Realty Reality: May 2008

Friday, May 30, 2008

New Commercial and MultiFamily Inspection Form Released By MBA

The Mortgage Bankers Association (MBA) recently announced the completion and implementation of a new commercial/multifamily real estate property inspection form for various property types including Office, Retail, Multifamily, Healthcare, Lodging and Industrial.

The updated inspection form already has industry-wide adoption by servicers for all funding sources including Fannie Mae and Freddie Mac. The form will not be used by the Federal Housing Administration (FHA).

Click here to view the new commercial/multifamily property inspection form and reference guide, please click “MBA Master Inspection Form” upon visiting the following Web link.

Full Story...

Source: MBA

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Thursday, May 29, 2008

IRS Accepting Applications for Low Income Taxpayer Clinic Grants

WASHINGTON — National Taxpayer Advocate Nina E. Olson announced today that the 2009 Low Income Taxpayer Clinic (LITC) grant application process is now open.

The LITC grant program is a federal program administered by the Taxpayer Advocate Service. The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels or who believe that an IRS system or procedure is not working as it should.

Under the LITC grant program, the IRS awards matching grants of up to $100,000 per year to develop, expand or maintain low income taxpayer clinics. The program is in its tenth year and continues to expand. To date in 2008, the LITC Program Office has awarded LITC grants to 154 organizations in 50 states, the District of Columbia, Puerto Rico and Guam.

LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. The clinics also provide taxpayer education and outreach for taxpayers who speak English as a second language. Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics. It is available at www.irs.gov or local IRS offices.

Examples of qualifying organizations include:

- Clinical programs at accredited law, business or accounting schools, whose students represent low income taxpayers in tax disputes with the IRS, and

- Organizations exempt from tax under Code Section 501(a) that represent low income taxpayers in tax disputes with the IRS or refer those taxpayers to qualified representatives.

The application period for this grant will run from May 27, 2008, through July 7, 2008. The grant will cover the 2009 grant cycle, from Jan. 1, 2009, through Dec. 31, 2009. Applications must be postmarked or filed electronically by July 7, 2008.

Copies of the 2009 Grant Application Package and Guidelines, IRS Publication 3319 (Rev. 5-2008), are available at www.irs.gov/advocate. Applicants may also order application packages from the IRS Distribution Center by calling 1-800-829-3676.Applicants can also file electronically at www.grants.gov. Those applying electronically should use the Funding Number TREAS-GRANTS-052009-001.

Questions about the LITC Program or grant application process can be addressed to the LITC Program Office at (202) 622-4711, not a toll-free call, or by e-mail at LITCProgramOffice@irs.gov.

Source: IR-2008-74

Tuesday, May 27, 2008

NAR and DOJ Agree On MLS Policy

The National Association of Realtors®(NAR) has reached a favorable settlement with the U.S. Department of Justice (DOJ), resolving litigation between them regarding how listings from multiple listing services are displayed on brokers’ virtual office Web sites. The proposed final order, to be filed with the federal district court in Chicago today, validates NAR’s longstanding Internet Data Exchange (IDX) policy and strengthens the rule governing participation in multiple listing services.

“This is clearly a win-win for the real estate industry and the consumers we serve,” said NAR President Richard F. Gaylord. “Today I can say with the clear knowledge, reinforced and underscored by DOJ’s settlement compromise, that the real estate industry is dynamic, entrepreneurial and fiercely competitive. Thanks to Realtors®, consumers can access detailed information about millions of properties for sale across the country.”

The final order expressly provides that NAR does not admit any liability or wrongdoing and NAR will make no payments in connection with the settlement.

The terms of the agreement preserve and strengthen the MLS as a means for broker-to-broker cooperation intended to serve real estate professionals who are actively engaged in listing or selling property in that MLS, said Laurie Janik, NAR chief counsel. “This will ensure that MLSs are used for what they were originally intended to do — to help real estate professionals find buyers for people who want to sell their homes.”

NAR will be reinstating an updated version of its Virtual Office Web site policy. That policy was rescinded in 2005 when DOJ challenged certain provisions. The revised policy continues to protect the rights of sellers who do not want their property or their property’s address displayed on the Internet. The new policy also protects sellers from having false or other unwanted information about their listings appear on the VOW of an MLS member.

“NAR’s efforts in today’s challenging real estate market are focused on what matters most to consumers — re-energizing the housing market,” said Gaylord. “Competition is alive and well in the real estate industry. In fact, the competitive nature of our industry is even more apparent in times of market turmoil like those we are currently experiencing.”

Working with regulators and lawmakers at all levels of government, NAR is pushing for actions that will get the nation through the housing and mortgage crisis and positively affect families and the U.S. economy. In the current housing market, the value of Realtors® and the services and resources they provide, including the MLS, has never been greater.

“The DOJ implicitly acknowledges the value brought to the real estate market by the more than 800 MLSs across the country to make buying and selling a home easier. The MLSs are healthy, solid and sound, and will continue to deliver benefits to members and consumers. Consumers have long been able to access and view consolidated property information online, and thanks to Realtors®, consumers in increasing numbers can successfully use the Internet in their home search process,” Gaylord said.

