Thursday, January 28, 2010

Massachusetts Home Prices Increase in December 2009

The sale prices of single family homes and condominiums in Massachusetts increase by double digit percentages in December 2009 over the same period in 2008. With help from the home buyer tax credit incentive, the average sale price increased 10.9 percent. This was the first double digit increase in home prices in over 4 years.

The number of units sold in December was also up over the previous year. There were 3007 single family homes sold in Massachusetts, a 14.6% increase over 2008. Condominiums had even higher numbers, with a 31.7% increase in units sold year over year.

Inventory levels have gone done for the 21st month in a row. A year ago we had 9.6 months supply of single family homes and 11.3 months supply of condos. Last month we had 7.2 months supply of singles families and only 5.6 months supply of condos.

Monthly numbers don't mean as much as yearly figures do because of short term fluctuations in the market. But the yearly figures look pretty good also. Sales of single family homes for 2009 were up by 4.1% over 2008. Although the median sale price was down 6.8%, much of the drop in price came from the beginning of the year. The number of homes on the market was down almost 16% over 2008.

Jim Armstrong

Friday, January 22, 2010

FHA Mortgage Insurance Premium to be Raised

The FHA will soon raise the UFMIP (Up Front Mortgage Insurance Premium) that they charge on all mortgages.

On any new FHA mortgages after April 5th, the UFMIP will now be 2.25% of the loan amount, as opposed to the current 1.75%.

Currently a $300,000 purchase with standard 3.5% down payment would have a $289,500 Base loan amount. The mortgage insurance would be $5,066 (1.75% UFMIP). So that makes the Total loan amount $294,566. At 5.00% that would be $1,581 for Principal and Interest.

Same purchase price after April 5th.

$300,000 purchase with 3.5% down payment would have the same base loan amount of $289,500. The mortgage insurance would go up to $6,513 (2.25% UFMIP). The Total Loan Amount is $296,013. At 5.00% that would be $1,589 for Principal and Interest.

As you can see this change will affect the overall balance of the mortgage, however it should not have a large impact on the monthly payment.

Here is how the change will work time-wise if a homebuyer wants to avoid the increase:

Homebuyers will need to have an FHA CASE number prior to 4/5/10. They will not have to close before that date. So for example, your client puts a property under agreement 3/25/10. They contact their mortgage person to immediately to start the application process and obtain an FHA case number. The buyer will be grandfathered in under the old calculation as long as they obtained their FHA case number prior to 4/5/10. The FHA Case Number is tied to the property as well as the client – so clients who have not identified or put a property under agreement by 4/5 will be subject to the new calculation.

Thursday, January 21, 2010

Do I need a REALTOR? A Question From a Home Buyer.

Question: I'm paying cash for a home, so I don't need a REALTOR, right?
- Rachel from Texas
Answer: Paying cash would be even more of an incentive to use a REALTOR. You will not have any other professionals, other than the closing attorney, to help protect your interests and investment. Our job isn't just to show a person properties, but to help out in all aspects of a home purchase. The last thing you want to do when buying a home is to deal directly with the listing agent. That agent represent the seller of the home, and is trying to get the best deal for his/her client. That means he/she is going to try to get as much of that cash from you as possible. A REALTOR Buyer Agent, on the other hand is there to protect you and help you pay the least amount for a home. Your REALTOR also provides a host of other services, also. Best of all, there is no cost to you for the service!
For more information on the advantages of using a REALTOR, please go to:

Jim Armstrong