Jobless Rate Falls. First Time since 2007

Jobless Rate Falls. First Time since 2007

The state unemployment rate fell last month for the first time in nearly three years as Massachusetts employers added thousands of jobs, the clearest sign yet that the economic recovery is gaining strength, the state reported yesterday.

The job gains were broad based, spreading across sectors from retail to technology to financial services, and apparently strong enough to bring down the unemployment rate even as thousands more residents entered the labor market in search of work.

“It is hard to see anything bad in this,’’ Alan Clayton-Matthews, an economics professor at Northeastern University, said of the report.

See the rest of the article at Boston.com

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Pending Homes Sales up 9th Month in a Row.

WALTHAM, MA. – April 6, 2010 – The Massachusetts Association of REALTORS® (MAR) reported the number of single-family homes placed under agreement in March 2010 was up 27 percent over March 2009, and condominiums were up 38 percent. March is the ninth straight month that the number of both single-family homes and condominiums placed under agreement had increased over the year before.

“It appears that the record rains in March didn’t keep buyers from taking advantage of the market conditions and making offers on homes,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield. “Whether the rain will impact how many of these deals close is still a question, but the buyers are out there and that is a good sign for the market.”

There were 4,808 single family homes put under contract in March 2010, compared to 3,783 in March 2009. On a month-to-month basis (which really doesn't mean squat because of seasonal & monthly fluctuations), single-family homes put under agreement were up 37.8 percent from 3,489 homes in February.

The number of condos put under agreement in March was 2,1222 compared to March 2009 with 1,543 units.

Jim Armstrong

Boston in the Top Ten Cities for Borrowers

Top 10 Best Cities for Borrowers
Some cities are better than others for borrowers.

The best cities have the lowest percentage of foreclosures and delinquencies, including a low percentage of bank-owned homes. In most of the cities on this best list, home prices are actually rising. Boston ranks 6th in the list of the top ten.

This kind of solid housing market motivates banks to offer lower rates and better terms.

Here are the 10 cities that Forbes ranks as the best for borrowers:
1. Kansas City, Mo.
2. Houston
3. Dallas
4. Virginia Beach, Va.
5. San Antonio, Texas
6. Boston
7. Pittsburgh
8. Denver
9. Seattle
10. Portland, Ore.

Time to Spring Ahead...and Check Those Smoke Detectors!

Tonight is the night (actually, tomorrow morning at 2am) that we turn our clocks ahead by one hour, and when we should be replacing the batteries in our smoke detectors (and carbon monoxide). This year, with the change in the smoke detector regulations, you should consider replacing any of your smoke detectors that are near (within 20ft) a kitchen or a bathroom with a shower with a photoelectric model.

Most smoke detectors that are currently installed in homes are of the ionization type. They work very well, but are prone to going off due to cooking vapors and steam from a shower. When this happens, people tend to remove the batteries to shut them off, and ultimately forget to put them back in leaving everyone in the home vulnerable to a fire. The photoelectric type is not as sensitive to false alarms, therefore the batteries won't be taken out, leaving them ready to do their job at all times.

Though the new law that goes into effect in April only applies to new construction and homes that are being sold, you should take the initiative and install the photoelectric detectors now.

Jim Armstrong

New Massachusetts Smoke Detector Requirements

New State Smoke Detector Requirements

3/8/2010

A new regulation regarding the installation and maintenance of smoke detectors goes into effect April 5, 2010. These new regulations were enacted by the Massachusetts Department of Fire Services and will apply to single and multi-family homes built or most recently substantially altered prior to Jan. 1, 1975 and sold on or after April 5, 2010. Homes built or substantially altered on or after Jan. 1, 1975 are governed by the State Building Code, which already imposes the same requirements & restrictions.

See the rest of the article Here: Massachusetts REALTOR News

Will Congress Extend the Home Buyer Tax Credit?

It’s that time of year again: time for lobbyists to convince Congress to extend the home buyer tax credit.

The National Association of Realtors and other industry groups are beginning to make the rounds on Capitol Hill to press their case, which goes something like this: We know you’ve extended the tax credit two times already, but the housing market is still fragile, the tax credit is working, and don’t forget– you’re up for re-election soon. In other words, do you really want to own the next leg down in home prices?

