Real Estate New York
Market Update February 2009
5 Top Blunders of Internet Home Buying
How to avoid the five common pitfalls of online real estate searching
By Matthew Bandyk U.S. News World Report
While the painful real estate swoon appears likely to extend well into 2009—at least—the number of Americans using the Internet to find the home of their dreams is poised to keep on climbing. According to the 2008 National Association of Realtors Profile of Home Buyers and Sellers, 87 percent of home buyers used the Internet to search for homes in the past year. That's up steadily from 84 percent in 2007, 80 percent in 2006. But despite its mounting popularity, the Internet home-buying process can present a host of pitfalls. To help make your online real estate searching more effective, here's a look at the top five Internet home-buying blunders and what you can do to avoid them.
1) Assuming you can do it all yourself. The Internet allows users to handle for themselves many of the tasks that could once only be performed by real estate agents. The NAR profile, for example, found that the number of home buyers who first learned of their homes on the Internet has been rising in recent years—to 32 percent in 2008, up from a tiny 2 percent in 1997. Accordingly, the number of home buyers who first learned of their homes through agents has been declining—it was at 34 percent in 2008, down from 50 percent in 1997.
But although the Internet can provide heaps of helpful tips and research, it would be a mistake to assume that the Web is all you need to buy a house—unless you are an experienced real estate investor. The process of purchasing real estate can be extremely complicated from a legal standpoint, and it's easy to make a mistake if you don't have an expert advising you. And when it comes to something as expensive as real estate, those mistakes could cost you thousands of dollars. "Doing all the paperwork yourself is a huge mistake," says Joshua Dorkin, CEO of BiggerPockets.com, a real estate networking and information site. "There are so many things you can miss on a contract."
[See 5 Reasons to Hire a Pro to Sell Your House ]
2. Use better tools: Homeowners using agents can get their property listed on Realtor.com, "which has more far-reaching access to market that property—with over 3 million properties on it—than the for-sale-by-owner sites, which have tens of thousands," Moore says. Independent sellers do not have access to this service.
3. Sidestep lawsuits: Agents can also protect sellers from potential litigation. "There are all kinds of liability issues that a seller could potentially face when ...dealing one on one with a buyer," Moore says. A homeowner could, for example, tell a potential buyer that hardwood floors extend to all corners of the house underneath the wall-to-wall carpeting. But if even one room has cement flooring, the homeowner could be sued, Moore says. Agents, who have experience dealing with these liability issues, can help homeowners dodge such scenarios.
4. Duck the riffraff : Independent sellers might not have any idea whom they are letting into their homes during open houses. These potential buyers might not have the credit to make the purchase—and would therefore be wasting the homeowner's time—or could even "try to rob them later on," Moore says. "It's a very scary kind of thing." She says that homeowners working with agents will have qualified buyers visiting their properties.
5. Avoid hardball tactics: It's a buyer's market out there. And with all the information available online, today's well-informed buyers are tough negotiators, too. Real estate agents have been through the home-selling process before and are trained in negotiating tactics—giving them a potential edge in hammering out a deal in the seller's best interest. "It's hard to do that with your own property, particularly if you are not a professional," Moore says. continued . . .
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Albany unemployment will grow in 2009, but not as high as other NY cities, study says
The Albany area's jobless rate is expected to climb to 7.2 percent this year, shedding 5,800 jobs during what forecasters believe will be among the deepest recessions on record.
Still, Albany will fare far better than other upstate cities, where the unemployment rate will rise to more than 8 percent, according to a study by Global Insight, a Massachusetts economic forecasting company.
The state's 12 metro areas will shed 224,000 jobs this year. Of those, 181,000 will be in New York City, the epicenter of the U.S. financial crisis, including 50,000 in the finance sector, based on Global Insight's analysis using U.S. Department of Labor data.
Meanwhile, the unemployment rate in six New York metro areas will rise above 8 percent. Buffalo, Rochester, Syracuse and Glens Falls are expected to be the hardest-hit upstate communities, says Global Insight.