“Encouraging innovation and competition in real estate has been NAR’s hallmark for 100 years,” said Gaylord. “NAR members represent almost every conceivable business model, including full-service, limited-service, discount models, and others.”

“As we move into our second century, Realtors® will continue to protect consumers in the real estate transaction, ensure the public’s continued access to real estate listings, and work tirelessly on issues related to private property rights, homeownership, and housing issues of importance to all Americans,” said Gaylord. “Now that this has been resolved, we can fully focus on finding ways to re-energize, stabilize and strengthen the housing market and look out for the best interests of homeowners and those who aspire to that American Dream.”

To learn more about the settlement and related issues, visit www.realtor.org/DOJ.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members in more than 250,000 active office locations and branches across the country who are involved in all aspects of the residential and commercial real estate industries.

See also DOJ Press Release

Monday, May 26, 2008

Housing Crisis Over, According to Wall Street Journal

Recently, the Wall Street Journal published an online article entitled, "The Crisis Is Over".

In the article, it pointed out the fact that while there is a lot of current press and anxiety about the housing crisis intensifying, most forget or are not aware that it is in fact part of a long cycle that began back in 2005 and is just now bottoming out in 2008.

We will start to see the upside of the curve, as most of the factors that were having adverse effects are in the process of correcting themselves.

The bottom line is affordability, based on a combination of price and cost of ownership (mortgages, etc.).

We will not see sudden changes as it has taken time for the trend to reach it's current point of adjustment and it will take time for it to complete it's recovery, but it is underway.

Full Story...

Celebrate: Memorial Day

Celebrated in most states on the last Monday in May, which this year is May 26th; Memorial Day is a great time for all of us to remember all the men and woman who gave their lives in service to our country.
It a great opportunity to join in the celebrations and to help teach our children to respect and appreciate that the priviledges we enjoy today are directly due to the sacrifices of those men and women who were killed in action while a member of the armed forces.

See post for prior year for links to televised programs and links to additional Memorial Day history and information resources.

This year marks the dedication of The National World War II Memorial on May 29 in Washington, D.C. Located between the Lincoln Memorial and the Washington Monument, it will be the first national memorial dedicated to the men and women who served in the U.S. armed forces during World War II, including those who died in combat and the Americans who supported the war effort on the home front.

Click here for a special edition of Facts for Features pays tribute to those who served our country in that war.

Friday, May 23, 2008

Spring 2008 Statistics of Income Bulletin Issued By IRS

WASHINGTON –– The Internal Revenue Service today released the spring 2008 issue of the Statistics of Income Bulletin, featuring preliminary data from the 138.4 million individual tax returns filed for tax year 2006. This issue also features data on high-income returns filed for tax year 2005.

This edition of the quarterly Bulletin provides the latest view of the federal individual income tax base. For example, adjusted gross income in tax year 2006 rose 8.4 percent from the prior year to about $8 trillion, and taxable income rose 9 percent to roughly $5.6 trillion, according to the data, which may be subject to some future revisions.

This Bulletin also features articles on the following:

- Trends in non-cash charitable contributions, including a big drop in car donations in 2005 that was likely related to tax law changes.

- Statistics on cash flows and holdings of Individual Retirement Arrangements (IRAs). For example, at the end of 2004, almost 51 million taxpayers held roughly $3.3 trillion in IRAs.

- Repatriation of funds by U.S. corporations due to the one-time received dividend deduction enacted in the American Jobs Creation Act of 2004.

- Statistics on federal estate tax returns with gross estates greater than $1.5 million.

- Growth in the number and assets of taxable Real Estate Investment Trust subsidiaries.

To access a broad range of tax statistics click on the Tax Statistics page. To view past SOI Bulletins click on the appropriate page.

The Statistics of Income Bulletin is available from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. The annual subscription rate is $53 ($74.20 foreign), single issues cost $39 ($48.75 foreign).

For more information about this, write the Director, Statistics of Income (SOI) Division, RAS:S, Internal Revenue Service, P.O. Box 2608, Washington, DC 20013-2608; call Statistical Information Services at (202) 874-0410; or send a fax to (202) 874-0964.

Source: IR-2008-72

Helpful Green Links & Resources for Homeowners

The NAHB has some helpful links to resources for people that want to purchase green homes and for current homeowners that want to make or keep their homes green...

Helpful Green Links

Existing-Home Sales Ease Although Some Markets Rising

Existing-home sales slowed in April, partly because restrictive lending practices hampered home buyers. At the same time, a greater number of areas are showing sales gains from a year ago and a recent reversal in mortgage policy means the market is better positioned for a turnaround, according to the National Association of Realtors®(NAR).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 1.0 percent to a seasonally adjusted annual rate 1 of 4.89 million units in April from an upwardly revised pace of 4.94 million in March, and are 17.5 percent below the 5.93 million-unit level in April 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the good news is that mortgage restrictions have just been eased. “In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their ‘declining market’ policies, effective June 1,” he said. “This means consumers across the country will have access to safe, affordable financing with downpayments of only 5 percent on most mortgages, with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer.”