See the rest of the article at the Wall Street Journal online:

http://blogs.wsj.com/developments/2010/02/22/take-three-will-congress-extend-the-home-buyer-tax-credit/

For Sale, But Not For Long

Karen Daly headed out Sunday to tour a renovated Natick house, confident she would be one of the few home hunters on a cold afternoon during which people were prepping for Super Bowl parties.

But when Daly arrived at the three-bedroom, $449,000 Cape, she found herself among a half-dozen other disappointed prospective buyers who learned that the seller had already accepted an offer. It wasn’t Daly’s first real estate letdown. Last month, she bid more than $20,000 above the asking price for a house in Framingham -- and lost out.

“If you are a buyer, you have to be very decisive, you can’t hesitate,’’ said Daly, 55, who sold her house in two days last summer and has been renting in Newton. “You are looking at very low inventory and very steep competition.’’

See the entire article at Boston.com: http://www.boston.com/business/articles/2010/02/13/for_sale_but_not_for_long/

Homeownership: Still the American Dream

There seems to be a long held American belief currently under attack. For over two hundred years, homeownership in this country was a desire of almost every American family. Recently however, more and more people have been pontificating on the fact that owning your own home should never have been held in such high regard.

I don’t want to overstate my concern as I know that the majority of Americans still hold homeownership sacred. Trulia just did a survey showing seventy seven percent of those questioned still believe that owning a home is a part of the American dream. Yet, it does concern me that, while people are being forced from their home due to economic difficulties, some are claiming that homeownership never should have been the goal anyway.

See the whole article here: Homeownership: Still the American Dream

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

http://www.marealtor.com/content/NewsTicker.htm?view=38&news_id=1254&news=31

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 5^th, 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 5^th.

$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.

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:
http://armstrongfield.com/buyers_files/whyrealtorbuying.html

Jim Armstrong

Mortgage Rates Still on the Rise Ahead of Treasury Auctions

Mortgage Rates Still on the Rise Ahead of Treasury Auctions

Mortgage rates took a beating last week. Even the most aggressive lenders are now creeping towards 5.00% (for WELL-QUALIFIED borrowers). See more...

Check Those Smoke Detectors: New Massachusetts Smoke Detector Regulations Go Into Effect Jan. 1

Check Those Smoke Detectors: New Massachusetts Smoke Detector Regulations Go Into Effect Jan. 1

Armstrong Field Real Estate is Moving!

Received notice from Salem Five Bank (the landlord for my office) that they will not be renewing my lease at the end of February because they want to expand their call center. I said "Why don't you use the vacant space that is in your upper floors?" Evidently that is not in their master plan. I should have known when they didn't renew the lease for the other business that was next to me. Why would Salem Five use valuable ground floor space for a call center that does not have walk-in traffic? (doors are always locked). It is against everything that Salem is trying to do with their downtown - First floor space should be for retail or businesses that create foot traffic (ie: my business).

The good news is that I have found what is even better space then we have now. I'm currently negotiating the details of a lease. It has huge south facing windows, more space than what we currently have, plenty of storage, better parking, better visibility, restored antique hardwood floors and more.

The bad news is (besides the fact that I really hate moving) that it will cost a lot of money to build out and set up the space with a phone system, computers, desks, etc. Not to mention changing the address on everything. But with 4 new agents signing on this month (currently 18 agents) and more in the pipeline, it will be good to have the extra space. Plus I can build myself a office bigger than the 6'x7' space I am now using. Plus a game room (guitar hero competitions every Friday!), kitchen area, library, conference room and more.

Watch here for updates and our grand opening.

Jim Armstrong

Real Estate Outlook: Housing Warmer Than Weather

Real Estate Outlook: Housing Warmer Than Weather

If new applications to buy homes are any gauge, the U.S. housing market is warming up, and that's despite the fact that we're now into the traditionally quiet holiday season.

Applications for home purchase loans soared 42 percent last week on a non-seasonally-adjusted basis compared with the week before, according to the Mortgage Bankers Association.

That burst of activity may have been influenced in part by the long Thanksgiving week layoff. Or it could have been an early reaction to the extension of the $8,000 tax credit or the start-up of the new $6,500 credit.

Either way, it was an exceptional week for mortgage lenders.

But here's another possibility: With the economy gaining a little momentum, interest rates have begun edging up again.

