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September, 2009 Newsletter

+++++++++++ September 1, 2009 +++++++++++++++++++

CONTENTS:
Introduction: Another Sales Spike But Prices Down
Mortgage Rate Update: Rates COntinue to Ease
This Month's Tip: Don't Forget Resale

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Introduction: Another Sales Spike But Prices Down

Existing-home sales – including single-family, townhomes,
condominiums and co-ops – rose 7.2 percent to a seasonally
adjusted annual rate of 5.24 million units in July from a
level of 4.89 million in June, and are 5.0 percent above the
4.99 million-unit pace in July 2008. The last time sales rose
for four consecutive months was in June 2004, and the last time
sales were higher than a year earlier was November 2005.

Lawrence Yun, NAR chief economist, said he is encouraged. “The
housing market has decisively turned for the better. A
combination of first-time buyers taking advantage of the housing
stimulus tax credit and greatly improved affordability conditions
are contributing to higher sales,” he said.

Total housing inventory at the end of July rose 7.3 percent to
4.09 million existing homes available for sale, which represents a
9.4-month supply at the current sales pace, which was unchanged from
June because of the strong sales gain. Raw inventory totals are
10.6 percent lower than a year ago when the number of unsold homes
was at a record.

The national median existing-home price for all housing types was
$178,400 in July, which is 15.1 percent lower than July 2008.

In new sales there were also month-to-month increases in activity but
decreases from a year ago. Sales of new one-family houses in July 2009
were at a seasonally adjusted annual rate of 433,000, according to
estimates released jointly August 26th by the U.S. Census Bureau and
the Department of Housing and Urban Development. This is 9.6
percent (±13.4%) above the revised June rate of 395,000, but is 13.4
percent (±12.9%) below the July 2008 estimate of 500,000.
The median sales price of new houses sold in July 2009 was $210,100;
the average sales price was $269,200. The seasonally adjusted estimate
of new houses for sale at the end of July was 271,000. This represents
a supply of 7.5 months at the current sales rate.

There are several pieces of good news in these reports. The decline
in sales actvitydefinitely has stopped for at least the last several
months. In addition, total inventory in both resale and new homes
is slowly declining. Finally, prices are still dropping (good news
for buyers) but there is a good deal of analysis that points to a potential
bottom--whether temporary or more permanent--in the current environment.


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Mortgage Rate Update: Rates Continue to Ease

Although there was some movement up and down during the month of
August, overall mortgage rates declined during the period. 30-year
fixed-rate mortgages averaged 5.14% during the final period of the
month after beginning with an average of 5.25% according to mortgage
company Freddie Mac. 15-year fixed-rate loans averaged 4.58% after
beginning the month at an average of 4.68%. If the economy truly
is beginning to turn the corner, as many analysts think, the days
of super-low rates may be drawing to a close.

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: Don't Forget Resale

Since it appears taht the Real Estate market is beginnng
the process of some stabilization, now is probably a good time
for a discussion on the subject of buying for resale.
Although your first focus should be on finding a home that
is a good match for your wants and needs today, it is the
wise purchaser who does not forget that future wants and
needs--and those of a buyer down the road--needs to be an
important consideration.

When you buy a home there are but a few certainties--
real estate taxes, homeowners' insurance and the fact that
someday the home will need to be sold. The sale of your
home may occur a few years or many years in the future,
but sooner or later the home you buy will be back on the
market. One of your major considerations then, when you
BUY a home is an awareness of its eventual sale. A mistake
made in the buying process is a potential time bomb that
doesn't get activited until resale time. And it can be a
very expensive one.

Much of the consideration concerning resale has to do with
the length of time you plan to be in the home. The shorter
your expected ownership time, the more concerned you must be
with resale factors. The longer your expected occupancy, the
more leeway you will have with these factors (but only
because normal price appreciation will ease the pain--a
mistake when you buy a home will still cost you money!)