Lawrence Yun, NAR chief economist, said eliminating restrictive policies should be a big help to home buyers. “I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,” he said. “Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York.”

The unusual mix of market conditions around the country continues, but areas showing healthy price gains include Greenville, S.C., and Springfield, Mo., both with solid local economies. “On the other hand, some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results,” Yun said.

The national median existing-home price2 for all housing types was $202,300 in April, which is 8.0 percent below a year ago when the median was $219,900. Because the slowdown in sales from a year ago is greatest in high-cost areas, there is a downward distortion to the national median with relatively more sales in low- and moderate-priced markets.

Total housing inventory at the end of April rose 10.5 percent to 4.55 million existing homes available for sale, which represents an 11.2-month supply3 at the current sales pace, up from a 10.0-month supply in March.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage slipped to 5.92 percent in April from 5.97 percent in March; the rate was 6.18 percent in April 2007.

Single-family home sales slipped 0.5 percent to a seasonally adjusted annual rate of 4.34 million in April from 4.36 million in March, and are 16.1 percent below the 5.17 million-unit level recorded one year ago. The median existing single-family home price was $200,700 in April, down 8.5 percent from April 2007.

Existing condominium and co-op sales fell 5.2 percent to a seasonally adjusted annual rate of 550,000 units in April from 580,000 in March, and are 27.9 percent below the 763,000-unit pace in April 2007. The median existing condo price4 was $214,900 in April, which is 3.7 percent below a year ago.

Regionally, existing-home sales in the West rose 6.4 percent in April to a level of 1.00 million but are 15.3 percent below a year ago. The median price in the West was $285,700, which is 16.7 percent lower than April 2007.

In the South, existing-home sales were unchanged from March at an annual rate of 1.92 million in April, but are 18.6 percent below April 2007. The median price in the South was $170,800, down 5.1 percent from a year ago.

Existing-home sales in the Northeast fell 4.4 percent to an annual pace of 870,000 in April, and are 14.7 percent below a year ago. The median price in the Northeast was $262,000, which is 7.7 percent below April 2007.

In the Midwest, existing-home sales were at an annual rate of 1.10 million in April, which is 6.0 below March and 19.7 percent lower than April 2007. The median price in the Midwest was $159,100, down 2.9 percent from April 2007.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).

4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. View data tables.

Existing-home sales for May will be released June 26, and the next Forecast/Pending Home Sales Index is scheduled for June 9.

Life Expectancy of Home Components and Systems

When considering buying, upgrading, remodelling a house or just preparing for the future and potential maintenance costs, it's helpful to have an idea of the the general life expectancy of your house components and systems.

A house is expected to last many years and through several series of owners. But what about the individual components that comprise the house? How many years of service can a home owner reasonably expect from a roof or a door, a floor, the systems (HVAC, toilets and tubs, well, septic systems, etc.) or a window?" What components last the longest? What components have to be replaced frequently?

Fortunately there are several sites that have have analyzed the statistics, compiled the information for you and have presented it in easily accessible online and/or downloadable (pdf) formats.

Here are several sources providing statistics on home component life expectancy:

NAHB / Bank of America's "Study of Life Expectancy of Home Components"
[alternate link]
(click here for summary press release on the National Association of Home Builders/Bank of America Home Equity Study of the Life Expectancies of Home Components)

NAHB: Consumers: Remodeling Your Home [Rebates & Loans for Green Homeowners]

The Old House Web: Life expectancy How long should the components and systems in your home last? (this is based on the HUD Residential Rehabilitation Inspection Guide, February 2000, 162 p.)

Septic System Life Expectancy

House Component Life Expectancy and Average Costs

Example Life Expectancies:

- Bathroom, laundry and garage cabinets and closet shelving can last 100 years or more,
- Kitchen cabinets may only last 50 years
- Natural wood flooring can last 100 years or more
- HVAC systems last from 8 to 20 years, depending on sub-unit and usage
- Plumbing related fixtures (faucets, etc.) last 10 to 20 years, depending on use
- Exterior and Interior paints last on average about 5-10 years, 1-5 if used for waterproofing
- Cement footings and foundations last approximately 50 years; concret block lasts 100 years, poured footings and foundations last 200 years
- Flooring is usually lifetime, except for 11 years for carpeting and 20 to 30 years for vinyl sheet or tile
- Dryers and Refrigerators last about 13 years, while microwaves last 9 years and compactors only 6 years
- Natural stone countertops last a lifetime, while cultured marble countertops last about 20 years
- Wooden decks usually last 20 years under ideal conditions
- Copper wiring lasts a lifetime, however the controls and accessories associated with it normally last about 10 years

It's important to remember that in the long run, it much cheaper to do perform regular maintenance on a house than to wait until a major component fails. It has been suggested by some that a good rule of thumb for budgeting for annual maintenance is one percent of the value of your home.

Wednesday, May 21, 2008

Leading Commercial Real Estate Index Contracts in First Quarter

Although fundamentals are sound, activity in commercial real estate markets is expected to ease in the months ahead, according to a forward-looking index for the commercial real estate sectors published by the National Association of Realtors®(NAR).

