Guy Adams

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the NATIONAL ASSOCIATION OF REALTORS ®. May's increase was the first back-to-back monthly gain since September 2005.

Existing-home sales - including single-family, townhomes, condominiums and co-ops - rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April. Sales remained 3.6 percent below the 4.95 million-unit pace in May 2008.

Lawrence Yun, NAR chief economist, expected an improvement in sales.

"Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates," Yun says. "First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory.

Poor Appraisals Stall Transactions

However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan."

Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April.

Yun says the appraisal problem is serious.

"Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales," he says. "In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected."

NAR President Charles McMillan says appraisals and the tax credit are key issues.

"To maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist," he said. "In addition, the first-time buyer tax credit should be expanded to all buyers of primary homes regardless of income. Extending the credit into 2010 would allow more time for the market to catch up with underlying demand, in part because many families with children, who normally time their purchase based on school year considerations, do not have enough time to move before the start of school in late August.
"Freeing a pent-up demand in housing will absorb inventory at a faster pace, strengthen communities and stabilize home prices earlier," McMillan said.

A Closer Look at May Housing Data

An NAR practitioner survey in May showed first-time buyers accounted for 29 percent of transactions, and that the number of buyers looking at homes is nearly 10 percentage points higher than a year ago.

"This is the time of year when we see large increases in the number of repeat buyers, who are benefiting from sales to entry-level buyers," Yun says. "Investors appear less active, but are more prevalent in areas with large price corrections."

National median existing-home price: for all housing types was $173,000 in May, down 16.8 percent from a year earlier. Distressed properties, which declined to 33 percent of all sales in May from 45 percent in April, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

"The decline in the distressed sales share likely results from an increase of repeat buyers in May," Yun says. "First-time buyers are concentrated in the lower price ranges, which include most of the distressed sales."

Single-family home sales: rose 1.9 percent to a seasonally adjusted annual rate of 4.25 million in May from a pace of 4.17 million in April, but are 3 percent below the 4.38 million-unit level in May 2008. The median existing single-family home price was $172,900 in May, down 16.1 percent from a year ago.

Existing condominium and co-op sales: increased 6.1 percent to a seasonally adjusted annual rate of 520,000 units in May from 490,000 in April, but are 8.9 percent below the 571,000-unit level in May 2008. The median existing condo price was $173,800 in May, down 21.9 percent from a year earlier.

By the Region

Here's how housing fared across the country for existing-home sales:

• Northeast: rose 3.9 percent to an annual level of 800,000 in May, but are 10.1 percent below a year ago. Median price: $243,600, which is 12.5 percent below May 2008.

• Midwest: jumped 9 percent in May to a pace of 1.09 million but are 4.4 percent below May 2008. Median price: $145,800, which is 10.4 percent lower than a year ago.

• South: unchanged at an annual pace of 1.74 million in May but are 8.9 percent below a year ago. Median price: $157,400, down 9.9 percent from May 2008.

• West: slipped 0.9 percent to an annual rate of 1.14 million in May, but are 11.8 percent higher than May 2008. Median price: $197,700, down 30.6 percent from a year ago.

Source: NAR

The thought of building a home that you can customize to highlight your personality is exciting, but it can also be intimidating to start from the ground up.

Visualizing Your New Home

Keep your thoughts organized by writing them down and keeping them in a "new home" binder. First, write down the features that you need in your house (example: 4 bedrooms, 3 bathrooms), then the things you want (example: granite countertops, wood floors, etc.).

When it comes to a floor plan, make sure it fits your specifications. Check local building codes, which may require you to include certain features. Some developments allow you to pick from a few plans which your builder can provide, while others allow for more customization. For a custom floor plan, look through magazines, books, and online to find a plan that you like. If you want something significantly modified, you will need to hire an architect. Find examples in magazines of features and designs that you like, as well as paint, flooring, and other samples. Having all of these things in your new home binder will help you organize your ideas and make the building process much smoother.

Choosing a Builder

Choosing the right builder is vital to a good construction experience. Start by getting recommendations from friends, real estate agents, and contact the local builder's association for a list of builders in the area. Research different builders to find out which types of homes they specialize in, and their corresponding price ranges. Set up appointments with a few builders. Check with past clients. Ask if they were satisfied, and whether they would build with that company again. Drive by homes the builder has completed, as well as some current construction sites. Look for quality-not just whether or not you like the design. Finally, make sure you feel comfortable with your builder, and that you can communicate effectively. They need to understand your vision, and you must understand how and when things will be completed. It is imperative to establish a working relationship that is both beneficial to you and the builder. Most importantly, consult a real estate agent for advice, and to handle all negotiations.

