This Month in Real Estate
March 2010
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Commentary
As the market continues to show shoots of recovery, experts believe that the roots will continue to grow. In his annual letter to the shareholders of Berkshire Hathaway, Warren Buffett said, “Within a year or so, residential housing problems should largely be behind us.”
After a steep run-up in prices during the first half of the decade, home values have readjusted back to normalized levels. Fixed mortgage rates are sitting near record lows and the number of homes available for sale is providing home buyers with more options. Also encouraging are indications that the high end of the housing market could begin moving again as luxury financing becomes more readily available.
Despite high unemployment and looming foreclosures, experts maintain their expectations that the economy will grow in 2010, while the government carries on its search for solutions to help both troubled homeowners and the unemployed.
The Housing Market
Existing Home Sales
Existing home sales slowed in January. According to Lawrence Yun, NAR chief economist, this is mainly due to the lack of urgency with the extension and expansion of the first-time buyer tax credit in November. January sales of 5.05 million remain 12 percent above the 4.53 million-unit level last year.
Median Home Price
Existing-home price was $164,700 in January, 3.4 percent below December and unchanged from January 2009. Distressed homes, which accounted for 38 percent of sales last month, continue to skew prices downward as they typically are discounted in comparison with traditional homes.
Inventory
The supply of homes continued to shrink, falling 0.5 percent to 3.27 million, representing a 7.8-month supply at the current sales pace. Compared to a year ago, there are now 10 percent fewer homes on the market. This is the lowest level of competing homes on the market since March 2006.
Mortgage Rates
Mortgage rates edged above the 5 percent threshold during the week of February 25, but remained near historically low levels. As the Federal Reserve mortgage-backed securities purchase program is scheduled to run out at the end of March, the Fed has held the door open to extending it if the economy weakens.
Affordability
Affordability remains at record levels, supported by the lowest mortgage rates in decades, low home prices, as well as the first-time buyer tax credit. So far this year, the home price-to-income ratio has fallen well below the historical average of 25 percent. The ratio now stands at 14.1 percent.
Government Action

Jumbo Mortgages Begin to Thaw
The cost of jumbo loans, often used to purchase luxury homes, shot up during the financial crisis because lenders steered clear of anything that could be considered somewhat risky. Plus jumbo loans are too large for the government to support through the Federal Housing Administration, Fannie Mae, or Freddie Mac.
The good news: The jumbo loan markets are beginning to unfreeze and return to normal.
The difference between interest rates on conventional loans and jumbo loans has decreased from higher levels seen last year.
In some cases, the down payment requirements are easing as well, but they often still depend on the level of borrowing – the more the mortgage, the higher the down payment percentage. In New York, mortgage professionals report the following common down payments:
Borrowers will still need a good credit score, typically at least 700, evidence of high income, and a sizable bank account.
Topics For Buyers & Sellers
2009 Tax Tips
Tax time is coming up. Don’t forget about the following benefits in 2009 for homeowners. What’s deductable in itemized deductions for homeowners?
1. Mortgage Interest
2. Points - paid at closing if you purchased or possibly if you refinanced this year
3. Mortgage Insurance Premiums
4. Property Tax
5. Energy Efficiency Credits - see IRS Form 5695 for qualifying projects
San Antonio Board of Realtors posted these stats on Feb 15th:
San Antonio, TX – February 15, 2010 - According to the January 2010 Multiple Listing Service report
by the San Antonio Board of REALTORS® (SABOR), the number of single-family residential sales
was 834, similar to the number of sales in January one year ago which was 836. The average price and
median price were down by 6% when compared to January
2009.
January 2010 Statistics
834 – Total number of sales for 2010, a
0% change compared to January 2009.
$175,065 – Average price for single family
homes in January 2010, a 6%
decrease compared to 2009.
$139,700 – Median price for single family
homes in January 2010, a 6%
decrease compared to 2009.
1,151 – Pending Sales for January 2010, a
3.5% increase from January 2009
Tell Everyone! The state has just released millions of dollars to help teachers, fire fighters and police officers buy homes. Qualifying buyers can receive 3% of the sales price towards the closing costs or down payment of the home. The interest rate for this program is 5.25%.
This program has not been funded for over a year and I am so happy it is back. Buyers will still need to come to the table with some money on an FHA loan but if sellers contribute some to closing costs, it can bring the buyers expenses to a minimum. If the buyer uses a USDA loan (100%) down, the amount needed in addition to the bond is minimized further. If you know someone who is interested in this program, please have them call us right away. The money will not last long as it is “first come, first served”.
This week there are 5 Good Neighbor Next Door home offered in San Antonio. This week one home is in South San ISD, 2 are in Northside ISD, and 2 are in JUDSON ISD.
GNND homes are HUD Foreclosures which are offered to teachers, firefighters and police officers and are announced and available 5 days before they go on the general MLS as a HUD foreclosures for sale. The GNND system is basically a lottery. Qualifying, winning teachers, firefighters and police officers can purchase these homes at HALF PRICE if they live in the homes for 3 years.
Each week, the homes are announced on Saturday and entries for the lottery are due by midnight on Wednesday of the following week. The winner, if any is announced on Thursday morning. All entries are for "full price".
When someone wins, the lender (following the GNNI guidelines) essentially sets up to half price loans. One loan has all closing costs and commissions rolled into the loan (if HUD is giving a house at half price, they aren't going to pay any commissions or closing costs in addition to that). For example on a home that is priced at $100,000, there would be two $50,000 loans set up. One loan can have closing costs and commissions added in if the buyer wishes. This is great because the buyer doesn't have to bring those funds in cash, they are part of the loan. Many of these homes are currently also available for the FHA $100 downpayment programs as well. This means that the buyer has very low out of pocket cash needs for the purchased.
Once purchased, the buyer makes payments on the loan which has closing costs added in. The other loan is acting as, what I call, a "shadow loan". There are no payments made on the "shadow loan". Once the buyer lives in the home for 3 years, the "shadow loan" completely goes away.
The program was designed to get professionals who work in "revitalization areas" to live in the areas they serve. GNND homes are in "revitalization areas" and this program is only offered for "first time home buyers", people who haven't owned a home in 3 years. If you or someone you know is interested in GNND homes, have them call me at 210-844-6004.
According to the MLS, there are 10828 active single family homes on the market. That means there are 10828 homes for sale in the San Antonio and Surrounding Areas. That doesn't sound like many but 5052 homes in all price ranges and areas sold in the last 4 months. That means that an average of 1265 homes are selling each month. To all of those Home Sellers who say homes aren't selling------they are. We do have a 8.5 month inventory of homes. In plain English we could say that it would take 8.5 months to sell all of the homes on the market if no new houses came on the market.
Typically, a seller's market has a 5-6 month inventory or less. We are higher than that but we could be higher.
Here is the problem I see. I am in and out of homes every day and I am evaluating homes and prices every day. Many of those 10828 homes will never sell because they are priced too high for the market. Buyers are looking for value and they pick the homes with the best value----the most features and the best condition for the price. It behooves sellers to have their homes in top condition and price the home ahead of the market. They then have the best chance to be the home in their area that gets to sell.
I am a San Antonio Real Estate agent who constantly works on staying postive.
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