Housing Prices Off 4.2% At Shore

This article in today's Asbury Park Press (Housing prices off 4.2% at Shore) sounds like more bad news by the headline, however if you read it closely it is packed with indications of a lot of good news in the near future.

This paragraph really sums up my feelings based on my experience with a seller and a buyer in the last two weeks:

"The positive may well be people are finally reducing the prices in order to sell their homes, and ultimately that's going to set the stage for renewed expansion in housing."

Also, the feelings of Albert Veltri, President of Veltri Real Estate, is right on the money too:

"Overall, things I see are getting much better...Sellers have begun to adjust their prices to current market conditions", he said. "I think they are starting to . . . get real on pricing."

6 Ways First-Time Buyers Can Prepare

A cooling housing market gives buyers, especially first-time buyers, more opportunities to snatch up a good deal. But just because there are good deals, doesn't always mean buyers are ready to make the leap.

These six tips will help prospective buyers find out if they are ready for homeownership.

1. Take a first-time home buyer class. It will make repairing a credit score and shopping for a loan less stressful.

2. Be conservative. Borrowing too much can mean stretching and even sacrificing — to the point that it's hard to even keep a six-pack of beer in the fridge.

3. Organize documents. First-time buyers should keep a pay stub, W-2, and bank and retirement account statements on hand to expedite the loan application process.

4. Get pre-approved. Before starting the homebuying process, consumers should get pre-approved by at least one lender. Being pre-approved won't lock buyers in to a loan but it may save them the heartache of falling in love with a home they really can't afford.

5. Play house. Every month, prospective buyers should bank the amount that they'd have to pay if they owned a home. It's good practice so they'll be ready for the real thing.

6. Consider all the costs. It's not just a mortgage payment they have to worry about. Repairs, assessments, and other costs of homeownership can add up quickly.

Source: Star-Tribune, Kara McGuire (02/02/07)

Is the housing market turning? This sounds like some good news...

This article appeared today in the REALTOR online magazine:

Daily Real Estate News February 7, 2007

Steady Climb Seen for Existing-Home Sales

Consumers are beginning to respond to more favorable housing market conditions, with existing home sales expected to steadily increase into 2008, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.

“After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008,” says David Lereah, NAR’s chief economist.

Existing-home sales, which reached the third-highest total on record of 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million in 2008.

New construction, on the other hand, will take longer to recover. Following a fourth-best 1.06 million in 2006, new-home sales projected to decline to 961,000 this year and then rise to 971,000 in 2008. “We look for that sector to turn around later in the year,” Lereah adds. Among the other key highlights of NAR’s new forecast:

• Housing starts are likely to total 1.52 million in 2007, down from 1.80 million units in 2006, and then increase to 1.56 million next year. “When new home demand begins to catch up with supply, builders will slowly increase construction — probably in the second half of this year,” Lereah says.
• The 30-year fixed-rate mortgage is forecast to rise to 6.7 percent by the second half of the year. Freddie Mac reported the 30-year fixed rate at 6.14 percent in December, but it has been trending up since. “Mortgage interest rates remain favorable, and a gradual rise means potential buyers have some time to weigh purchase decisions,” Lereah says. “When existing-home supplies become more balanced between buyers and sellers this spring, we’ll see some modest price gains.”
• The national median existing-home price should grow 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new-home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, with existing-home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
• The unemployment rate is seen to average 4.7 percent in 2007, compared with 4.6 percent last year. Inflation, as measured by the Consumer Price Index, is projected at 2.0 percent this year, down from 3.2 percent in 2006, while growth in the U.S. gross domestic product is likely to be 2.8 percent in 2007, down from 3.4 percent last year. Inflation-adjusted disposable personal income will probably rise 3.7 percent in 2007, up from a gain of 2.7 percent in 2006.

— REALTOR® Magazine Online