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National Association of Realtors Style Blog
Welcome to Styled, Staged & Sold. This blog, hosted by REALTOR® Magazine, aims to give you the information you need to spruce up your listings and get them sold--or just be one up on coming trends and styles in your own home.
Click here or the sofa above to access blog.
By knowing the latest trends in home design, you can help sellers make informed decisions on much-needed room makeovers that can transform out-of-date listings into a neighborhood showpiece.
We hope to create a blog community where you can openly share your experiences, insider tips, and design questions and challenges. Also, be on the lookout for our ongoing contests that give you the opportunity to show off your home makeovers. We also encourage you to submit your home & design videos to REALTOR® TV and get them featured on this blog.
Want to be a guest blogger? Have questions about this blog? Please contact:
Melissa Tracey
“Styled, Staged & Sold”
REALTOR® Magazine
430 N. Michigan Ave.
Chicago, IL 60611-4087
E-mail: mtracey@realtor.org
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Architectural Coach: Countertops
As granite becomes almost ubiquitous, buyers are wowed by stylish Corian, quartz, and even cork.
Granite countertops may still impress some buyers, but true trendsetters will be on the lookout for kitchens that incorporate some of the hottest new materials. A countertop, backsplash, or floor in a dazzling material may be just what's needed to give a room a stylish kick and spur a sale.
Help educate home owners about the growing list of new possibilities, including the pros and cons of various materials. A trendy look carries a lot of weight, but durability, affordability, and sustainability also count.
We asked design experts about the hottest and freshest materials, and some old favorites, that can make a big impact in the kitchen. While some experts agreed, we found some differing opinions on each material's pros and cons. Because every buyer's style is different, urge clients to study materials up close and find the answers to these key questions:
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How durable is it?
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Will it stain or crack?
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Does it need to be sealed and resealed? How often?
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Is it eco-friendly?
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Does it come in slabs, tiles, or both?
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What surface is most suitable for this material?
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How much does it cost to buy, install, and maintain?
Another piece of advice from the experts: For the best overall look in a kitchen, never use a material as the only surface in a room. “Too much of any single material loses freshness,” says designer Mick de Giulio of DeGiulio Kitchens & Bath in Chicago and Wilmette, Ill.
Materials to Consider . . .
continued . . .
By Barbara Ballinger of Realtor Magazine
Unlock America's Economy
Support the National Association of Realtors Housing Stimulus Plan
Our nation is facing an unprecedented lack of liquidity throughout every sector of the economy. This has placed insurmountable barriers in the path of too many homeowners wishing to avoid foreclosure and save their home and home buyers wishing to take advantage of the low mortgage rate environment and realize the American dream of owning a home. The NATIONAL ASSOCIATION OF REALTORS® believes it is imperative that Congress take action and restore consumer confidence in homeownership. We are calling on Congress to enact measures that address foreclosures, stabilize housing and real estate, energize credit markets, restore bank lending capacity and revitalize the economy.
Download the PDF version> (PDF: 334K)
Unlock America's Economy homepage>
Make the $7500 first-time home buyer tax credit available to all buyers, eliminate the repayment requirements and extend the credit to December 31, 2009. In July 2008 Congress passed legislation creating a refundable tax credit for first-time home buyers. The $7500 credit is in effect for purchases between April 9, 2008 and July 1, 2009. Consumers have shown little interest in the credit, in large part because it is not available to all purchasers and because, unlike other credits, this tax credit must be repaid.
View NAR's First-Time Home buyer Tax Credit Survey Results>
Restore the FHA, Fannie Mae and Freddie Mac maximum loan limits to $729,750 and make them permanent. The economic stimulus loan limits for Freddie Mac, Fannie Mae and FHA expired on December 31, 2008. As a result, the maximum limit for Fannie Mae, Freddie Mac and FHA dropped from $729,750 to $625,500. Returning these limits to their 2008 levels and making them permanent will strengthen the availability of mortgage credit and expand mortgage affordability in a time when home sales and refinance activity are necessary to stabilize the housing market and move the broader economy towards recovery. This will also assure that a wide range of borrowers have access to fair and affordable mortgages.
