HOME PRICES TAKE FIRST RISE

Home prices across most of the country have started to rise from the depths of the housing slump, a critical trend that will help stabilize the broader U.S. economy.

Across the Nation, prices in the second quarter posted their first quarterly increase in three years, according to the widely watched Standard & Poor's/Case-Shiller's U.S. National Home Price Index.

The monthly index of 20 major cities also rose from May to June, with Dallas and Denver clocking their fourth-straight increase. Only Detroit and Las Vegas saw prices fall in June.

The U.S. National Home Price Index rose 1.4 percent from the first quarter to 133, though was still down almost 15 percent from the second quarter of last year.

Home prices are at levels not seen since early 2003. Prices, on a seasonally adjusted basis, have fallen 30 percent from the peak in the second quarter of 2006. The jump in residential home sales in the Miami/Ft. Lauderdale area took had the largest one monthly increase in the last ten years at 7%

The monthly index of 20 major cities increased 0.7 percent to 142 from May to June, the second straight month the index didn't decline. It was still 15.5 percent below June a year ago.

WHAT IT SHOWS: The 20-city index is a three-month moving average of repeat sales of a designated group of single-family homes in each city. By measuring the sales price of the same properties over time, the index prevents the data from being skewed by a change in the types of homes sold. Sales between related parties, such as family members, are excluded because they may not reflect true market values.

The Case-Shiller quarterly index is a composite of home price indexes for the nine U.S. census divisions.

WHAT IT DOESN'T SHOW: The indexes only measure price data in 20 major metropolitan areas in 15 states and the District of Columbia. So many areas of the country are not represented.

WHY IT MATTERS: Investors closely watch the Case-Shiller indexes to gauge the level and direction of home prices. The indexes include a broader mix of properties compared to the index created by the Federal Housing Finance Agency. That index excludes many high-end properties, as well as homes bought with riskier mortgages or all cash.

THE QUOTE: "For the second month in a row, we're seeing some positive signs," said David M. Blitzer, chairman of the S&P index committee, adding, "There are hints of an upward turn from a bottom."

In other words,  IF you want to make a smart investment, buy a real asset like Real estate as a hedge against inflation, but that also has income producing possibilities.

New Rules to Help Homeowners "Squeezed" by falling Equity

 

More homeowners suffering mortgages larger than the value of their home can now trade in their mortgage for a more affordable home loan, under a broader Making Home Affordable refinance and Mortgage rule.

Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value.

Previously, the Home Affordable Refinance Program's loan-to-value limit was 105 percent.

It's the latest effort by the government to help more homeowners refinance their mortgage at a lower rate and reduce their monthly payments.  The idea is to induce homeowners that ARE upside down in their equity to stick in there and keep the property by refinancing to a lower rate and thereby paying lower monthly expenses on the property.

Also, if the existing mortgage was written without mortgage insurance, the new loan won't be burdened with the extra cost.

Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.  Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.

As usual, high-coast areas including many in California, New England, New York and most resort and second home areas such as Florida won't see much relief. Until the Fannie Mae Freddie Mac conforming loan limit was raised in high-priced areas last year, high-cost area homes were too expensive to be purchased under Fannie and Freddie guidelines.

The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.

The higher loan-to-value ratios are available now to qualified borrowers who apply through their existing servicer. After Oct. 1 a homeowner can shop around and refinance through any Fannie or Freddie lender.

To check your eligibility for a refinance under the new provision, go to Making Home Affordable.

Do You Really Know What You are Doing in Today's Market?

The current sales market continues to be brisk compared to last year as we posted the 10 straight month of sales gains in Miami-Dade County.

829 homes and condos sold in June with sales prices that were 89% of asking price. The average sales price was $510,000 and the median price was $280,000 and stayed on the market for 128 days. 71% of the recorded sales were REO's bank own foreclosured or short sales. This figure has gone down slightly each month for the last four months as inventory of the best prices properties begins to dry up.

Overall, the HOUSES LISTED FOR SALE decreased relative to last year. In June 2009 there were 10,465 compared to 17,058 in June of 2008. The NUMBER OF HOUSES sold in June 2009 was 846 compared with 508 in June of last year.

This all continues to be good news for the consumers and and home buyers as well as the Real Estate industry as a whole. One very positive sign is that for the last two months NEW HOME sales have increased nationally. New homes, of course, but construction workers and contractors to WORK and that is certainly welcome news.

The National Associatio of Realtors has great advice in this current Real Estate market that should be heeded by any prospective homebuyer.

Here's how to get ready to be and remain a homeowner.

Create a wish list. Write down housing wants and needs. Include all the physical characteristics you want or need. Include style, size, layout and room configuration. Look at the number of bedrooms and bathrooms, and the basic amenities you must have. Include critical features such as location and services and a home's proximity to good schools or public transportation lines.

Browse for housing. greghardcastle.com offers home valuation features and neighborhood data on trends in local markets. Use features to determine how a listing compares with nearby, comparable properties in terms of value, actual sales prices, home features, neighborhood characteristics, and more. In other words.....GET SMART. It doesnt take that much to get alot of very important information on the property and area that you are interested in.

Work with an expert. Finding a real professional who will represent your best interests can make the difference in location, negotiating the best offer, and closing the home of your dreams. Look for a full time real estate agent, who has uploaded telling photos and videos of their listings and look for agents with good Web sites to market your listing.

Get the complete picture before you visit. You can't know everything about a community from an online listing. Schools, crime, and proximity to shopping and work all impact property values. NAR says talk to a Realtor and go to Realtor.com to explore communities.

Make sure the property details are reliable. Buyers need know when a listing has experienced a price change. Look for Web sites like Realtor.com that updates listings frequently, including price changes. Fresh and reliable information is critical. Realtor.com time stamps listings to help buyers make better informed decisions. Get email alerts and stay on top of changes so you can be first to act.

Most of the above mentioned points are steps that an experienced Realtor will walk through with you. Why leave one of the most important financial decisoins you will make in your life time to chance or a novice. And in the end.....thats why IM HERE!