For more information on new construction, contact your local real estate agent or check out RealLiving.com's New Construction portal.

Real Living is proud to announce the Peace of Mind Plan, a mortgage payment protection plan for home buyers in the Central Ohio, Dayton, Cincinnati and Louisville Metro areas beginning June 1, 2009. We believe "home is where the heart is," and financial stability provides peace of mind. So if your heart is set on a new home, but you're stressed about buying with the economic realities we now face, Real Living has your answer.

The Peace of Mind Plan is designed to provide the comfort you deserve and the confidence you need to make your move a reality. Here's how it works:

One-Year Coverage*
When you are represented by a Real Living agent during the purchase of your next home, and finance through Real Living Mortgage, Real Living will provide you with one year of insurance benefits that cover a monthly mortgage payment of up to $1,500 for up to six months if you become involuntarily unemployed during the first year you are in your new home.

Many buyers who purchased a home in recent years have interest rates that exceed current rates that are available. So, additionally, if you refinance through Real Living Mortgage, we'll also provide coverage for one year. Please refer to the terms and conditions section for more detailed stipulations.

Two-Year Coverage*
If you purchase a Real Living listing, and finance through Real Living Mortgage, we'll extend your Peace of Mind benefits for another year (two years altogether) so you can take advantage of the up to $1,500 each month for up to six months of coverage. This means that you have coverage for up to six months of mortgage payments if you become involuntarily unemployed at any point during the two-year period.

*Please visit www.RealLivingHER.com or www.RealLivingRealtyServices.com for terms and conditions.

With the Real Living Peace of Mind Plan, state and national government incentives, a variety of home choices and aggressive prices available on the market, it is the best time to buy!

This plan is available from June 1 to Aug. 31, 2009 (closing prior to Sept. 30, 2009), so connect with a Real Living agent today for the details and to find your next home fast.

See what others are saying....
Business First
WDTN in Dayton
Columbus Dispatch

While many home builders are struggling amid the ongoing recession and credit squeeze, the green home market is in the midst of a growth period.

Some green pros are thriving because of increasing demand for eco-friendly housing, the availability of new funds for green public projects, and passage of the $787 billion federal economic stimulus bill. Still, even with the promise of reduced utility bills, many cash-strapped home owners are reluctant to open their wallets for energy-efficient remodeling projects.

Smaller custom builders such as Maryland-based Bethesda Bungalows are among those faring the best. The company is known for building small- to medium-sized green homes on infill lots in the suburbs of Washington, D.C.

On the federal front, the economic stimulus bill is expected to create jobs for window installers, insulation contractors, and other professionals whose work involves making existing residences more energy efficient.

According to Capitol Hill estimates, a couple of provisions that offer tax credits to home owners for energy-efficient upgrades and pay to weatherize the houses of low-income households could spur approximately $6 billion of activity in the remodeling industry.

Source: Builder, Jennifer Goodman (06/09)

On 06/19/09 1:52 PM, Melanie wrote:
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I notice that your profile says you have experience in foreclosures. I have a friend who is interested in purchasing a foreclosure property. How does one go about finding and purchasing these properties?

Feel free to message me on LinkedIn or send an email to me directly at ****** I also can be reached by phone at ********

Thank you!

Melanie,
While there are certainly no lack of websites offering foreclosure lists, it's important to realize that these all require a fee & quite often they are made up of mostly very outdated information. There are, however, other options to learn about potential properties in a timely manner.

Any GOOD Realtor will search the areas & price point that your friend is interested in & in the body of the listings They'll recognize key indicators that identify which ones are foreclosures & which are short sales, etc. Key phrases like "Bank Owned" (obviously) "subject to lender approval" (not as obvious), "as is" (certainly not obvious) and a few others. Quite often these descriptors will not show up in the public access sites - but a Realtor can help.

Also, remember all foreclosures do not always equate to a "good deal." Quite often lenders have an unrealistic view of what the house is worth. In our region it's actually more common to see a listing overpriced than it is to see one discounted.

If a really good deal is the the end game, it's critical that your friend is assisted by a good Realtor who can examine the whole inventory within their price point for the best deal regardless of ownership status.
And most importantly, this repesentation doesn't cost the buyer a thing...

If I can be of further assistance please don't hesitate to contact me
Thank You
Guy Adams