When Selling Your Home, Highlight What’s “Green”!

When you are selling your home, you don’t have to live like Ed Begley Jr. to trumpet the green and sustainable features of your home. In fact, it is highly beneficial to make sure your listing agent pays attention to these details. If your appliances are Energy Star rated, make sure the listing states this. How about those brand new Low-E windows? Mention them! If you have painted the walls with No or Low VOC paint, list it! If that shower head or toilet saves water, let potential buyers know.  Heck even leaving behind the CFL’s in the lighting fixtures is a plus to an eco-conscious buyer. Green is not just a passing fancy for homebuyers and the more green features you can show in your listing, the better chance you will attract the ever growing green consumer to come and take a look and potentially buy your home!

Western Mass Home Sales Almost Doubled Says Latest Numbers

The anticipated sunset on the $8000 first time homebuyer’s tax credit spurred a flurry of activity in the market and resulted in a near double of the number of homes sold in three Western Massachusetts counties in November.

The RAPV announced yesterday that home sales in Hampden, Hampshire and Franklin counties were up 97.9 percent for the month this year over the numbers in November of 2008. Last year 236 units closed. This year’s tally was 467.

Further good news indicated that sales prices increased as well, with the median price rising by $500 per unit, an increase of .3 percent over the same period in 2008.  This is significant because it is the first time this year that an increase in the number of units sold did not correlate with a decrease in the median price.

Clearly the fear of missing out on the tax credit had a lot to do with this bump, but this is another serious indicator of the market making a slow and steady recovery.

In November, Congress extended the original tax credit and expanded the program to include a $6,500 credit for homeowners who are buying a different home. First-time buyers are still eligible for $8,000. But in order to qualify for either, buyers need to be under contract by the end of April and have the deal closed within 60 days.

Broken Down By County

In Hampden County, sales were up 105.1 percent from 159 in November 2008 to 322 last month. The median price was up 3.2 percent from $165,000 to $170,000.

In Hampshire County, sales were up 95.3 percent from 43 in November 2008 to 84 last month. The median price was down 4 percent from $240,000 to $230,500.

In Franklin County, sales were up 79.4 percent from 34 in November 2008 to 61 last month. The median sales price was up 14.6 percent from $157,000 in November 2008 to $180,000 last month.

Good news for sellers was also revealed in the report. News broke that the inventory for homes that continue to languish on the market is dwindling.  Its down 13.5 percent from 3,012 at the close of November last year to 2,606 at the end of last month.

Houses are moving, prices are remaining reasonable and the government is helping hand homeowners the keys. Now is the time to get in to the buyer’s market or to list that house to get it sold.  Give me a call if you have any questions or you are ready to begin the process. Let me be your Real Estate Advocate!

jason@burkins.net
413.537.2838

Information used in this post comes from the RAPV and Masslive’s Article by Jim Kenney, 12.15.09

Non-Profit Think Tank Blames Suburban Growth For City Housing Problems

Housing problems in cities like Springfield, Holyoke, can be blamed on suburban growth, job loss, MassInc. report says

By Jim Kinney

November 14, 2009, 2:00PM

For people living in Holyoke’s poorer neighborhoods, moving up means moving out, whether they like it or not.

“When people did work their way up the economic ladder, there was no place for them to go in the neighborhood to buy a home,” said Kathleen G. Anderson director of planning and development for the city of Holyoke. “And these are exactly the kind of people you need to improve a neighborhood.”

Benjamin K. Forman, a senior research fellow at Massachusetts Institute for a New Commonwealth, said last week that housing problems in Springfield, Holyoke and similar cities across the state can be blamed in part on suburban growth and job loss.

But Massachusetts’ housing policy is too focused on providing affordable housing opportunities in Boston and its immediate suburbs where housing prices have skyrocketed so fast, he said. The poor have had no where to go, Forman said.

Peter A. Gagliardi, executive director of HAP Housing in Springfield, said grant money limits developers to building units only for the poor or the elderly. Developments that would include market-rate housing or commercial space don’t qualify. “We don’t have the tools,” Gagliardi said.

He released his report, “Going for Growth: Promoting Residential Reinvestment in Massachusetts Gateway Cities” last week. Often called MassInc., the institute is a Boston-based nonpartisan think tank that focuses on the state’s middle class. The complete report is available at no charge online at www.massinc.org. You must register to read it, however.

Forman has long studied the state’s struggling manufacturing centers, called “Gateway Cities”: Springfield, Holyoke, Pittsfield, Brockton, Fall River, Fitchburg, Haverhill, Lawrence, Lowell, New Bedford and Worcester.

Demand for housing in city neighborhoods has fallen so far that residential space in Springfield sells for $115 a square foot – that’s a dollar a square foot less than it costs to build, not counting land costs, Forman said. In Holyoke it’s a little better, selling for $122 a square foot versus a construction cost of $116. But that’s still not much of a profit margin, Forman said.

Gagliardi said that disparity is one of the things that keeps the Court Square project in downtown Springfield from getting off the ground. Hypothetical condominiums in the Court Square building could cost $300,000 a unit to build, but would only sell for $180,000.

