’s supply is down 21.6% from the same time last year. Historically, inventory increases dramatically in the spring. Selling now when demand is high and supply is low may garner you your best price. 3.) New Construction Is Coming Back Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative to many purchasers. 4.) Interest Rates Are Projected to Inch Up The Mortgage Bankers’ Association has projected mortgage interest rates will inch up approximately one full point in 2013. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home. 5.) Timelines Will Be Shorter The dramatic increase in transactions caused many challenges to the process of buying or selling a home in 2012. We waited for inspections, dealt with last minute appraisals and prayed that the bank didn’t ask for ‘just one more piece of paper’ before issuing a commitment on the mortgage. There are fewer transactions this time of year. That means that timetables on each component of the home buying process will be friendlier for those involved in transactions over the next 90 days. These are five good reasons why you should consider listing your house today instead of waiting.

BELIEVE IN HOMEOWNERSHIP BY AGE GROUP

Six Reasons Housing Inventory Keeps Declining

Home sales in December dropped by 1% from November, the National Association of Realtors reported on Tuesday, but still stood nearly 13% above the levels of one year ago. That means home sales have risen from the year-ago month for 18 straight months.

For 2012 as a whole, sales were up 9% to 4.65 million units, the highest annual total since 2007.

Prices, meanwhile, are picking up because the number of homes for sale continues to drop despite the sales volume gains. The number of homes for sale fell to 1.82 million at the end of 2012, an 8.5% drop from November and a 21.6% decline from one year earlier, the Realtors’ group said on Tuesday.

Here’s a breakdown of why inventory has continued to drop this year:

Many homeowners are underwater: More than 10 million homeowners owe more on their mortgage than their homes are worth, according to CoreLogic Inc. CLGX -0.70% That pencils out to around 22% of homeowners with a mortgage, or 15% of all homeowners (since not every homeowner has a mortgage). Underwater owners aren’t likely to sell unless they need to move due to changing life (marriage, divorce) or financial circumstances, and they’ll take a hit on their credit for pursuing a short sale, where the bank allows the home to sell for less than the amount owed.Data from CoreLogic show that inventory has been the most constrained in housing markets where there’s the largest concentration of underwater borrowers.

Others don’t have enough equity to “trade up”: Another 10 million homeowners have less than 20% equity in their current residence, meaning they can’t easily “trade up” to their next house. Traditionally, homeowners have relied on home equity to make the down payment on their next home, and to pay their real-estate agent to sell their current home and buy their next one. These “under-equitied” homeowners—meaning they don’t have enough equity to make a move to a more expensive home—have added to the drag on inventory.

Everyone wants to buy at the bottom, but few want to sell: Even those people who do have plenty of home equity are likely reluctant to sell if they think prices will be higher tomorrow. Would you sell your largest asset today if you thought it might be worth 5% more next year? This helps explain why markets such as Denver and Dallas, which didn’t have huge housing bubbles and thus had smaller shares of underwater borrowers, have also seen double-digit inventory declines.

More purchases from investors of all stripes: From the big institutional investors that have been grabbing all the headlines, to the mom-and-pop landlords that have traditionally played a much larger role renting out homes, investors have increasingly bought homes that can be rented out rather than flipped and resold for quick profits. This is further keeping inventory off the market in two ways: homes that are bought at courthouse foreclosure auctions never show up on multiple-listing services when they’re initially sold. They’re also held out of the for-sale pool because they’re being rented out.

Banks have been slower at foreclosing: Banks and other companies that process delinquent mortgages have had trouble proving that they’ve followed state law in taking title to homes ever since the “robo-signing” scandal surfaced in late 2010, and they’ve also had to meet a host of new state and federal rules governing loan modifications and foreclosures from settlements spawned by the robo-scandal. Banks have also become better about approving short sales and loan modifications, which has curbed the flow of foreclosed properties onto the market.

Builders have been putting up fewer homes: Housing starts were severely depressed from 2009 through 2011 and have only recently rebounded off of those low levels. Consequently, there’s been much less new home inventory being added to the market at a time when demand (boosted by increases in household formation) is picking up. If more homes are held off the market—for any of the five reasons above—you can bet that builders will move in to fill the void.