The Commercial Leading Indicator for Brokerage Activity1 edged down 0.7 percent to an index of 119.0 in the first quarter from a downwardly revised reading of 119.9 in the fourth quarter, and is 0.8 percent below the first quarter of 2007 when it stood at 120.0.

This is the third consecutive quarterly dip since reaching a record of 120.5 in the second quarter of 2007. Before that, the index showed generally positive expansion from the middle of 2003; NAR’s track of the index dates back to 1990.

Lawrence Yun, NAR chief economist, expects somewhat diminished business opportunities for commercial real estate practitioners in the months ahead. “The moderate erosion in the index suggests that commercial activity, as measured by net absorption and the completion of new commercial buildings, will be positive but somewhat weaker over the next six to nine months. Private nonresidential investment in structures is likely to subtract one-third to one-half percentage point off GDP growth,” he said. “Along with the impact of the credit crunch, a weakening in leasing and building sales activity should come as no surprise because commercial real estate follows changes in overall economic activity.”

The quarterly decline results from falling employment in the sectors requiring office space, rising first-time unemployment claims, a lower rate of return as measured by NCREIF (National Council of Real Estate Investment Fiduciaries), and a falling NAREIT (National Association of Real Estate Investment Trust) price index. In addition, there was a modest decline in industrial production.

Realtors® members who specialize in office and industrial properties indicate in a separate attitudinal survey2 that they anticipate a much lower level of business activity in the upcoming quarters.

“The job market is weak, but not recessionary,” Yun said. “There are large regional variations, with job growth in the South, while overall professional business service jobs are in the process of a long-term expansion.

“The U.S. is the world leader in the knowledge-based industry, and trade exports are solid – combined, these are solid underlying fundamentals for positive rent growth and net absorption in the commercial real estate market.”

The commercial leading indicator is a tool to assess market behavior in the major commercial real estate sectors. The index incorporates 13 variables that reflect future commercial real estate activity, weighted appropriately to produce a single indicator of future market performance, and is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate.

The 13 series in the index are industrial production, the NAREIT price index, NCREIF total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service.

More than 80,000 NAR members offer commercial services, and 60,000 of those are currently members of the REALTORS® Commercial Alliance, NAR’s commercial division.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1The index was revised minimally back through 2005 due to a comprehensive revision in industrial production data by the U.S. Census Bureau.

NAR reviewed a wide variety of indicators, examined the relationships of indicators that demonstrated a historical impact on commercial real estate, and modeled a forward-looking index based on historic trends. Although individual indicators sometimes move in opposite directions, together they offer a better indication of future market activity.

Quarterly data for 13 selected series were reviewed back through the first quarter of 1990. The modeling demonstrated a change in commercial brokerage activity that could be seen two quarters later as measured by net absorption in the industrial and office sectors, and the completion of new commercial buildings as measured by the value of building construction put-in-place of office, warehouse, retail and lodging structures. An index of 100 is defined as the level of commercial real estate market activity during the first quarter of 1990, the first period to be analyzed.

2The SIOR Commercial Real Estate Index is a diffusion index based on a survey of approximately 600 members of the Society of Industrial and Office Realtors® conducted by NAR Research. For more information, contact Richard Hollander, SIOR, at 202/449-8200. Click here for Commercial Leading Indicator Index.

The next commercial real estate market report and forecast is scheduled for release on June 18, and the next commercial leading indicator index will be released August 20.

Tuesday, May 20, 2008

U.S. Energy-Related Carbon Dioxide Emissions Rose by 1.6 Percent in 2007

U.S. carbon dioxide emissions from burning fossil fuels increased by 1.6 percent in 2007, according to preliminary estimates released today by the Energy Information Administration (EIA).

The economy, as measured by Gross Domestic Product (GDP), grew by 2.2 percent and energy demand rose by 1.7 percent indicating that energy intensity (energy use per unit of GDP) fell by 0.5 percent. Carbon dioxide intensity (carbon dioxide emissions per unit of GDP) also fell by about 0.5 percent.

Factors that drove the emissions increase included weather conditions that increased the demand for heating and cooling services and a higher carbon intensity of electricity supply.

Total U.S. energy-related carbon dioxide emissions have grown by 19.4 percent since 1990. Energy-related carbon dioxide emissions account for over 80 percent of U.S. greenhouse gas emissions.

Full details...

Monday, May 19, 2008

AD Campaign to Fight Lending Descrimination Launched by HUD

HUD LAUNCHES AD CAMPAIGN TO FIGHT LENDING DISCRIMINATION
WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) announced today that it has launched a national public service announcement (PSA) campaign that will educate the public, especially minorities, about their rights under the lending provisions of the federal Fair Housing Act.

The centerpiece of the bilingual campaign is a television PSA featuring Dennis Haysbert, who is best known for his role as President Palmer in the Emmy award-winning television series "24."

