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March, 2005 Newsletter

+++++++++++ March 2, 2005 +++++++++++++++++++

Introduction: Re-sales Steady, New Home Sales Stumble
Mortgage Rate Update: Rates Up Slightly in February
This Month's Tip: Home Owner's Associations

Introduction: Re-sales Steady, New Home Sales Stumble

Welcome to the March edition of the Home Buyer's
Newsletter, brought to you by the Home Buyer's Information Center.
The Home Buyer's Information Center

Existing-home sales, revised with improved methodology,
were essentially flat in January but remained at historically
high levels, according to the National Association of Realtors®.

Total existing-home sales, including single-family, townhomes,
condominiums and co-ops, slipped 0.1 percent in January to a
seasonally adjusted annual rate* of 6.80 million units from a level
of 6.81 million in December. Last month's sales activity was 13.7
percent above the 5.98 million-unit pace in January 2004.

David Lereah, NAR's chief economist, said January home sales
were buoyed by the condo sector. "A slight decline in single-family
home sales was offset by a record monthly level of condo sales,
which just came off its ninth consecutive record year," he said.

Lereah noted this is the first monthly report in the revised
existing-home sales series. "NAR took the initiative to update
and improve the modeling for the existing-home sales series
to more accurately reflect the growth and changes in the housing
market," he said.

The new home market took a surprise dip in the month of
January. Sales of new one-family houses in January 2005
were at a seasonally adjusted annual rate of 1,106,000,
according to estimates released February 28th by the U.S.
Census Bureau and the Department of Housing and Urban
Development. This is 9.2 percent below the
revised December rate of 1,218,000 and is 4.2 percent
below the January 2004 estimate of 1,155,000.

The median sales price of new houses sold in January
2005 was $199,400; the average sales price was $281,900.
The seasonally adjusted estimate of new houses for sale
at the end of January was 438,000. This represents a
supply of 4.7 months at the current sales rate.

Many analyists blamed the poor new home performance
on weather factors, so it remains to be seen whether this is a
temporary blip or a change in momentum. No real trend should
be relied on until at least the full first quarter activity numbers are


Mortgage Rate Update: Rates Up Slightly in February

After remaining fairly constant for the last couple of months,
mortgage interest rates were up slightly during the month of
February. According to mortgage company Freddie Mac,
30-year fixed-rate mortgages began the month at an average
interest rate of 5.69% after beginning the month at an average
of 5.63%. The trend for 15-year fixed rate mortgages was
similar, ending at an average of 5.22% after starting the month
averaging 5.14%. There have been numerous starts and stops
in the mortgage rate trend--up for a couple of weeks and then
back down for a couple more--so a few weeks of increases should
not necessarily be interpreted as a change in the trend.

For current average mortgage rates, see:
Mortgage Rates
For more information on mortgages, visit the Mortgage
Section at:


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This Month's Tip: Home Owner's Associations

Home Owner's Associations can either be lauded by some
home buyers ("the association is working to keep our property
values high!") or derided by others ("they try to control everything!")
but if you purchase a home that has one in place, the Home Owner's
Association will be an integral part of your home ownership

A Home Owner's Association exists both to administer rules and
regulations for the entire community as well as being responsible
for the maintenance and repair of common areas throughout the
community. In addition, the Home Owner's Association may be
responsible for exterior repair and maintenance on indidual units,
depended how the Association is structured and chartered.

Because they generally are built as seperate units in a larger
structure, virtually all condominium and townhouse communties
will have a Home Owner's Association. Since indiviudal units
will often be sharing walls, roofs and community assets, it is
important to have an association to maintain rules and
regulations. You can see discussions on these types of
communities on the site:
In addition, more and more single family homes are being built in
subdivisions that have chartered Home Owner's Associations. This
means that if you purchase a home in one of these neighborhoods,
membership in the Home Owner's Association will be mandatory and
you will be responsible for dues (monthly, quarterly or annually) and you
will be bound by the covenants, conditions and restrictions of the
association (commonly referred to as CCRs). What this means is that
there are specific rules and regulations for the community in a number
of areas--these rules may include something as mundane as who is
responsible for trimming the grass by the pool or as important as
determining the size, color and style of your home.

Depending on how the Home Owner's Association is structured,
it may have little more than a background effect on your ownership
or it can be a very high profile part of ownership. A Homeowner's
Association may, for example, determine if you can or cannot have a
pet, and if you can what type of pet is permissable. It may stipulate
what color your front door can be and how often it must be painted (and
who pays for the painting). And, because Home Owner's Associations
have special legal authorities, they can enforce these rules in a court
of law.

If you are planning in purchasing a home in a development that has a
Home Owner's Association, it is imperative that you know exactly what
those rules and regulations (the CCRs) are and, just as importantly,
be willing to live withing the boundries of these rules and regulations.
Once you have purchased the property, it is too late to decide that you
do not want to abide by the rules that have been established. You can
work to get them changed (any changes would have to be voted on by
the entire community) but until that time you are obliged to follow the
rules and regulations.

You will want to obtain a copy of the Home Owner's Association package
which should include:

1) A complete and detailed list of all the Covenants, conditions and
restrictions in effect in the communtity. You will need to know precisely
what the Home Owner's Association controls as well as your personal
responsibilities as an individual home owner.

2) The amounts of the Home Owner Assocation dues and fees and how
they will be paid. You will also need to know of any special assessments
(fees above and beyond the normal dues used to pay for community
repairs or maintenance--for example, paving the parking lot) for which
you will be responsible.

3) Specifics on what you, as a home owner, must pay for and what the
Home Owner's Association pays for. A couple of examples here might
be roof repair or replacement and exterior painting.

4) A copy of the most recent financial statement of the Home Owner's
Association so that you (or your accountant) can assess its financial
condition. When it comes to financial health, all Home Owner Associations
are definitely not created equal. Some may be awash in reserves (extra
cash on hand for repairs, maintenance or emergencies) while others may
be severely short in funds and need to assess home owners every time
there is an expense.

The last few years have seen enormous growth in the construction and
sale of condominiums, townhouses and planned communities with
Home Owner's Associations, so more and more buyers are being
confronted with--and need to be educated on--the workings of these
associations. As with most aspects of purchasing a home, it is far
wiser to be prepared up-front rather than being disappointed later.

On the site:
Home Owner's Associations

Next Month's Topic: Closing and Settlement


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
Home Buyer's Checklist

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:
Home Buyer's Information Center Feedback

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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