July Real Estate Update
Rates Ticking Up
In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 5.42 percent for the week ending June 25, 2009, up from the previous week when it averaged 5.38 percent.
Last year at this time, the 30-year fixed-rate mortgage averaged 6.45 percent. "Mixed economic reports on the state of the housing market helped hold mortgage rates fairly flat," said Frank Nothaft, Freddie Mac vice president and chief economist. Existing home sales rose for the second consecutive month in May by 2.4 percent, slightly less than the market consensus forecast.
Source: Realty Times
U.S. averages as of June 25, 2009:
30 yr. fixed: 5.42%
15 yr. fixed: 4.87%
1 yr. adj: 5.27%
Responding to Appraisals That Miss The Mark
What can be done if a home appraisal comes in dramatically lower than the agreed-upon sale price?
Lenders will consider an appeal, but sellers must provide them with evidence. Start by examining the appraisal carefully for errors. If the appraiser missed one of the bathrooms, miscalculated the square footage, or didn’t note the garage, the seller has grounds for an appeal. Furthermore, look at the comparables: Is the home used as a comparison in a different and more challenged school district? Is the comparable next door to something undesirable?
If possible, pull some more realistic comps.
Existing-Home Sales Continue to Rise
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April. Sales remained 3.6 percent below the 4.95 million-unit pace in May 2008.
Lawrence Yun, NAR chief economist, expected an improvement in sales. "Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates," Yun says. "First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. "
How To Find Cash In a Second Home
Second homes are a tougher sell during an economic slump when people are reluctant to buy first homes. Owners who discover their vacation homes have become a financial burden can find ways to generate income from their properties, say real estate professionals with experience in making second homes pay off.
Here are some of their suggestions:
1. An owner can rent out a property for two weeks without paying taxes on the income. If there is an annual cultural activity, like a film festival, it can provide a good opportunity to make significant money.
2. Concentrate on renting properties profitably. An effective do-it-yourself Internet rental campaign can cost less than $500 and yield thousands in return. One option is to put an ad on VRBO.com which is the Web site for Vacation Rentals by Owner.
3. Donate a week or two stay at your vacation home to charity and then take a tax deduction for the gift. VacationHomesforCharity.com will help identify the right value.
4. Donate the whole property to charity. The owner can maintain a life estate which is the right to live in the house until death.
5. Appeal property taxes. Municipalities are recognizing that some assessments are out of whack and will adjust them.
Rich Ferretti, Broker/Realtor
500 W. John Street
Matthews, NC 28105
July 2009 Real Estate Update
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