One important consideration is the fact that there are always
times of market variances--when some real estate markets are
active ("hot markets") and others not nearly so ("cold
markets"). It is important to remember that the most recent
market conditions (the year 1999 and thus far in the year 2000)
are by no means normal. Don't be deluded into thinking
that since many homes in today's market sell within days--and
sometimes hours--of being listed, that this is the norm. An
average market (as we saw less than 4 years ago) means that
most homes (even the most desirable) generally are on the market
in the 90 day range. In slower markets (such as the early 1990's
in most of the U.S. and Canada), market times of 6 months are
not at all unusual (again, for desirable homes) and a specialized
home in such a slow market can take a year, or more, to sell.

To have a home that has good resale potential, you must consider
a few traits common to homes that are easy to sell and avoid
those that are often present in homes that are difficult to sell.
In this scenario, more positive features equal more potential
buyers for the home. Homes with more negative features tend to
eliminate potential buyers.

POSITIVE FEATURES: What Makes a House Easy To Sell

Location
You've probably heard "location, location, location" in response
to the question "what are the 3 most important factors in Real
Estate?" Homes that fit this description are located not only
in desirable (meaning well-kept and visually attractive) areas
but also neighborhoods that are convenient to necessary services
such as schools, shopping and employment centers. Being 40 miles
from the city center may be just what you want, but future buyers
may have little or no desire to deal with long commute times or
having long distances to drive to reach needed services. In fact,
many areas of the U.S. and Canada have seen trends back toward
central city areas as buyers seek to avoid long hours behind the
wheel.

Stability
In general, a neighborhood that has shown a history of stability
over the years will usually be more desirable than those that have
shown swings--either up or down--in desirability (and value). The
"hot area" of today can quickly lose its appeal when buyers become
fickle or decide that the premium in price to live there is just
not worth it. Other areas can become desirable, then
undesirable and back to desirable again, all in the matter of a
decade or less. When buying in these areas, you run the risk
of getting caught trying to sell in a downward swing. You will
likely do much better by purchasing in a more stable area.

Pricing
You've probably heard this adage before, but it bears repeating:
Buy homes that are priced at the median (or less) of the
surrounding neighborhood. The average market value of the area
will help to maintain your property value as well as make it
more desirable to those buyers who have heard the same adage!

Adaptability
Often times, the easiest homes to sell are those that are very
adaptable, since they will appeal to a wider range of
potential buyers. For example, it is better to have a room in the
home that would work as either a den/home office OR a bedroom
rather than one that would only work for a single purpose. Space
for future expansion, if needed, can also enhance a home's
appeal.


NEGATIVE FEATURES: What Makes a House Hard to Sell

Over-personalization
Everyone wants to make their home as comfortable and appealing
to their own tastes a possible, but it is easy to go overboard
here. This applies both to style (which is almost impossible
to correct at resale time) and decorating (which can be
neutralized if you throw enough money at it). Here, moderation
is best for future resale value.

Too large or too expensive for the area
A home that is "out of whack" with the surrounding neighborhood
will almost always be difficult to sell. You may feel like the
Lord of the Manor when you live there, but most buyers would
prefer to buy in an area where the surrounding homes are more
similar to their own.

Amenities
Extra money spent for expensive amenities is rarely recouped,
meaning that you will either have to sell the house for less
money than you planned or, if you insist on getting a return
on your investment from the amenities, you will limit your
potential market appreciably, since the home will likely be
priced higher than those in will be in competition with.

Isolated
Your desire to live "in the middle of nowhere" may be perfect
for your needs, but consider the fact that the majority of buyers
will prefer to live in a community rather than in isolation. Yes,
there always WILL be a buyer who has the same tastes as you do,
but locating them may be like finding a needle in YOUR haystack.

SUMMING UP. It is actually quite simple. What makes a good house
to SELL almost always makes the best house to BUY.


Next Month's Tip: Don't Overextend Yourself

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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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