The PSA shows Haysbert, sitting in a café, drawing his dream home on a napkin and explaining that it is illegal to discriminate in lending because of someone'srace, color, national origin, religion, sex, familial status, or disability.The PSA ends with the tagline "HUD - One Call. Many Answers," and encourages people to call HUD's fair housing hotline, 1 (800) 669-9777, or log onto HUD's Web site, www.hud.gov/fairhousing, if they believe they have experienced lending discrimination.

The campaign, which is being administered by West Coast-based Pacific News Service, also includes radio PSAs and newspaper ads that illustrate the kinds of challenges many minority homebuyers face when they attempt to purchase a home. The campaign is in both English and Spanish. In addition, the campaign will include a series of fair lending forums designed to inform faith-based organizations, housing professionals, and the general public about HUD resources and programs that can assist in eradicating unfair and discriminatory lending practices.

"HUD studies confirm that African Americans and Hispanics trying to become homeowners are often given less information about loan terms, are quoted higher rates and fees, and are sometimes discouraged from applying for loans," said Kim Kendrick, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "Hopefully, this compelling campaign will empower existing and prospective minority homeowners to report these incidents so that they can receive help."

The Fair Housing Act makes it unlawful to discriminate in the sale, rental, and financing of a home on the basis of race, color, religion, sex, national origin, disability, and familial status.

FHEO and its partners in the Fair Housing Assistance Program investigate approximately 10,000 housing discrimination complaints annually. People who believe they are the victims of housing discrimination should contact HUD at 1 (800) 669-9777 (voice), 800-927-9275 (TTY). Additional information is available at www.hud.gov/fairhousing.

Friday, May 16, 2008

Fannies Mae's Withdrawal of Declining Market Policy Will Help Housing Market

Fannie Mae today withdrew its declining market policy and adopted uniform national downpayment requirements, making financing more affordable and available and stabilizing the credit markets, said the National Association of REALTORS®(NAR).

NAR and other real estate and banking organizations have been calling on both Fannie Mae and Freddie Mac to change their declining market policies, which disproportionately affects minorities and lower income families and communities as well as first-time home buyers, further contributing to the sluggish housing market.

“These new policies will help stabilize the credit markets, which will help encourage buyers to come back into the housing market,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “The former policy was not good for many potential homeowners, and bad for the housing market because it stigmatized communities with lower sales and prices. We are pleased Fannie Mae took action to remove the extra 5 percent down payment on homes in declining markets.”

Gwen MuseEvans, Fannie Mae vice president for credit policy and controls, told hundreds of REALTORS® earlier in the week that Fannie Mae would be replacing the existing policy that required higher minimum downpayments for properties in markets that are considered declining, for a policy that allows buyers to borrow up to 97 percent loan-to-value, even in markets in which prices have declined. “We heard the concerns of NAR and we reviewed and determined that changes in our policy were needed,” said MuseEvans.

“The Fannie Mae decision is huge and will have a positive impact, perhaps significantly, on the housing market. We are very appreciative to Fannie Mae for listening to us and agreeing that these changes were needed to help more families achieve the dream of homeownership,” said Lawrence Yun, NAR chief economist.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Fannie Mae's News Realease Regarding Decision

Thursday, May 15, 2008

NAR Forecast: Home Sales, Prices to Pick Up in Second Half of 2008

Home sales and prices throughout most of the country are poised for improvement in the second half of 2008, and the recovery will vary by market, Lawrence Yun, chief economist for the National Association of REALTORS®(NAR) said today during NAR’s Midyear Legislative Meetings & Trade Expo. More than 9,000 REALTORS® and guests are attending the conference that runs here through Saturday.

Middle-America cities that performed evenly over the past few years – like Cincinnati, Milwaukee and the Kansas City, Mo., area – are likely to experience home price gains in the 20 to 30 percent range over the next five years, while markets like Miami, Las Vegas and Phoenix could see prices go up as much as 50 percent during that time period, Yun said.

Yun blamed most of the softening of the housing market over the last year on the “subprime mess,” where consumers with blemished credit records got loans they couldn’t afford when the interest rates reset to higher levels.

“In fact, if you look at where home prices fell the most, it’s the markets were subprime loans were prevalent,” Yun said. Cape Coral, Fla.; Detroit; Las Vegas; Miami; Orlando, Fla.; Phoenix and Riverside, Calif. were among the cities with a high percentage of subprime lending and where the markets suffered the biggest downturns, he explained.

“It’s important to keep things in context,” he said. “While much of the media is focusing on the fact that the rate of foreclosures doubled this year from historic averages, the foreclosure rate has gone from 1 percent of all homeowners with mortgages to 2 percent. Foreclosures are being driven principally by subprime loans.”

He further explained that more than half of today’s foreclosures are concentrated in the subprime market. The great majority of homeowners are making their mortgage payments on time.

Now that the subprime market has dried up, and loans insured by the Federal Housing Administration and those purchased by Fannie Mae and Freddie Mac are making a comeback, the housing markets will strengthen and prices are likely to begin a steady uptick in the coming months, Yun said.

Yun urged the Congress and White House to enact NAR-supported legislation to modernize FHA programs, reform regulation of the government-sponsored enterprises (Fannie Mae and Freddie Mac), establish a first-time home buyer tax credit, and make the temporary increases to the conforming loan limits established by the Economic Stimulus Act of 2008 permanent.