“Once you are talking about market rate housing, people have the options,” he said.

The state doesn’t give communities the tools to subsidize a project and end up with market rate housing, he said. And market-rate housing is what Springfield and Holyoke need to bring people, business and money downtown.

Forman said those cities often use affordable housing money because it’s the only money available to rehabilitate properties in some of these neighborhoods. But those projects also concentrate poverty in neighborhoods and discourage commercial investment and job creation.

Part of the problem, Forman said, is that apartments last a long time and don’t go away just because no one wants to buy them. The supply of housing can’t react to a falling market like other markets do.

“Housing is real durable, so when demand for housing changes, it sets off a cycle of disinvestment, because the supply doesn’t contract,” Forman said.

He wants to see a state tax credit for the preservation of owner-occupied buildings. Forman would also like to expand employer-assisted home buying plans such as those run by Baystate Health and MassMutual Financial Group and more initiatives such as the Buy Springfield Now program. He’s also calling for more investment in the amenities that draw middle-class people to city neighborhoods such as parks and good schools.

Some cities help homeowners buy insurance against declining property values.

Public safety is also an issue. Forman said national studies show that for every violent crime, a city loses one college-educated resident.

“People with options want to live someplace safe,” he said. “That’s what a lot of this is about, making these communities places of choice, not places of last resort.”

Size Matters Less Today

We all know the trend over the last couple decades has been to build 3000 square foot McMansions with all the space and amenities you could want rather than smaller homes with solid basics.

But with the economy in shambles and a new buyer emphasis on sustainable, energy efficient living, the trend has shifted significantly over the course of the last few years. In fact, the average median square footage in new homes built within the past year has dropped for the first time in almost 15 years. Freshly built homes were 7% smaller in 2008, according to the U.S. Census Bureau.  Picture a large home with one less average sized bedroom.

Smaller homes are cheaper to build, much more energy efficient and have a smaller carbon footprint, for obvious reasons. Plus, they cost less to the consumer, many of whom are downsizing from larger homes or getting in to their first home.

The remodeling and retrofitting of existing small to medium sized homes is also trending upward. Rather than move up or build new, homeowners are opting to freshen up their current abode with quality upgrades.  For instance, formal dining spaces are becoming obsolete, as many homeowners expand out their gourmet kitchens or opt for great rooms and open floor plans over chopped up and formal spaces.

So whether its due to the economy or a shift in attitude or a combination of both, home owners are learning to live in smaller homes. Builders and other real estate professionals will need to adjust to meet this new trend or we will continue to have empty brand spanking new suburban palaces languishing on MLS.

The Newly Extended and Expanded Home Buyer Tax Credit

Late last week, President Barrack Obama signed a law that extends the $8,000 first time home buyer tax credit to the end of April 30, 2010.  It also introduced a brand new $6,500 credit to homebuyers who have lived in their current home for at least five years and are seeking to relocate.  Below are more specifics on the credits:

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

(Details of the plan provided by the National Association of Home Builders)

 

Springfield median home price falls 11 percent as sales increase 9.5 percent

Springfield median home price falls 11 percent as sales increase 9.5 percent

By The Republican Newsroom

September 29, 2009, 11:51PM

Associated PressThe Massachusetts Association of Realtors said Tuesday that sales of single-family homes in the state were up 0.4 percent in August, while the median selling price was down 3.1 percent

By JIM KINNEY

SPRINGFIELD – There were 680 single-family homes sold in the city of Springfield in the first eight months of 2009, a 9.5 percent increase from the 621 homes sold in the same time period of 2008.

But the median price paid for those homes fell 11.11 percent, from $135,000 in 2008 to $120,000 in 2009, according to statistics released Tuesday by The Warren Group, a Boston-based provider of real estate data.

“You are seeing both investors finding value now and first-time home buyers finding affordability,” said Robert P. Molta, president of Carlson GMAC Real Estate in Wilbraham and Chicopee.

But Molta said median prices won’t recover until unemployment improves and consumers feel more confident to spend money.

Low interest rates and the federal $8,000 tax credit for first-time home buyers is spurring demand for lower-priced homes, said Kevin M. Sears, owner and broker at Sears Real Estate in Springfield. Three-quarters of his clients in recent weeks have qualified for the credit.

But as the law stands now, that tax credit expires at the end of November. Realtors are warning that buyers should be in a purchase and sales agreement by Oct. 15 in order to make the deadline. Realtors are also lobbying for Congress to extend the program.

“Car sales fell in the wake of ‘Cash for Clunkers’,” Molta said. “I think that is the fear.”

Across the state, the number of single-family sales year-to-date through August fell 5.04 percent from 27,364 last year to 25,984. The median price fell 10.38 percent year-to-date from $318,000 to $285,000, also according to The Warren Group.

In Holyoke, as in Springfield, year-to-date sales through August increased while median prices fell. In Chicopee, Westfield and Palmer, sales and prices decreased. In Northampton, sales decreased while prices rose and in Greenfield, sales remained steady at 75 while the median prices rose 2.86 percent.