Get Treasury's Troubled Asset Relief Program (TARP) back on track and target more funds to mortgage relief. Create a federal mortgage interest buy-down program to bring down interest rate spreads to historical averages and reduce mortgage interest rates. It is crucial that the government continue its actions to bring down interest rate spreads between mortgage and Treasury rates to historical norms which will significantly reduce mortgage interest rates. Recent actions by the Federal Reserve and the Treasury are making mortgage interest rates more affordable. Mortgage rates are near 50-year lows but the spread between mortgage rates and Treasury rates are abnormally high. If rates drop in line with historic trends, home sales could rise nationally by 10 to 15 percent and stabilize prices in many parts of the country. While this is a good boost, mortgages need to be more attainable. There continues to be continuing problems impeding the delivery of mortgage credit to home buyers and those trying to avoid foreclosure. The federal government must step in and address these problems.
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Existing-Home Sales Show Surprising Gain
Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors ® .
Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.
However, for all of 2008, there were about 4.9 million existing-home sales -- 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
Lawrence Yun, NAR chief economist, said home prices continue to fall in some areas.
“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”
Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.
Yun said the market is under performing and hurting the broader economy.
“We've added 25 million people to our population over the past decade and housing affordability conditions are the best we've seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”
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FHA Loans Become Hot Option
Based on less-stringent standards,
popularity rockets in the Capital Region
By CHRIS CHURCHILL , Business writer
First published in print: Friday, January 30, 2009
The use of mortgages insured by the Federal Housing Administration is soaring in the Capital Region, growth that comes as many home buyers are struggling to qualify for more traditional loans.
Many lenders, skittish as foreclosure and default rates rise, have discontinued mortgages for borrowers with less-than-perfect credit or little saved for a down payment.
Credit standards for FHA loans, by contrast, are more relaxed. And while many loans now require that borrowers put 20 percent down, FHA loans mandate just 3.5 percent.
"Most of the programs with minimal down payments have all gone away," said Lisa Fortin, a senior mortgage consultant at First Priority Mortgage, a RealtyUSA subsidiary in Clifton Park. "FHA is pretty much the only product still available."
First Priority says FHA loans grew from about 8 percent of mortgages it originated in 2007 to about 40 percent today. Other brokers and lenders in the Capital Region report similar upticks.
And national numbers show the same trend: The U.S. Department of Housing and Urban Development says FHA loans accounted for just 3.7 percent of all home loans in its 2006 fiscal year, when subprime and other mortgage products for lower-income buyers were widely available.
But by September, with the credit crunch taking hold, the percentage of home loans backed by the FHA was 21.1 percent, according to HUD. (September is the most recent month for which the agency has data.)
In raw numbers, the FHA backed 141,000 mortgages in September, about three time the number of a year earlier.
Observers say FHA loans have largely shed the stigma they once had as a loan of last resort for those with lower incomes or shaky credit.
Also, said Sandra Nardoci, president of the Greater Capital Association of Realtors Inc. and an agent at Prudential manor Homes in Latham, the FHA program "used to be a lot more cumbersome than it is today."
In a sense, the rising popularity of FHA loans during a widespread economic crisis is apt, because the program was created during the Great Depression in an attempt to boost stagnant real estate markets.
Today, the loans are available for as much as $292,100 in most of the Capital Region, or $373,950 for a two-unit property. Borrowers must also take out mortgage insurance — money that helps fund the program.
The FHA does not originate the loans. Instead, it insures them against default, making them a safer bet for lenders.
The loans, which are also available for refinancing, are widely used by first-time borrowers, including many who are now eager to take advantage of the drop in real estate prices in recent months.
"People who get into these mortgages are thrilled to death," said First Priority's Fortin. "It's a great way to get into a home." continued . . .
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Market Statistics as of February 1, 2009
This graph represents average sale versus list prices 
The average list and sale prices for the month of January 2009 show a typical winter plot in that prices are approximately where they were in January 2008 but lower than January 2007 coming off the high of the recent sellers' market.