“These measures would quickly stabilize the housing markets and get fence-sitters into the market to buy homes,” Yun said.

“There are many reasons for people to get into the housing market today, and very few reasons not to. With the plentiful supply of homes for sale at affordable prices, interest rates approaching 40-year lows, and the strong track record of housing as a good long-term investment, conditions are ripe for buyers,” he added. “Those are the facts, plain and simple.”

As for a recession, it’s not happening, Yun said. “A slowdown, yes, but the definition of a recession is two consecutive quarters of negative GDP growth. It’s not in the cards – no matter how you look at it.”

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Conditions Mixed in Commercial Real Estate but Fundamentals Good

Commercial real estate conditions are uneven across the country and vary notably in some areas, according to a commercial real estate update and forecast presented here at the National Association of REALTORS®(NAR) Midyear Legislative Meetings & Trade Expo.

NAR Chief Economist Lawrence Yun said that just like residential real estate, performance in the commercial sectors is greatly mixed across the country. “It’s just as important to understand local market variations in commercial real estate as it is in the residential sector because local conditions can vary considerably,” he said. “Commercial fundamentals are good, but investment has been hurt by the credit crunch – investment in the commercial sectors decelerated in the first quarter after setting a record in 2007.”

During the first three quarters of 2007, commercial real estate investment was in excess of $100 billion per quarter. In the first quarter of 2008 it slowed to the range of $35 billion to 38 billion.

In analyzing NAR’s Commercial Leading Indicator for Brokerage Activity, which will be updated May 21, Yun said to expect broadly slower net absorption for office and industrial space. “I see a topping off in commercial building construction, and a decline in private non-residential construction spending,” he said. “We project generally softer rent growth in commercial real estate, and modestly lower business opportunities in most market areas for commercial practitioners. As in the residential sector, areas with strong job growth are doing fairly well.”

Overall job gains are slowing, but retail employment has been weak since the beginning of this year, construction jobs have been trending down since the beginning of last year, and manufacturing jobs have been trending down since the start of the decade, Yun noted. “On the other hand, professional business service jobs have been rising since the middle of 2003, and that supports demand in the office market. Wholesale trade jobs have trended up since the middle of 2004, reflecting stronger international trade conditions.”

Job growth has been strongest in Colorado, Louisiana, Texas, Washington, Wyoming and Utah. Job losses are greatest in Arizona, California, Florida, Michigan, Nevada, and Ohio.

Even with concerns about inflation and consumer confidence, and weakness of the dollar, corporate profits have been near record highs. Exports are growing faster than imports, and business spending on equipment and software has trended up strongly since the beginning of 2003.

“Altogether, I don’t expect a recession, but rather a period of slow economic growth that should improve in the second half of this year,” Yun said.

The NAR forecast for major commercial sectors includes analyses of quarterly data for various tracked metro areas. The sectors are the office, industrial, retail and multifamily markets. Metro data were provided by Torto Wheaton Research and Real Capital Analytics.

Office Market
Net absorption of office space in 57 markets tracked, including the lease of new space coming on the market as well as space in existing properties, should decline from 21.2 million in the second quarter of 2007 to 8.7 million in the current quarter.

Office vacancy rates are forecast to average 13.3 percent in the fourth quarter, up from 12.5 percent a year earlier. Annual rent growth in the office sector is likely to be 3.5 percent in 2008, compared with 8.0 percent last year.

Industrial Market
Net absorption of industrial space in 58 markets tracked is estimated to edge down from 35.4 million square feet in the second quarter of last year to 33.3 million in the second quarter of 2008.

Industrial vacancy rates nationally will probably rise to 9.6 percent in the fourth quarter from 9.4 percent in the same period in 2007. Annual rent growth should be 3.3 percent by the end of 2008, compared with 3.6 percent in the fourth quarter of last year.

Retail Market
Net absorption of retail space in 53 tracked markets is seen to rise from a negative 169,000 square feet in the second quarter of last year to 6.4 million square feet in the current quarter.

Vacancy rates are projected to decline to 8.8 percent by the fourth quarter from 9.2 percent at the end of last year. Rents are forecast to rise an average of 1.4 percent in 2008 compared with a 3.2 percent increase last year.

Multifamily Market
Net absorption in the apartment rental market – multifamily housing – is expected to rise slightly in 59 tracked metro areas, from 70,700 units in the second quarter of 2007 to 71,800 units in the current quarter.

Vacancy rates are projected to average 4.8 percent in the fourth quarter, down from 5.1 percent at the end of 2007. Rents are likely to rise 3.8 percent in 2008, up from a 3.1 percent gain last year.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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The next Commercial Leading Indicator index will be May 21; the next commercial real estate market forecast is scheduled for June 18.

Monday, May 12, 2008

Revenue Alternatives For Vacant Retail

If you have vacant retail property, ongoing costs are a major concern while it is empty.

If the property is located in a high traffic (pedestrian and/or automotive) area in a major metropolitan district, then we have a suggestion to help the vacant site to generate recurring revenue until you have a tenant in place...