Many of these factors that have been dragging down inventory aren’t signs of “normal” or “healthy” housing markets—but then, we probably haven’t had a normal market for around a decade now. If anything, declining inventory shows that normal supply-and-demand dynamics are returning, which is an important step towards putting a floor under home prices and giving markets time to get back to health.

Negative Equity: The Latest Statistics

Will 20% Soon Be the Minimum Down Payment on a Home?

Several government agencies are reviewing data to determine what will be the minimum down payment required under the new Qualified Residential Mortgage (QRM)guidelines scheduled to be revealed in the next few months. In the originalMortgage Market Note issued by the FHFA, it was suggested that loan-to-value (the percentage of the overall purchase price which was being borrowed) was a major factor in determining if a loan would default:

“For most origination years, requirements for borrower credit score and loan-to-value ratio are the factors that most reduce the ever-90-day delinquency rate of mortgagesacquired by the Enterprises that would have met the proposed QRM standards.”

The note then made the following proposal:

“An LTV ratio qualified residential mortgage must meet a minimum LTV ratio that varies according to the purpose for which the mortgage was originated. For home purchase mortgages, rate and term refinances, and cash-out refinances,the LTV ratios are 80, 75, and 70 percent, respectively.”

Basically, the original note suggested that a 20% down payment should be the new guideline. We realize that there has been much debate on this issue since and that the minimum down payment required under the new QRM guidelines will probably be less than 20%. However, we can’t know for sure.

Bloomberg reported last week:

“The six regulators drafting the separate QRM rule, including the Department of Housing and Urban Development, the Office of the Comptroller of the Currency and the Securities and Exchange Commission, must decide whether to include such a requirement — and whether to make it less than the 20 percent they originally proposed.”

Will it be more difficult to qualify for a mortgage after the new QRM rules are announced? Probably

As David Stevens, President of the Mortgage Bankers Association said during a speech in Washington on Jan. 16:

“I have consistently warned of the regulatory tidal wave to come and it’s finally upon us. These changes will impact business operations and the future of mortgage access for years to come.”

Top Ten Things You should Know About the 3.8% Tax

1. When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will not be subject to this tax.
2. The 3.8% tax will never be collected as a transfer tax on real estate of any type, so you’ll never pay this tax at the time that you purchase a home or other investment property.
3. You’ll never pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.
4. If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will not pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.
5. The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents after expenses).
6. The tax goes into effect in 2013. If you have investment income in 2013, you won’t pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.
7. In any particular year, if you have no income from capital gains, rents, interest or dividends, you’ll never pay this tax, even if you have millions of dollars of other types of income.
8. The formula that determines the amount of 3.8% tax due will always protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would never be imposed on more than $1,000.
9. It’s true that investment income from rents on an investment property could be subject to the 3.8% tax. But: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.
10. The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.

WHAT IT TOOK TO GET A MORTGAGE IN 2012

6% Rise in Home Prices predicted for 2013

CoreLogic projects 6 percent rise in home prices in 2013
The CoreLogic Home Price Index (HPI), which is based on repeat sales, increased 7.5 percent in 2012, the largest increase since 2006. In 2013, CoreLogic projects home prices to rise 6 percent due to greater affordability fueling steady demand, a lower level of real estate-owned (REO) sales and a low inventory of unsold homes.

Additional key findings in the January report include:

• Housing made an impressive recovery in 2012: Total homes sales increased 6 percent to 4.2 million, up from 3.9 million in 2011 – the first increase since 2005.
• Non-distressed homes sales increased 11 percent to 3.2 million.
• New sales increased 3 percent to nearly 300,000.
• Home price growth happened across many geographies.
• REO sales declined more than 20 percent to 600,000, the third annual consecutive decline.
• Short sales rose 23 percent to 370,000 units, the highest level since the real estate downturn began.
• Serious delinquencies declined by nearly 300,000 loans in 2012, which drove the seriously delinquent rate down to 6.9 percent, from 7.4 percent in 2011. Since the January 2010 peak, serious delinquencies have declined by 1 million loans.
• The housing market enters 2013 poised for further recovery: Rising home prices will continue to slowly release pent-up supply as under-equitied borrowers are unlocked and opportunistic sellers begin to provide relief to tight inventories.
• Geographic diversity in home price growth will continue.
• CoreLogic expects continued market improvement in serious delinquencies
• Despite improvements and a positive outlook for the coming year, uncertainty remains on the impact of qualified mortgage and qualified residential mortgage requirements.