Mortgage rates are still close to historic lows, 4.9 percent on average for 30-year fixed and 4.3 percent for 15 year fixed, but MBA chief economist Jay Brinkmann says they're likely to exceed 5.2 percent by this coming March.

So, maybe the rush to nail down financing by home buyers is a smart move … compared with paying half a point higher rates by early spring.

On other economic fronts, we're looking at a mixed bag of reports this week, though mainly positive:

Freddie Mac's found home prices nationwide up by about one point on average during the third quarter. That's on top of a two percent gain for the second quarter. Clear Capital, a real estate data company, also found prices up marginally - by 1.4 percent - during the month of November, though a few local markets came in with double digit gains.

But not all surveys agree on that. The well-regarded “IAS 360” index came in with a contrarian result. It found that overall prices in the U.S. were down slightly on average -- by about half a percent.

Since there's not a huge variation among the three reports, we can probably safely conclude that -- at the very worst -- prices have stabilized in most markets -- and at the very best, they're up a little.

There were also positive indications on lower delinquencies and foreclosures across the country. Realty Trac says foreclosure filings in November dropped by 8 percent - the fourth consecutive month of declines.

And Trans Union, the big credit bureau, forecasts three percent fewer mortgage delinquencies next year - after three straight years of rising delinquency rates.

Meanwhile,another national study on price reductions on listed properties found that during November the number of price cuts dropped in 27 major markets, a welcome sign of more realistic asking prices.

From: Jim Armstrong's Real Estate Update - December 2009

New FHA Guidelines for Condominiums

New FHA Guidelines Could Amp Condo Sales

"FHA approved" may become the most popular condominium amenity in the United States soon, thanks to the new guidelines established by the FHA to take effect February 1, 2010.

The guidelines addressed the two imperatives facing condominium sales: down payments and the financial integrity of condominium associations. Both are equally important to a condominium recovery.

"FHA approved" used to mean a 3.5% down payment. Starting early next year, "FHA approved" will mean 3.5% down plus a financially stable association approved by your lender. This is huge.

According to Attorney Richard D. Vetstein, who writes the Massachusetts Real Estate Law Blog, the revised FHA Condominium Lending Guidelines include the following requirements:

To qualify for FHA mortgages, associations must:

• Maintain a reserve equal to 10 percent of the annual budget
• Make sure no more than 15 percent of its owners are more than 30 days late with condominium fees
• Allow lenders to review their financials and insurance policies
• No more than 10% of the units may be held by a single investor
• Fidelity insurance must be obtained for 20+ unit projects
• No more than 25 percent of space allowed for commercial use.

"The new FHA guidelines (combined with the almost year old Fannie Mae condominium guidelines) really make it imperative for condominium associations to get their collective acts together with respect to the financial management of the association," counsels Attorney Vetstein. "Condominium boards need to ensure that reserve accounts are adequately funded, condo fee delinquency rates are low and that the association is generally well run financially. If they don’t, they are contributing to a drag on market value for all units due to non-compliance with the new condominium guidelines.

For a new condominium to qualify for FHA financing the following guidelines apply:

Effective February 1, 2010:

• 50 percent of the total units must be presold before FHA financing is approved
• 50 percent of the total units must be owner occupied
• No more than 10% of units may be held by a single investor
• Unit owners must obtain individual HO-6 insurance policies if the master policy doesn’t cover interiors
• Re-certification is required every two years

Projects that received approval between October 1, 2008 and December 7, 2009 will be "grandfathered" and will have to follow the new guidelines’ re-certification process .

The marketing benefits are significant:

1. More buyers will enter the market because they can afford the lower down payment.
2. No single investor can purchase more than 10% of the units, so the idea of a controlled association by one or two investors is no longer a threat.
3. More inventory will offer wider choices tending to keep prices in check, as "FHA approved’ condominiums come on line.
4. More real estate agents will be willing to show condominiums to their buyers, because the lender who provides the mortgage will have to approve not only the condo documents, but the condo association’s budget, reserve account and its fidelity insurance policy.
5. New construction developers have the guidelines needed to create urgency in their pricing strategies, which is key to building and maintaining momentum.
6. Commercial lenders will have a more comfortable level with developers. While the 50% presale requirement may look obtrusive, it is actually a benefit to the developer, because it will create urgency for buyers to purchase.
7. Established associations that have dragged their feet to get their finances in order, now have a valid value-based reason to become "FHA Approved."
8. Real estate agents will show FHA approved condominiums with confidence in the association’s finances, not just because the down payment is low.
9. Forward thinking lenders will hustle to become a "an approved lender’ in resale and new communities alike
10. Knowing the property already has approved lenders will make competition for listings tighter and will attract more buyers and more prospects to the listing.

