5 Good Reasons to Sell Your House NOW

by Steve Harney on March 24, 2010




In Monday’s blog, 5 Good Reasons to Buy That Home NOW!, I discussed why now was the best time to jump in and buy a home. Today I want to discuss why now is also the time to sell a house you own. It might seem contradictory to claim that it is the best time to buy and the best time to sell. But actually both statements are true because of same reason – government stimulus.

The reason more people should be jumping in to buy is because of the Homebuyers’ Tax Credit and low interest rates. Combined these two situations will dramatically lower the ‘cost’ a buyer will pay even if home prices continue to soften.

Selling now makes sense because, once these advantages disappear, there will probably be a drop-off in demand. And we all know that ‘price’ (which the seller is most interested in) will be determined by supply and demand. So let’s go over those 5 good reasons to sell NOW!

1.) The Homebuyers’ Tax Credit will expire next month

Obviously the purpose of the tax credit was to entice buyers to purchase houses. But what will happen to demand once the tax credit ends? Many feel that the program dragged buyers forward. By that I mean that buyers who had planned to purchase later in the year may have moved up their plans to take advantage of the credit. The only question left is how badly will demand drop-off? Less demand usually equates to lower prices. Below is a graph that shows the dramatic reduction in demand after the Tax Credit was initially supposed to expire in late November:

 

2.) The Fed is about to exit the MBS purchase program The mortgage industry has returned to the standard that every buyer must ‘qualify’ for their mortgage. If interest rates rise, the mortgage payment rises also. As a result, there will be fewer buyers who qualify at each price point.

In yesterday’s post our resident mortgage expert, Dean Hartman, explained that interest rates will rise as we proceed throughout the year. That will have a negative impact on demand.

3.) Many of today’s sales will not create a buyer

In a normal market almost every sale creates another buyer. However in today’s market many of the sales are short sales or foreclosures. They do not create an additional buyer. Again DEMAND DOES NOT INCREASE.

4.) There is a ‘shadow’ inventory of foreclosures coming to the market

There is a large volume of foreclosed properties which are currently being held by banks. In the near future these houses will come to the market at discounted properties. How many? In an article in the Wall Street journal this past week titled How Many Homes Do Banks Have Up Their Sleeves? the following estimates were reported:

Barclays Capital uses foreclosure data from mortgage securities to estimate that there are slightly more than 600,000 homes in the process of foreclosure.

RealtyTrac, which examines public records, estimates the number is closer to 700,000.

Independent housing economist Tom Lawler combines data from Fannie Mae, Freddie Mac, the Federal Housing Administration, Federal Deposit Insurance Corp., and securitization trusts to conclude that there are actually about 500,000.

As these properties come to market there will be an increase in supply of homes. This will create downward pressure on prices.

In addition, more and more families are finding it difficult to keep up with their mortgage payments. And once they fall behind, they are finding it almost impossible to catch back up.

Last week Housing Wire ran an article titled In Housing, a Supply Problem of Epic Proportion . The article reported:

To understand the depth of the problem here: we’ve already got 4.7 million loans either 90+ days delinquent or in foreclosure, according to LPS data.

How do these numbers compare to numbers in the past? Here is a chart from the LPS report showing both foreclosure and delinquency percentages over the last fifteen years:

The 90+ day delinquencies will eventually end in either a foreclosure or a short sale. Again an increased supply of distressed properties can only negatively impact prices going forward.

5.) It isn’t always about the money

If you are considering whether or not to sell your home there must be a reason. Perhaps it is time to move-up to that dream home on the water. Maybe the time has come to downsize and have the freedom to travel more. Maybe you miss the rest of your family who now live in a different part of the country.

Selling a home should not ONLY be about the money. Sometimes it is about moving ahead in your life and doing the things you want to do or need to do. Don’t let money get in the way of living your life.

What does this mean to you?

If you are thinking of selling your house, consider the theory of supply and demand. After this spring, demand might wane because of the exiting of government support and the supply of distressed properties will probably increase dramatically. Now is probably the time to sell.

http://kcmblog.com/2010/03/24/5-good-reasons-to-sell-your-house-now/

Half-Price homes? Canadians Pounce on the Sunbelt

From Stella Giudicelli at Moneycorp:


A client of ours whom I talked to today said this article appeared on the front page of his newspaper last week. He said that this article helped him make a decision to buy now, rather then holding off. Once again, the exchange rate is very important for your international clients. Please ask your Canadian clients if we can contact them to discuss this matter. We will give them a much better exchange rate then their banks. It’s worth shopping around!

