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August, 2010 Newsletter

+++++++++++ August 1, 2010 +++++++++++++++++++

CONTENTS:
Introduction: Resales Slip, New Sales Rise
Mortgage Rate Update: Rates Continue to Drop
This Month's Tip: Finding the Right Location
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Introduction: Resales Slip, New Sales Rise

Welcome to the August edition of the Home Buyer's Newsletter. In June, sales
moved in both directions: Existing home sales dropped while new home sales
rose.

With the scheduled closing deadline for the home buyer tax credits, existing-home
sales slowed in June but remained at relatively elevated levels, according to the
National Association of Realtors®.

Existing-home sales1, which are completed transactions that include single-family,
townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally adjusted annual
rate of 5.37 million units in June from 5.66 million in May, but are 9.8 percent higher
than the 4.89 million-unit pace in June 2009.

Lawrence Yun, NAR chief economist, said the market shows uncharacteristic yet
understandable swings as buyers responded to the tax credits. “June home sales
still reflect a tax credit impact with some sales not closed due to delays,
which will show up in the next two months,” he said.

“Broadly speaking, sales closed after the home buyer tax credit will be significantly
lower compared to the credit-induced spring surge. Only when jobs are created at a
sufficient pace will home sales return to sustainable healthy levels.”

In new homes, sales of new single-family houses in June 2010 were at a seasonally adjusted
annual rate of 330,000, according to estimates released jointly on July 26th by the U.S.
Census Bureau and the Department of Housing and Urban Development. This is 23.6 percent
(±15.3%) above the revised May rate of 267,000, but is 16.7 percent (±10.9%) below the June 2009
estimate of 396,000.

The median sales price of new houses sold in June 2010 was $213,400; the average sales price
was $242,900. The seasonally adjusted estimate of new houses for sale at the end of June was
210,000. This represents a supply of 7.6 months at the current sales rate.

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Mortgage Rate Update: Mortgage Rates COntinue to Drop

Long-term mortagage rates continued to drop in the month of July. According to mortgage
company Freddie Mac, 30-year fixed-rate mortgages averaged 4.54% for the period ending July
29th. The average at the beginning of the month was 4.58%. For 15-year fixed-rate mortgages,
the average fell from 4.04% at the beginning of the month to 4.00% at the end, an historical
record.

I was just reviewing some old memorabilia from my parents and found their mortgage dated
July, 1954. For a 20-year mortgage, their rate was 4.50%. These are rates that for over
50 years, experts said we would never see again. Not only have we seen them, we have in
some areas seen rates lower than over a half-century ago. Coupling unbelievably low rates
with prices that have tanked in some areas could mean a bonanza for buyers who are in
the market today. Our tip for August, "Reverse Mania," will discuss how far the pendulum
has swung in the last 2 years.

For current average mortgage rates, see the
rates page.

For more information on mortgages, visit the
Mortgage Section
++++++++++++++++++++++++++++++++++++++++++++++

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++++++++++++++++++++++++++++++++++++++++++++++

This Month's Tip; Finding the Right Location

The old adage about Real Estate is "what determines value" and the
answer is "three things. Location, location and location." Although
that saying has been around for decades, it still rings true today.

Before you can think about decorating or landscaping, before you even
think about a specific house, you will probably need to consider, compare
and choose a neighborhood. Since so much is dependent on the choice of
where you want to live--not the least of which is future resale value--
it is a decision you'll not want to take lightly.

Choosing a neighborhood means determining and comparing a number of factors
and amenities, including:

+ Schools
+ Proximity to shopping and services
+ Available recreation
+ Traffic patterns
+ Health care
+ Future development

Some of these factors will have more emphasis than others, depending on your
personal situation. Parents, for example, will most likely be most concerned
with the issue of schools. An active couple may put emphasis on the types
and extent of recreation that is available. Older buyers may have concerns
regarding access to hospitals and health care. Your first step in choosing
a neighborhood should be an assessment of which of these factors--or others--
are the most important to you.

Schools

Due to a number of factors including tax rates, expenditures, physical school
facilities and more, the quality of school districts can vary greatly. Even
within a particular school district, there can be considerable difference
between the highest rated school and the lowest. All things being equal,
most parents will want to gravitate to neighborhoods that offer the best
schools but are within their price range.

Proximity to shopping and services

This is not automatically a positive. Although many home buyers will prefer
to be close to a wide variety of shopping availability, others will prefer
to be further away from extensive shopping areas, largely due to the next
variable.

Traffic patterns

Some of us are not that bothered by traffic (otherwise 90 minute commutes
would not exist). For others, though, traffic simply drives them bonkers.
Obviously, if you are one of the traffic-adverse, this factor will have
a pretty big impact on your selection of a neighborhood.

Health Care

Although all of us, given our druthers, would probably prefer easy access
to health care facilities, as we age this factor increases in importance.
Not only for the convenience of, for example, doctor's offices and
clinics, but also for the proximity of emergency health care.

Future development

If a neighborhood is an area that is near future development, this is a
factor that can be perceived either as a positive or a negative, depending
on your outlook. Positive if the future development trends bring added
services or add to your resale. Negative if the future development causes
congestion, overtaxes existing services or lowers resale values.

Summing Up

To make the most of your neighborhood decision, determine the factor or
factors that are of the most importance to you, then make the comparisons
you need to make an informed decision. Your Real Estate Agent, with data
and information at their disposal, should be able to assist you with these
comparisons. It is a good idea to make your comparisons before you begin
to look at individual homes. This will save you from "falling in love" with a house
that is in the wrong location for your needs.

Next Month's Tip: Reverse Mania

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The Home Buying Checklist

Many of our visitors have said that one of the most valuable
aspects of the Home Buyer's Information Center is the
Buying Checklist, where they can make sure that all
the bases have been touched.
You can find the checklist
here
.

As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
drop us a quick line
here.

A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.

Have a great month and good luck in all your endeavors!

The Team at the Home Buyer's Information Center

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