Owning A Home is Still the Dream

"10 Easy Bathroom Updates"

Updating an existing washroom doesn’t have to be a time-consuming and expensive project. Instead, try making small changes for an instant style update.

Before you get started, be sure to de-clutter. Remove all the items in your bathroom that are unusable and outdated. Clean out cabinets and toss away old and expired products. This will get rid of any unnecessary clutter and give you a clean slate to work with.

1. New bathroom accessories

An easy way to update your look is to purchase new accessories for your bathroom such as toilet brush holders, storage bins, soap dishes and toothbrush holders. These items can often be bought in sets or you can create your own eclectic look by mixing and matching. Choose something out of the ordinary like a bamboo set that really lends a spa-like feel to the bathroom. The clean lines and simplicity of these accessories will add interest without overpowering the space.

2. Shower curtain

I usually tend to choose a pattern for the shower curtain in order to create visual interest in the space. A large print (geometric or floral) is a stunning addition to an otherwise dull room. Adding a shower curtain with cheerful colours is a good way to brighten up a space, but if you find colour too intimidating, a black and white pattern is a clean and classic alternative.

3. Cabinet hardware

Try looking for unique handles for your existing cabinetry. Good places to hunt for these may be antique markets or small boutiques which collect vintage items. Look for materials other than metals, such as glass or acrylic, which can really add some interest to your vanity.

4. Bath mats

I am normally not a fan of your standard fabric bath mat, as I find them difficult to keep clean, especially with large families. Try a mat made of treated wood which can withstand water and dirt. They are easier to maintain and bring an element of individuality to your bathroom.

5. Fresh towels

The simple act of buying new towels can make a big difference in the overall appearance of your space. Towels are used frequently and can easily lose their shape and colour, making them drab and dull.

6. Paint colours

A fresh coat of paint can also revitalize a space. Bathrooms are usually smaller rooms, so don’t be afraid to use colour on your walls. Keep things fresh and clean by using crisp blues and greens such as my favourites Benjamin Moore Celadon Green 2028-60 or Blue Angel 2058-70.

7. Paint the vanity.

A lot of older city homes, including 50s bungalows, will usually have painted wood vanities with storage. If it isn’t within your budget to change your vanity entirely, try painting it a new colour, preferably something light that will contrast against the bright colours of the wall. Try Benjamin Moore Chantilly Lace OC-65 or Snow White OC-66.

8. Sophisticated soaps

Spoil yourself with luxurious soaps, both for in the bath and on the vanity. The delicate scent of the soaps can create a fragrant aroma in the room without being overpowering. Try the Savon De Marseille line of soap made in France. The sleek packaging alone will add a punch of colour and sophistication to your bathroom.

9. Small occasional chair

Whether it is brand new or a reupholstered and refinished vintage piece, an occasional chair neatly tucked into a corner is another great way to introduce colour into your space. If the chair requires fabric, be sure to choose something that coordinates with the shower curtain and paint colours. If the chair has a frame, try painting it the same colour as the vanity to create a cohesive set.

10. Artwork

Create a bold artistic statement by adding an interesting piece of artwork to an otherwise blank wall. Choosing one special accent is a great way to tie the entire room together. Try picking something with a graphic pattern that is neutral enough to withstand changing colour schemes.

Writing the "Hardship Letter"

Writing the “hardship letter”
Homeowners having trouble paying their mortgage are often required to write a hardship letter when applying for a loan modification.  Such a letter is a requirement for modification applications under the government’s Making Home Affordable program.

Making sense of the story

• A hardship letter is not the basis for modification approval – that depends on the borrower’s financials and the intricacies of the various government and in-house lender programs.  The purpose of the hardship letter is to explain upfront why borrowers missed payments, and what they propose as a solution.

