The Best Year Ever, for Buyers

One important thing to note is that it was just a dip between October and November, and the fact that November of 2009 was so much stronger than the previous November shows the market is gaining some momentum on its own.

The Federal government is dispatching what it calls foreclosure SWAT team to look over the books of big banks and see what they are actually doing to prevent foreclosures. According to National Public Radio, these “SWAT teams” will spend three days poring over documents and may hand out fines to companies who aren’t doing what they should. The Obama Administration is cracking down on companies that aren’t doing enough to implement the government’s Making Home Affordable plan. So far, about 750,000 people have had their mortgage payments reduced through the plan. The government says some 3 to 4 million people should be receiving assistance. Click to view the NPR article.

New home construction, which has sagged in recent years, took a turn for the better toward the end of the year. According to CNNMoney.com, home building rebounded from a six month low in November, with improvement across the nation.

Construction of new homes rose 8.9% in November, a time when things traditionally slow down due to winter weather. As good as that was for the industry, the rate was still 12.4% lower than it was in November of 2008.

The National Association of Homebuilders is optimistic that the extension of tax credits to home buyers will create further demand boost going into next year. Click to view article

Just like the nation as a whole, sales in every part of the U.S. was down compared with the tremendously busy month of October but significantly stronger than they had been a year ago, in November of 2008.

In the Northeast, pending sales dropped 25.7% compared with October, but were an impressive 14.7% higher than a year ago. Sales declined in the Midwest by 25.7% between October and November, but were still up by 9.2% over the previous November.

Down South, sales fell 15% in the South in November, but were 14.7% higher than 12 months ago.

Out West, sales slowed by only 2.7, and were tremendously higher than last November — by 21.4%.

The fervent fall sales came about after the federal government offered a tax credit to first time home buyers to close on a property before the end of November. They certainly stepped up to the plate. In spite of the fact that as many as 2 million first time home buyers purchased homes in the last several months of the year, it’s still likely there are many waiting in the wings, which may help keep up the momentum going into 2010.

One concern going into 2010, is whether there is going to be enough housing on the market for all the potential buyers. Of course, there is a lot of variation across the nation. But some areas were reporting, months back, that there was limited inventory at the low end — the most popular for first time buyers. And that may be where the new tax credit — created to help repeat buyers — may be important. It is estimated that as many as 1-and-a-half million repeat buyers may jump into the market early this year and why wouldn‘t they?

In general terms, there are good bargains out there. Looking at the nation as a whole, prices were still on the decline in 2009. Combine that with low mortgage rates and homes were more affordable than they had been in decades.

Let’s hope the possible inventory shortages don’t get in the way of eager buyers getting into the home of their dream… and getting a great deal along the way.

• I will get pre approval
  Now while you may want to get right out there and find your dream home, it’s always wise to get your loan pre approval out of the way first, and here’s why: You need to know how much you can afford! It’s almost impossible to ‘guess’ how much house you can buy… so don’t. Instead, go to a lender, and get that pre-approval. That will give you a bottom line, and that will help your house hunting happen much more efficiently.

• I will have a realistic idea of the kind of property I’m after
  Think about the features that will be most important to you and split those features in two. List the items you can’t live without and then list the features you would, say, enjoy. Now, don’t be too much of a perfectionist. You’ll be refining the lists as your house hunt progresses.

• I resolve not to forgo the home inspection
  In fact, once your offer is accepted, set up a home inspection right away. I know, I know, home inspections can be costly and time consuming, but leaky roofs, cracked walls, insect infestations and foundation problems are even more costly and time consuming to deal with after the fact. You’ll want to hire a reputable inspector, so you could ask for advice from your REALTOR®, or contact a professional organization like the American Society of Home Inspectors and get a referral from them. If the inspector finds any problems, the seller will either fix them, or offer you money so you can have them fixed yourself. That all depends on how the contract was written. Some sellers prefer to have the work done themselves to save money, but some buyers prefer to get the cash, so they can make sure the repairs are done to their satisfaction. Again, look at your contract to see how that’s all going to play out.

• I definitely resolve to do my mortgage shopping
  If you think about it, the difference of even half a percentage point on your mortgage will mean a considerable savings over the life of your loan. Here’s an example: Let’s say you get a $100,000 mortgage at 8%. Well, the difference between that and a mortgage at 7.5% is about $35 a month. Not too much, but over a 30 year loan period that’s $12,600! So resolve to get your head down and do some homework. Hey, we comparison shop for good prices when we go food shopping, so shopping for a mortgage shouldn’t be any different.

• I firmly resolve to use a REALTOR®
  Purchasing a home can be the most important and complex financial transaction you’ll ever be involved in and going it alone or with someone you have reservations about just isn’t worth the risk. A good REALTOR® can save you hassle; they can save you time and quite possibly save you money, so get recommendations — ask any friends or family who’ve had a REALTOR® they’ve been happy with and choose someone who understands what you’re looking for, and someone that you have a good connection with.

For buyers, that’s a few real estate resolutions that are really worth sticking to this year.

Looking towards the rest of the coming year… We had over 2 million new homebuyers in 2009, that number will be the likely number of those who are going to claim the tax credit. 2010 should give us about 2.4 million, the .4 increase based on the $6500 increase to existing homeowners. So in over about two years we should see about 4.4/4.5 million sales just based upon the tax credit alone and that’s a great opportunity.

And, looking further out, Veissi feels we are on the cusp of seeing a turn on what we had; the “bubble” real estate market; 2010 will tell us a great deal about it, but we already seen the inventory decreasing to about 6.5% of supply and that’s close to normal. Home prices are down compared to a year ago but we’ve seen the last couple of month consecutive month-to-month increases. That gives us a good indication that the worst may clearly be over; foreclosures will continue to be high in 2010 but the interesting part of that is once the foreclosures hit the market, the foreclosed properties are being gobbled up both by the investors and homeowners and homebuyers. The prices are wonderful, most economists expect the job market to be pretty consistent the second half of 2010.

Over a 10 year period of time from 2010 to 2020, Veissi anticipates continuous growth and job growth, and the economy continuing to benefit from these indicators. We’re going to see real estate continue to track the way it has except for that 4 year period of time we bubbled up and continue to track for at least equal if not exceeding inflation in areas of growth. Coming from what we’ve had for the last 4 years Veissi is more than enthusiastic; he is confident that this is a wonderful time to purchase that property, make that investment, become a homeowner, and be part of the American dream. And, there is no better group that can tell you how to do that more effectively, and in the best way possible than the group of REALTORS® that exists in your community!