However, the average asking price to sale price has dropped from
97.39% in December to
for
95.11%
January.
In a balanced market such as the one we now have, homes are affordable and the threat of a declining market is aliviated.This can provide an excellent buying opportunity due to reduced competition typically seen between Thanksgiving and March plus increased willingness on the part of sellers to negotiate based on their perception of a declining market.
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Mortgage Rates and Trends
The link to up to the minute New York State mortgage information seems to work better than presenting the actual graph.
Click for up to the minute mortgage rate information
Buyers' versus Sellers' Market Report
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The graph above shows the number of sales in a given month divided by the number of homes on the market in the four main counties of the Capital Region. After a brief dip into seller territory in July the market has once again returned to favor buyers.
January's sales figures show the strongest buyer's market in Capital Region history. Prices are the lowest in recent years and inventory is high. This may be the best time to buy, ever.
*This ratio can be used to determine whether we are in a buyers' or sellers' market as indicated in Dennis Maier's article on Market Timing featured in eZine Real Estate. In general, if it would (theoretically) take less than 6 1/2 months to sell the current inventory it's a sellers' market. If it would take more than 9 months to sell all the homes on the market it's a buyers' market.
Everything You Ever Wanted to Know About Real Estate Agents
The longer I work as a real estate broker , the more I am convinced that my profession should do a better job of educating the public about agents and brokers. Few home buyers and sellers seem to really understand how real estate agents work, or how to follow protocol, who pays us and why we do the things that we do. Ask what the public does know, and you'll hear all kinds of myths .
Because real estate agents can make or break your deal, you owe it yourself and to your financial future to understand how agents work. Do you know the difference between REALTORS® and real estate agents? Do you need an agent or would you be better off doing it all yourself? Which type of real estate agency might be best for you, dual or single? Should you sign with a buyer's broker ? Can you go to open houses and call other agents if an agent is e-mailing you listings? How are real estate agents paid and who pays them? What are the different types of listing agreements ? Find out the answers before you start looking for an agent to represent you.
About Finding and Hiring Real Estate Agents
I hate to admit this but I was once hired to sell a half-million dollar house simply because I was standing in the street, wearing my name badge and yakking on my cell. The seller spied me from her front porch and said, "Hey, you look like a real estate agent. I wanna sell my house!"
Speaks volumes about agents, doesn't it? She was lucky. I knew how to price her home. But I could have been Joe Blow from Kokomo (no offense to those from Indiana).
What few agents will acknowledge is the fact that more than half of the deals they get are because the agents are in the right place at the right time. Not because (cough, cough) they are competent. Here's how to find a competent agent and make sure you get the services you truly deserve:
continued . . .
by Elizabeth Weintraub , About.com
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Real Estate Horoscopes for 2009
Last year's real estate horoscopes were so popular that we decided to run them again. However, it must again be noted that more than astral predictions are needed for a successful real estate outlook.
The year of 2009 is going to be a bumpy ride. Are the stars aligned in your favor? Is the time right for home buying or home selling? Check out your personal horoscope to determine if you are headed into foreclosure or about to land the real estate deal of a lifetime. Your cosmic zodiac is ready to forecast your future in real estate and give you the answers you seek.
Aries (March 21 - April 20)
If your home is presently underwater, Aries, there is no better person to handle a short sale than yourself. In fact, you may be thanking your stars for that recall button on your phone as you dial that lender's number over and over. You are so organized that you don't even have to look up your loan number because it's committed to memory.
You have scrimped and saved for years to buy a home, Taurus, and every home you would consider buying has been priced too high. Rejoice in 2009 because you'll find no better time to realize your dream of becoming a first-time home buyer than in April. Interest rates are low and prices have been beaten into the ground.
Access the remainder of the Zodiac
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Archives
We've been asked to again include links to past market updates. But since our stories link to other web sites over which we have no control we only want to link to our most recent issues. Otherwise, the article links may fail to work as they once did.