The Massachusetts Association of Realtors, which uses only transactions that go through a Realtor in calculating its statistics, said Tuesday that sales of single-family homes were up 0.4 percent in August, from 4,039 in August 2008 to 4,055 in August 2009. The median selling price was down 3.1 percent from $325,000 to $315,000.

Sears, who is also the president-elect of the Massachusetts Association of Realtors, said pending sales also increased 6 percent in August from 4,295 in August 2008 to 4,570 last month. Statewide inventory is also down for the sixth month in a row. The number of sales has been going up for months and staying even with last August can be seen as an achievement given the recession.

Sisters Are Doing It For Themselves.

Just a quick fact for the day: It may surprise you, but the fastest growing group of homebuyers in the country is single women. The National Association of Realtors reports that one in five homebuyers were single women. They are buying homes in greater numbers than single men by a 21% to 9% margin.

Revamped Obama Mortgage Relief Program to be Floated Soon.

(Updates with more details and context about Hope for Homeowners) By Jessica Holzer Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)–The revamped Hope for Homeowners program is likely to be rolled out soon without an adequate solution to a major problem: How to extinguish second mortgages for borrowers facing foreclosure. As a result, the program, which so far has helped only 95 borrowers refinance into government-backed mortgages, could continue to struggle to gain traction, despite several key improvements.

The Department of Housing and Urban Development has been in talks for months with large national banks and their regulators on the size of payments necessary to induce the banks to relinquish the second liens. But the negotiations have reached an impasse, with banks insisting on a higher level of compensation than the government is willing to pay, people familiar with the discussions say. Separately, the problem of second liens is also bedeviling the administration’s efforts to encourage loan modifications and short sales. The deadlock could overshadow several improvements HUD is making to Hope for Homeowners, which is the only federal effort geared toward homeowners who are deeply underwater on their mortgages. More than 16 million homeowners were upside down on their mortgages at the end of the second quarter of 2009, representing nearly one-third of all homeowners with a first mortgage, according to Moody’s Economy.com.

Lenders must agree to extinguish a second mortgage before borrowers can refinance their first mortgage under the program. As many as half of seriously delinquent borrowers have a second mortgage, such as a home equity or down payment loan, according to analyst estimates. “We appreciate the fact that there will be some second lien holders that won’t go for this,” a senior HUD official told Dow Jones Newswires. “And the program isn’t for everyone. But it will serve a substantial niche [of borrowers].” The program may work for borrowers who don’t have a second mortgage, as well as those who are so underwater that the second-lien holder has little hope of recovering anything, the HUD official said. The Obama administration inherited Hope for Homeowners, which was conceived by congressional Democrats and enacted last year as part of sprawling housing legislation.

Administration officials have worked to iron out kinks in the program, but the bulk of their efforts has gone to ensuring the success of their own initiative – a program to provide millions of homeowners with government loan modifications. HUD will soon roll out a retooled version of Hope for Homeowners intended to bring the incentives more in line with those provided under the loan modification program. Payments for extinguishing second mortgages may even be more generous than under the loan modification. HUD officials are also making sure Hope for Homeowners loans can be packaged and sold into the secondary market so that the program’s rates are comparable with general mortgage rates. However, the cooperation of mortgage servicers, who are gatekeepers to the administration’s foreclosure prevention programs, will be crucial. Servicers, already swamped by queries from strapped borrowers, must have the patience to pursue a refinance under Hope for Homeowners, which requires far more work than a loan modification under the Obama program.

The largest servicers – JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Bank of America (BAC) – are also the largest holders of second mortgages, giving rise to concerns they may not act in borrowers’ best interest. Banks may be reluctant to extinguish second mortgages if it means they will be required to immediately write off the mortgage. Mortgage investors – many of whom are intensely interested in Hope for Homeowners and favor it over the government loan modification program – are deeply skeptical that servicers will play along. Laurie Goodman, a senior managing director of Amherst Securities Group, called the second-line problem “intractable” in a recent research note to clients. She believes Hope for Homeowners won’t be used extensively for loans that have been packaged and sold into private-label securities. However, just 36% of all non-performing mortgages in private label securities had second liens taken out with the first, she noted. A JPMorgan spokeswoman declined to comment. Spokesmen for Wells Fargo and Bank of America didn’t return calls requesting comment.

If Hope for Homeowners flops a second time, deeply underwater borrowers who qualify can always get their interest rates cut temporarily, to as low as 2%, through the government’s loan modification program. But over the long term, these people will have difficulty refinancing or selling their home, Andrew Jakabovics, associate director for housing and economics at the Center for American Progress, said. “You may end up with a lot more people trapped in their mortgages,” he said. Under Hope for Homeowners, qualified borrowers can refinance into a new, government-backed loan that matches the current value of their home, as long as the investor in the prior mortgage agrees to write off a portion of the debt. By contrast, people familiar with the program say servicers typically aren’t forgiving loan principal as part of the government loan modification effort. Glenn Boyd, head of U.S. Asset-Backed Securitization Research for Barclays Capital, said mortgage servicers will ultimately need to agree to substantial principal forgiveness in order to bring down default rates. “Simply having your mortgage rate reduced won’t be sufficient for many of these borrowers who are significantly underwater,” he said.

-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@dowjones.com