Click on the link below to read the article:
http://www.yourhome.ca/homes/newsfeatures/article/779603–half-price-homes-canadians-pounce-on-the-sunbelt

5 Good Reasons To Buy A Home Now

by Steve Harney on March 22, 2010

If you are considering whether or not to purchase a home in the near future, let us discuss why this might be the optimal time to do so. There are five excellent reasons to buy a home now instead of waiting until later. Let's go over them quickly in this post.

1.) The Homebuyer's Tax Credit

The federal government, in hopes of stimulating the economy, has made available to eligible first-time homebuyers a tax credit of eight thousand dollars ($8,000). The tax credit also makes six thousand five hundred dollars ($6,500) available to eligible move-up buyers. This tax credit is scheduled to end this spring. The home in question must be in contract by April 30, 2010 and you must close the transaction by June 30, 2010. To see if you are eligible, you can go to http://www.federalhousingtaxcredit.com/home.html

The Fed has announced that they will be definitely exiting their plan to purchase mortgage-backed-securities. That plan has lowered interest rates on a 30 year fixed rate mortgage by two full percentage points since its inception in October, 2008. [2]Almost every expert believes interest rates will increase immediately once the Fed backs away. Some, like Morgan Stanley, believe rates can return to the seven percent level that existed before the Fed involvement. What can that mean to you? In the adjourning graph, we can see that even if prices continue to soften, the change in interest rates could dramatically increase your monthly costs.

2.) Low Interest Rates Currently Available

The Fed has announced that they will be definitely exiting their plan to purchase mortgage-backed-securities. That plan has lowered interest rates on a 30 year fixed rate mortgage by two full percentage points since its inception in October, 2008. Almost every expert believes interest rates will increase immediately once the Fed backs away. Some, like Morgan Stanley, believe rates can return to the seven percent level that existed before the Fed involvement. What can that mean to you? In the adjourning graph, we can see that even if prices continue to soften, the change in interest rates could dramatically increase your monthly costs.

Find out more about why mortgage rates may soon spike

3.) Location, Location, Location

There is a tremendous selection of properties currently available. More and more buyers are seeing the opportunities that exist in today's real estate market. As more purchasers enter the market, many of the best values (determined by price, location, or both) will be gobbled up first. This is an opportunity for you to purchase that dream house your family has always relished.

As the Washington Post reported [4] last week, waterfront properties are at bargain prices:

For investors, second-home buyers or retirees who have been sitting on the sidelines for years, 2010 may be the time to dive into the beach market. Prices are now almost back to 2001 levels, and buyers previously priced out of this market may now be able to afford their dream home. In addition, the sheer inventory of available homes is quite favorable to a beach buyer.

4.) Real Estate Has Always Been a Good Long Term Investment

Though prices in many markets will continue to feel downward pressure in 2010, in the long term real estate will eventually return to historic returns. Even in the past decade, real estate was a better investment than the stock market as shown by the table below:

5.) The House Is a Home First and an Investment Second

In our culture today we are moving away from extrinsic values (power, money and prestige) and moving back toward more intrinsic values (wanting meaning in our lives). The home has always been a place where friends and family gather to share our live experiences whether at a party or over a simple dinner. We may be too focused on the cost of a house without taking into account the cost of delaying a return to the more fulfilling experiences a home brings with it.

What does this mean to you?

Only you truly know. But if you have a desire to settle down in your own home and enjoy everything that comes with the homeowner experience, this is probably the time to act.

http://kcmblog.com/2010/03/22/5-reasons-to-buy-that-home-now/#more-3445

Sarasota and Manatee Counties: Year over end sales comparison

In Manatee and Sarasota Counties, sales and pending sales for the month of February continued to paint a picture of sustained recovery across both areas. The number of homes for sale declined by as much as 24% (in Sarasota County) versus last year, while sales were up by as much as 27.2% ( in Manatee County);

*Data courtesy of Trendgraphix

Longboat Key Video

Between the destinations of Lido Key and Anna Maria Island, LONGBOAT KEY is a fine mix of tasteful luxury and manicured surroundings. Just minutes from the heart of Sarasota, the long and narrow island feels like a secluded community with an elegant flavor of its own.