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March, 2010 Newsletter

+++++++++++ March 1, 2010 +++++++++++++++++++

CONTENTS:
Introduction: Both New and Existing Sales Drop
Mortgage Rate Update: Rates See-Saw
This Month's Tip: You Need To Have Vision
++++++++++++++++++++++++++++++++++++++++++++

Introduction: Both New and Existing Sales Drop

Welcome to the March, 2010 edition of the Home Buyer's Newsletter.
As we head into the spring selling season, the sales results
for the month of January were not encouraging. Both new and
existing home sales declined from prior periods.

Existing-home sales fell in January but are above year-ago
levels, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes,
condominiums and co-ops – dropped 7.2 percent to a seasonally
adjusted annual rate of 5.05 million units in January from a
revised 5.44 million in December, but remain 11.5 percent
above the 4.53 million-unit level in January 2009.

Lawrence Yun, NAR chief economist, said there is still some
delay between shopping and closing that affected current sales.
“Most of the completed deals in January were based on contracts
in November and December. People who got into the market after
the home buyer tax credit was extended in November have only
recently started to offer contracts, so it will take a couple
months to close those sales,” he said. “Still, the latest monthly
sales decline is not encouraging, and raises concern about the
strength of a recovery.”

In new home activity, sales of new single-family houses in
January 2010 were at a seasonally adjusted annual rate of
309,000, according to estimates released jointly on February
24th by the U.S. Census Bureau and the Department of Housing
and Urban Development. This is 11.2 percent (±14.0%) below
the revised December rate of 348,000 and is 6.1 percent
(±15.1%) below the January 2009 estimate of 329,000.

The median sales price of new houses sold in January 2010
was $203,500; the average sales price was $254,500. The
seasonally adjusted estimate of new houses for sale at the
end of January was 234,000. This represents a supply of 9.1
months at the current sales rate.

Although sales have made fairly significant forward movements
in the last couple of months, the declines in January, coupled
with still extensive inventory levels, means keeping a close
watch on the market is prudent for any potential home buyer.


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Mortgage Rate Update: Rates See-Saw

February saw rates see-saw through the month, ending very near
where they started. According to mortgage company Freddie Mac,
30-year fixed-rate mortgages averaged 5.05% in the period that
ended February 26th. This was after beginning the month at an
average of 5.01% and dipping as low as 4.93% mid-month. 15-year
fixed-rate mortgages performed similarly, ending the month at an
average of 4.40% after beginning February at the same average of
4.40%

As we have mentioned frequently in the past, these minor up-and-down
movements in the market are to be expected in an economy that shows
no clear direction. More important for a home buyer is to get
their finances in order, and be on the lookout for acceptable
and well-priced properties so they can be ready to make the move,
virtually at a moment's notice.

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: You Need To Have Vision

If one were to make comparisons between home buyers who made
the best deals and those who made deals not nearly as good,
one aspect would stand out: Those who had "vision" when comparing
homes frequently made the better deals.

What do we mean when we say "vision"? Those who have vision are
able to see past minor (and addressable) issues in a home and
see a path to personalizing (or improving) the property. Those
without this vision find themselves constantly looking for the
"perfect" house, bypassing many properties that could be
acceptable with just a few modifications. Due to a number of
factors, buying the perfect home is often a good deal more
expensive.

Although some buyers have this vision naturally, others need to
spend some time developing it. The first part of your "vision
training" is to understand that there is a difference between
those items that you CAN change about a property and those that
you CAN'T change without a great deal of time, effort and expense.
For example, a 2 bedroom home will not morph into a 4 bedroom one
easily unless an addition is built, which would add considerably
to the cost of the home. Likewise, although bathrooms can be
added to an existing home, this is frequently an expensive project
and may mean loss of existing amenities, like a large closet.

Things that can be changed, on the other hand, often look more
formidable than they actually are. Interior decoration is a
good example here--you walk into a home and the wall and trim
colors are positively hideous. The buyer with no vision will
turn their nose up and immediatly eliminate the property from
contention. The buyer with vision will realize that paint and
painting are relatively inexpensive and can "see" the house in
colors that they would be happy with. In many areas, the interior
of a home can be painted for less than $2000, changing much of
its look completely. If you would want to tackle the work
yourself, the total investment would probably be less than $300.

Some other examples where having vision can translate into big
savings:

+ Exterior landscaping that needs attention
+ Windows that need replaced (this often can be done for less
than $200 per window, labor included)
+ Carpeting that is not acceptable due to color or condition
+ Appliances

Since many buyers will eliminate homes with these "problems"
out of hand, there will be much less competition for them,
meaning your negotiation position will be much stronger.
In addition, many times the sellers know there are issues
and may be receptive to allowances toward fixing them. This
frequently translates to a better deal for the buyer.

Next Month's Tip: What Type of Housing is Best for You?
++++++++++++++++++++++++++++++++++++++++++++++

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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