The Fed drops rates and mortgage rates move higher. Why????

The Fed lowers rates to spur economic activity, which is inflationary. An expanding economy has inflationary tendencies. Inflation erodes the value of money received in the future, therefore bond holders demand a higher yield whenever inflation is a concern – pushing mortgage rates up.

Rates are still around 6.5% which is great. Compare that to rates up to 18% in the early 80's and it looks even better!

The Time is Now for Real Estate

In the article, "The Time is Now for Real Estate" Rich Levin, a real estate coach, suggests this is the best time for first-time homebuyers and investors to purchase property. Interest rates continue to stay low, around 6% and mortgage money is still readily available, usually with only a 3-5% down payment. Don't forget about the $7,500 federal tax credit for first-time homebuyers until April 2009. Foreclosed homes are quickly being purchased by investors who cannot pass up such a great deal. There is pent-up demand in the market since many lifestyle changes including marriages, divorces, births, deaths, young adults going away to college, or getting their first jobs lead to necessary housing changes. Also, the inflation rate has gone up recently, pulling housing prices up with it. Don't miss out on this opportunity!

Affordability is Key

This article, "Affordability is Key" by Lawrence Yun, NAR Chief Economist explains why the housing market continues to improve despite the economic recession.

"The U.S. economy has entered a recession and will contract for the next three quarters. The recovery, beginning in the second half of 2009, will be tepid. The unemployment rate will peak at 6.7 percent by mid next year before steadily heading down.

Despite these challenging economic times, existing home sales will be rising. Why? The answer, in a word: affordability. Currently, the most important factor driving home sales is affordability. With home prices falling in many parts of the country and mortgage rates still near historic lows, affordability conditions have markedly improved. Even with rising unemployment, nearly 93 percent of households will have jobs. These 93 percent of the working households (rather than 95 percent during good economic times) respond to home buying incentives. Measures such as the recently enacted first-time homebuyer tax credit and a larger number of mortgage loans that qualify for purchase by Fannie Mae and Freddie Mac and through the FHA program will further bring homebuyers to the marketplace.

I say this because we have history as a lesson. Back in the prior recession (2001-2003) the economy shed nearly 2 million net jobs. Even during those years, existing-home sales rose from 5.2 million to 6.2 million just as jobs were being cut. New home sales, likewise rose from 900,000 to 1.1 million. Mortgage rates were falling. Housing affordability increased. While those 2 million job cuts were painful, the economy still had 130 million job holders. And given the right incentives, they purchased homes."

Read the entire story here: http://www.realtor.org/research/reinsights/forecast

McCain, Obama solidify stands on housing

Both presidential candidates have announced plans to help voters deal with the challenging housing economy.

Here are their ideas as posted on their election Web sites:

Sen. John McCain:

• Direct assistance to homeowners. No taxpayer money should go to real estate speculators who made bad decisions about investments.
  
• Reform financial and lending systems to prevent a repeat.
  
• Require participating lenders to forgive part of subprime borrowers' loan principals and place them into new 30-year Federal Housing Administration loans.
  
• Give financing to municipal and civic groups trying to solve problems within their own communities.

Sen. Barack Obama

• Create a standardized disclosure plan that allows for full-disclosure of loan costs and provisions.
  
• Crack down on mortgage fraud.
  
• Give a mortgage credit to those who don't itemize deductions.
  
• Create a fund to help homeowners who face foreclosure refinance.
  
• Allow bankruptcy courts to modify a homeowner's mortgage payments.
  

Source: The San Diego Union-Tribune, Lori Weisberg

Columbus: Best Place to Retire

Columbus was named the Best Place to Retire according to Forbes.com! The survey looked at affordability to stretch the retirement nest egg. Columbus has reasonably priced housing and a low inflation rate. The survey also took into consideration medical services, recreation, and the availability of jobs that could be second careers for those who work past age 65. Here are the top five cities:

1. Columbus, Ohio
2. Dallas, Texas
3. Minneapolis, Minn.
4. Houston, Texas
5. Salt Lake City, Utah

How is the housing market?

I think this is the most common question I hear. “Sales are not as high as they were during the boom years but they are in keeping with pre-boom levels,” says Greg Hrabcak, president of the Columbus Board of Realtors. “That, in and of itself, is really good news, because theoretically, we should be experiencing much lower sales to compensate for the inflated numbers we saw back in 2004, 2005 and 2006.