You can alleviate some of the financial burdens of the vacant retail property by allowing your space to be used for displaying advertisements by blue-chip companies in it's windows.

(It may also help get your property noticed by potential tenants!)

Contact us for help with marketing your site and increasing your property's revenue potential anywhere in the Delaware Valley.

We provide landlord and tenancy representation as well as property management services.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

Sunday, May 11, 2008

Happy Mother's Day

The first Mother’s Day observance was a church service in 1908 requested by Anna Jarvis, of Philadelphia, to honor her deceased mother.

Jarvis, at an early age, had heard her mother express hope that a day to commemorate all mothers would be established. Her mother had also expressed the sentiment that there were many days dedicated to men but none to mothers. Two years after her mother’s death, Jarvis and friends began a letter-writing campaign to declare a national Mother’s Day observance to honor mothers. In 1914, Congress passed legislation designating the second Sunday in May as Mother’s Day.

Click here for the Cenus Bureau's "Facts for Features and Special Editions" statistics relating to this celebration.

Additional Mother's Day Resources:

Wikipedia - Mother's Day
Mother's Day On The Net
Mother's Day Blessings
Happy Mother's Day
History of Mother's Day

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Friday, May 09, 2008

Eminent Domain Bill Still In Committee

The Senate Community and Urban Affairs Committee held a hearing concerning eminent domain legislation, S757 - Rice (D28) on May 5, 2008. The bill did not receive enough votes to pass the committee, but will be placed for a vote again on Thursday, May 15.

The bill revises current procedures for the use of eminent domain in municipal redevelopment programs. (Source: NJAR)

Thursday, May 08, 2008

Upon Further Inspection

One of the most important steps in the home buying and selling process is often overlooked: the home inspection. While many buyers and sellers alike are wary of inspections (for fear of finding the dreaded "deal-breaker"), in reality thorough and timely inspections \help smooth the process and prevent headaches during or after closing.

The Difference between Appraisal and Inspection

Many consumers are unclear regarding the difference between a home appraiser and a licensed home inspector. A house appraisal is an independent evaluation of the current market value of the home. Generally speaking, the appraiser's job is to review the property to determine its worth relative to similar properties in the area and recent sales history. With that value set, the lender can determine how much money can appropriately be loaned to the buyer. Appraisers typically work for the bank, the FHA, or HUD depending on the type of loan.

In contrast, the house inspector is trained to identify items in the home that need either replacement or repair. A licensed inspector will carefully examine the home's structural components, heating, cooling, plumbing and electrical systems, insulation, roofing and so on. A home inspection report will give far more detailed information than available in a home appraisal.

While an appraiser will perform a walk through of your home, it is typically a cursory examination that lasts between 15 and 30 minutes. An in-depth home inspection will last from two to three hours. An appraiser may point out potential problem areas, but they are not trained to spot damage or faulty systems. Only a certified inspector can adequately review the quality and condition of a home for sale.

Seller's Perspective: Informed Buyers, Added Protection

Many sellers choose to have their home inspected before ever putting the property on the open market. Such presale inspections are combined with the seller's disclosures to form a comprehensive disclosure package of documents about the home.

Some sellers shy away from this practice, feeling that it is an unnecessary expense when many buyers will obtain their own inspection anyway. But presale inspections aren't meant to replace the inspection an interested buyer will seek, rather they are meant to increase a potential buyer's knowledge about the property. Well-informed buyers will be less likely to walk away from a property that they like, and by providing a disclosure package you show buyers that you are negotiating in good faith.

The presale inspection is also a safeguard against potential home defects that might affect a future closing or even worse result in legal action after the sale of the home. An early inspection can help you identify any items you that will require either repair or disclosure (and possible concessions) as you move forward.

Buyer's Perspective: Cost-Effective Peace of Mind

A presale inspection provided within the seller's disclosure package does not mean that smart buyers should go without a second inspection by an inspector of their own choosing. In general, a home that has been thoroughly inspected benefits buyer and seller alike.

Buyer-driven inspections are common contingencies in many sales contracts. While some sellers may request a specific inspector, most will allow the buyer to pick an inspector without restriction. If a seller will not pay for all or part of the inspection without first approving the inspector, consider paying for an independent inspection out of pocket. Look for experienced inspectors with a strong reputation in the community (see the "Finding the Right Inspector" section below).

Occasionally a buyer will opt instead to do a walk through with the original presale inspector to gain further information about items in the disclosure package. While this does give the buyer the chance to ask questions about the property (and it is better than no inspection at all), it's usually best to have a true second opinion whenever possible.

Specialist Inspectors

If the general inspection identifies problems or potential defects, seek a second inspection by a specialist. The reason for this is simple: while home inspectors are trained to spot defects throughout your home, by their very nature they do not have specific expertise with every single structure or system in the house. For example, an inspector may cite signs of wear on a HVAC system as possible evidence that a replacement is in order. Calling in a licensed heating contractor may either confirm the existence of a problem or show that the general inspector was mistaken.
Additional inspections do come with an expense, but they can prevent surprises after closing or eliminate unnecessary repairs, the cost is easily offset. If the general inspector recommends additional inspections (which is often the case), you should heed the advice.