• Some housing experts recommend that homeowners write short letters, using the philosophy that “less is more.”  The lenders’ loss mitigators, faced with mountains of modification requests, are unlikely to spend time reading more than the first few lines of each letter.  Also, there is the risk that borrowers who go on at length could unknowingly trip themselves up with unnecessary details that raise red flags for a mitigator.

• The hardship letter should open with a succinct explanation of why the borrower stopped paying the mortgage.  The letter should cite a specific hardship, like a lost job, illness, or reduced income.

• Next, the letter should briefly cite any steps the borrower took to avoid defaulting on their loan, like cutting household expenses or tapping in to savings.

• If the borrower’s financial situation has since improved, or is likely to, borrowers should mention that as evidence that their hardship was temporary and won’t hamper their ability to make payments on a modified loan.

• Finally, the letter should state exactly what borrowers are applying for.  Is the proposed solution a lower interest rate, for example, or a principal reduction?

• Borrowers who are underwater – those who owe more on their mortgage than their property is worth – may ask their lender to consider a short sale, in which the house is sold to another buyer for less than the amount owed.

Shadow Inventory and Its Impact on Prices

Many analysts differ on what impact shadow inventory will have on house values in 2013. Some warn that these distressed properties will still play a major role in limiting appreciation. Others believe that the increases in buyer demand will more than offset the increase in supply. The only thing on which everyone agrees is that there will be millions of distressed properties that will need to be liquidated over the next few years. How these properties are handled will have an effect on the impact they will have on values.

According to the National Association of Realtors, foreclosures sell at a 20% discount while a short sale sells at a 16% discount. Therefore, a short sale has less of a negative impact on prices compared to a foreclosure. Obviously, if the mortgage is modified, no sale takes place and there is no impact on surrounding home prices.

The U.S. Treasury Department just issued their latest OCC Mortgage Metrics Report which reports on how these distressed properties are currently being handled. Here is a graph showing how these properties are being processed now as compared to a year ago.

Experts Predict Housing Recovery in 2013

There is independent data that suggests that the housing recovery is in well underway.  Veros Real Estate Solutions  (VRES) is a real estate data firm and it recently announced  its recent analyses of the twelve month period ending December 1, 2012 as well as its forecast for the 12-month period ending December 1, 2013. VRES indicates that “the national real estate market has hit bottom and is now in a full recovery”. Veros Report. The analysis and forecast factor in 975 counties, 335 metro areas, and 13,586 zip codes. The statistics are updated on a quarterly basis. Veros predicts that the nation’s top 100 metro areas can “expect 1.2 percent appreciation over the next 12 months.”

Zillow recently mirrored the same conclusion as VRES.  Perhaps this is a start of a Happy New Year for all of those in the real estate profession. Zillow actually went so far as to predict that home prices would increase by 3.1 percent in 2013 and reported that overall, 2012 prices would end with a 4.6 percent gain. Zillow report The numbers were apparently based upon a survey of 105 “economists and industry experts.” The chief economist of Zillow reported that “an organic recovery in the housing market really took hold in the latter half of 2012” and predicted that the market is “well-positioned for continued growth, albeit slightly slower, in 2013 and beyond.”

There certainly is a lot of optimism in the real estate industry as we enter 2013. Forecasts of recovery together with some favorable legislation and court rulings may signify a positive 2013 and beyond for a lot of us. If lending can loosen up or non-conventional funding can make some gains in 2013, this could be a really good market for the industry.

How Small Cutbacks Lead to Great Savings

Housing Trends eNewsletter

Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general. 




Please click on this link to view the Housing Trends DECEMBER - 2012 Newsletter http://wendyjimenez.housingtrendsenewsletter.com 

The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau, Realtor.org reports and other sources. 

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Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you. Thank you for the opportunity to provide you with this monthly eNewsletter, and I look forward to answering any questions you may have and to the opportunity to be your REALTOR® in the future. 

Sincerely yours, 

Wendy Jimenez
Century 21 Jervis and Associates
800 N. Harbor Blvd La Habra CA 90631 562-243-2966wendy@wendyj4homes.com 
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