As fewer homes were added to the market in September than in August, the number of homes for sale continued to decrease. With 16,598 homes on the market in September, the area’s inventory was at its lowest point since February,

“The housing market follows the same basic principles of supply and demand, so as inventory continues to decline from what were record high numbers just a few years ago, sales prices will increase and central Ohio will again see a market that is balanced in favor of both buyers and sellers,” Hrabcak added.

In central Ohio the housing market continues to balance. Coldwell Banker actually had 3.7% more sales in September 2008 than September 2007. Overall, the Columbus market had only 1.5% fewer sales in September 2008 versus September 2007.

The average sale price of a home in September was $160,755, down 4.5 percent year to date, but only 1.7 percent behind what the average home sold for last September.

Despite all of the negative news in the media, the housing market in Columbus is stable.

http://www.columbusrealtors.com/16482.cfm

Free first-time homebuyer workshop

Homes on the Hill CDC will hold the homebuyer education course, A Home of Your Own, geared toward first-time homebuyers. The course is open to the public and free of charge. The workshop will cover topics ranging from financial literacy, credit and mortgage loans to how to choose a realtor, home inspections, and the closing process. Guest speakers will include area professionals in the fields of lending, real estate, and housing. This workshop may be a requirement for some down payment assistance programs and first time homebuyer loan programs. It is held at the Vineyard Community Center, 6000 Cooper Road, Westerville, Ohio 43081 on November 1st and 8th from 9 am to 1 pm. You must sign up in advance by calling 275-4663 ext. 100. It is located just down the street from The Edge condos, which are great for first-time home buyers, so stop by on your way home. I've taught the Realtor portion of these classes and am very impressed with the program. Please consider taking the classes if you are considering the purchase of a home.

Homes on the Hill CDC (HOTH) is a nonprofit organization providing decent, affordable housing for low and moderate income individuals and families and helping to strengthen their neighborhoods.

down payment assistance

The Ohio Housing Finance Agency (OHFA) had one of the few and perhaps the only program left where first-time home buyers could receive a second loan to borrow the 3% down payment that is now required. As of this week, OHFA has temporarily had to stop this program. The only way to get a loan without a 3% down payment now is to receive it as a gift. As of January first, the down payment amount increases to 3.5% so if you are thinking about purchasing a home this winter, you might consider buying a little earlier.

Some builders have also started a work equity program where buyers can actually help build their own home in lieu of the 3% down payment.

One other good thing to know...sellers can still contribute up to 3% of the purchase price for a conventional loan or 6% for an FHA loan to go toward the buyer's closing costs or discount points, but not the down payment. If you're selling a home now, this could be a great incentive to get it sold!

Open House!

This Sunday from 2-4 pm I am holding an open house at 886 White Willow Lane. Look for my blog about it and I'll look for you there!

Sold!

Another happy buyer and seller! My listing at 893 Caniff Place closed today for $141,092.

My seller is happy to have it sold and to move to Dayton to be closer to family, but will miss all the great years in this house and her neighbors here. Best wishes in your new home!

Open House

Hi Readers,

I am having an open house at my listing at 906 Caniff Road this Sunday, October 12th from 2 to 4 pm. Check out my post from a few weeks ago for more information about the house. It doesn't have many updates, but it's really a great deal for the price. Plus, interest rates are lower than they have been, making this an excellent time to buy. If you put some money into updates it could be worth around $180,000 or it could be a great rental property as is. I really think it's a great floor plan and a great neighborhood. Come see me on Sunday!

Karen

886 White Willow Lane

I just got a new listing in the Village at Willow Brook at 886 White Willow Lane. It's a 3 bedroom unit with two bedrooms and bathrooms on the first floor and a third bedroom on the second floor. The great room, living room, and dining room have an open floor plan. I love the windows around the fireplace and the way the afternoon sun shines in! You can enjoy this beautiful fall weather from the fenced patio or on the front porch. Upstairs, the bedroom has two HUGE closets, one with plumbing and wiring already installed if you want to add a bathroom. The two car attached garage and first floor utility room are very convenient.

I think the best part is the neighborhood. It has the best condo association I've ever experienced. They have so many social events like potlucks, playing cards, Bible studies, book clubs, and more. The neighbors care so much to keep the condo fees low that they actually volunteer to plant and maintain the flowers at the entrance and monitor the pool all season. For a condo fee of $148 per month you get trash pickup, water, a clubhouse, exercise room, pool, insurance, exterior building maintenance, snow removal, and landscaping!

You'd probably like to know the price, right? It's $198,500. Let me know if you know of anyone who might be interested in seeing it!