Finding the Right Inspector

Whether buying or selling, picking the right inspector is an important decision. A good inspector will be experienced, meticulous and plainspoken. It pays to use a home inspector with a proven track record in your area. You'll also want an inspector who will stand by their work and take responsibility for any oversights or errors. If the inspector is also a general/repair contractor, they should disclose this information upfront. Both seller's and buyer's agents can typically provide referrals of qualified inspectors. You can also check for local members of the National Association of Home Inspectors (NAHI) or the American Society of Home Inspectors (ASHI), two of the most respected home inspection associations.

National Association of Home Inspectors: www.nahi.org/

American Society of Home Inspectors: www.ashi.org/

The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.

Wednesday, May 07, 2008

Top Ten Energy Efficient Remodeling Projects

PATH, a public-private partnership for advancing housing technology, last year released recommendations on the top remodeling technologies to make existing homes more durable, stronger and more resource efficient.

Each of the PATH Remodeling Top 10 technologies chosen is rated on affordability, energy efficiency, ease of installation, quality and durability, environmental performance and safety.

More information...

Existing-Home Sales Soft in Near-Term But Expected to Rise Midsummer

A flat pattern in home sales activity should continue for the next couple months before improving over the summer, according to the latest forecast by the National Association of Realtors®(NAR).

Lawrence Yun, NAR chief economist, said the extent of an expected recovery hinges on better access to affordable loans. "Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," he said. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."

The Pending Home Sales Index (PHSI),* a forward-looking indicator based on contracts signed in March, edged down 1.0 percent to 83.0 from a downwardly revised level of 83.8 in February, and was 20.1 percent lower than the March 2007 index of 103.9.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said additional costs in many markets are hindering a recovery. “Our members are telling us that more buyers are looking at homes but are slow in signing contracts, and that’s contributing to the weakness in pending home sales,” he said. “In many cases buyers are waiting for greater access to affordable credit, especially in higher cost areas, but some are disappointed with what appears to be unnecessarily restrictive lending requirements. The good news this week is there is some discussion toward relaxing some of the burdensome lending practices.”

The PHSI in the Northeast jumped 12.5 percent in March to 80.8 but remains 15.4 percent below a year ago. In the South, the index slipped 0.1 percent to 84.9 and is 26.7 percent lower than March 2007. The index in the West declined 1.4 percent in March to 91.2 and is 9.5 percent below a year ago. In the Midwest, the index fell 10.4 percent in March to 74.1 and is 22.3 percent below March 2007.

Existing-home sales are projected to rise from an annual pace of 4.95 million in the first quarter to 5.82 million in the fourth quarter. For all of 2008, existing-home sales are likely to total 5.39 million, and then rise 6.1 percent to 5.72 million next year. “Although more than half of local markets are expected to see price growth this year, the aggregate existing-home price will decline 2.4 percent in 2008, driven by a relatively few markets that are very oversupplied,” Yun said. The median price is forecast at $213,700 this year before rising 4.1 percent to $222,600 in 2009.

Some areas already are seeing sales increases, underscoring that all real estate is local. In March, unpublished snapshot data shows sales in Bakersfield, Calif., and Jackson, Miss., were higher than a year ago. At the same time, price gains were noted in markets such as Buffalo-Niagara Falls, and Cedar Rapids, Iowa. On May 13, NAR will report first-quarter data on metropolitan area home prices, covering about 150 metro areas, and state home sales.

"Although some market adjustments are necessary, a downward overshooting of the housing market would cause unnecessary loss in economic output, income and jobs," Yun said. "It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that."

New-home sales are expected to fall 30.9 percent to 536,000 this year before rising 10.1 percent to 590,000 in 2009. Housing starts, including multifamily units, will probably drop 29.5 percent to 955,000 in 2008, and then rise 1.3 percent to 967,000 next year. The median new-home price is estimated to fall 3.7 percent to $238,000 this year, and then rise 5.4 percent in 2009 to $250,900.

The 30-year fixed-rate mortgage is likely to rise gradually to 6.2 percent by the end of the year, and then average 6.3 percent in 2009. NAR’s housing affordability index is expected to rise 10 percentage points to 127.0 for all of 2008.

Growth in the U.S. gross domestic product (GDP) should be 1.5 percent this year and 2.3 percent in 2009. The unemployment rate is projected to average 5.3 percent in 2008 and 5.5 percent next year.

Inflation, as measured by the Consumer Price Index, is seen at 3.4 percent this year and 2.2 percent in 2009. Inflation-adjusted disposable personal income is forecast to grow 1.2 percent in 2008 and 3.0 percent next year.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for April will be released May 23; the next Forecast / Pending Home Sales Index will be released June 9.

Friday, May 02, 2008

Optimistic Outlook for Luxury Vacation-Home Market

The outlook for prime vacation-home property over the medium and long term is strong and optimistic according to the 2008 Annual Wealth Report. (Lauren Baier Kim, April 29, 2008, The Wall Street Journal)

More Information. . .

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).