Brokers taking listings in condo communities without FHA financing will be competing with ones that do, making it important for associations to serious consider becoming FHA approved.

First time home buyers are generally thought of as the primary market for FHA financing. There is something to that, but in today’s world, many who bought their first homes years ago and lost them during this recession will appreciate the FHA financing availability even more than those coming out of rentals.

For now let’s agree that the FHA is being responsive and fair by giving new homes developers livable guidelines, associations a tool to become financially stable, and all associated with the industry, hope.

There will no doubt be other changes as the market calls for them "FHA was given a difficult task under the Housing and Economic Recovery Act of 2008 (HERA) to revamp the approval process for condominium projects, and before it established its latest guidelines, invited and was open to industry experts from organizations like the Community Associations. "As a result, significant improvements to the initial requirements have been made and dialogue continues between CAI and HUD in an attempt to create regulations that will lead to greater stability in the condominium market," Dawn Bauman, vice president of Strategic Initiatives for the Community Association Institute said. CAI is an organization representing more than 29,000 individual members, 60 local chapters, and the interests of the one in five homeowners living in a community association. For more information visit www.caionline.org.

It’s good to see that the buyer’s interest is represented. It shows. And it will pay off handsomely in the days ahead.

Cash for Caulking

Obama Proposes Cash for Caulking

A program has been proposed by President Obama on Tuesday that would reimburse home owners for installing windows, energy-efficient appliances, and insulation.

Under what has been dubbed “Cash for Caulking”, home owners would get a 50 percent rebate on energy-efficient air conditioners, heating systems, washing machines and dryers, refrigerators, replacement windows, insulation and other energy-saving improvements up to $12,000. This equates to a household that spends $24,000 could get $12,000 back.Most likely there would be no income restrictions.

The director at the American Council for an Energy-Efficient Economy, Steve Nadel, who is helping to create the legislation, says they are considering having contractors and/or retailers pay part of the cost upfront to reduce the need for home owners to come up with lots of cash.

Mortgage Rates Hit a Record Low

30-Year Rates Hit Record Low

The average interest rate for 30-year mortgages has fallen to the lowest level since Freddie Mac began compiling its weekly survey in 1971, declining to 4.71 percent this week from 4.78 percent a week ago.

Rates also were more attractive for 15-year fixed loans, which fell from 4.29 percent to 4.27 percent, but many consumers may not have qualified for them because they now face higher credit standards from lenders.

Still, the Mortgage Bankers Association's index of application demand, which rose 2.1 percent on a seasonally adjusted basis during Thanksgiving week from the previous week, shows that consumers were looking to take advantage of mortgage rates at a historic low.

Source: USA Today, Stephanie Armour (12/04/09)

Tax Credit Extended - and Expanded to Current Home Owners!

Home Buyer Tax Credit Extended to First-Time Buyers....
and Expanded to Current Home Owners!

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.


• Expands the credit to grant a $6,500 credit to current home owners
  purchasing a new or existing home between the date the bill is signed by President Obama and April 30, 2010. (Update - President Obama signed the bill on November 6, 2009).
  

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between the date the bill is signed by President Obama and April 30, 2010.
  
  


• Current home owners purchasing a home between the date the bill is signed by President Obama and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
  

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.


If you purchased a home between January 1, 2009 and the date the bill is signed by President Obama, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum credit allowed for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer’s tax credit is determined by additional factors:

1. The price of the home.


2. The buyer's income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit which is effective on the date the bill is signed by President Obama single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have been increased from the 2009 First-Time Home Buyer Tax Credit limits. If you purchased a home between January 1, 2009 and the date the bill is signed by President Obama, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a
Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Frequently Asked Questions about the new 2009/2010 Tax Credit

See the comparison between the current 2009 Tax Credit and the new 2009/2010 Tax Credit

For more information, Please contact me at
jim@witchcityhomes.com or
978-364-6736.

Jim Armstrong

Big Rebound in Existing-Home Sales

Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum
October 23, 2009 - Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months.

Read the entire release here.