The Success of Real Estate Atlanta Blog

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Source: The L.A. Times

First-time buyers made up a bigger share of the housing market in 2009 than any other year on record, according to a study released this afternoon.

The number of first-time home buyers rose to 47% of all home sales from 41% of transactions in last year’s study, and was the highest on record dating back to 1981, according to the Washington-based National Assn. of Realtors.

Home sales have been fueled in recent months by cheap foreclosure properties. Both investors and first-time buyers have jumped into the market to snap up these heavily discounted digs.

For first-time buyers, one major incentive fueling the spree has been a tax credit extended last week by the Obama administration and expanded to include move-up buyers. The Realtors group lobbied heavily for the legislation. Paul Bishop, vice president of research for the Realtors group, said in a statement that several factors have been at play, including the tax incentives.

Many independent economists, however, contend that the credits are being given to people who would have bought anyway.

Of those first-time buyers, 55% purchased their home with a loan backed by the Federal Housing Administration.

That news comes on a day on which an independent audit of the FHA’s finances shows that its cash reserves have shrunk to a level below its legal limit, meaning that this pillar of the recent housing market upswing might need a taxpayer-funded bailout.

From the Washington Post:

The audit examined the excess cash the agency must set aside to deal with unexpected losses in its flagship home-buying program, which has played a key role in supporting the housing market.

As of Sept. 30, those reserves had an estimated value of $3.6 billion, a sharp drop from the $12.9 billion available a year earlier, the audit found. The current total represents 0.53 percent of all outstanding single-family-home loans insured by the FHA, well below the 2 percent portion set by law. This is the first time reserves have fallen under that threshold since 1994.

-- Alejandro Lazo

By Luke Mullins



While many Americans can't wait to cook their turkeys and decorate their Christmas trees, anyone trying to sell a home in the coming months will have an entirely different perspective of the holidays. More than three years after home prices peaked, sellers are still facing an unaccommodating market. On average, it takes between seven and eight weeks to sell a home these days. That's up sharply from four to five weeks back in September of 2005, according to the National Association of Realtors. But the real estate market's seasonal pattern will insert an additional hurdle in front of home sellers this winter. Since many home buyers with children plan their purchases around the scholastic calendar—starting their search in the spring, signing a contract in the summer, and moving in by late August—sales activity tends to erode as the days grow colder before bottoming out in January or February. That means anyone selling a home over the holiday season will have more than just long lines at the mall to contend with. Here are 10 tips to help sellers get the best deal they can during the sluggish, off-season housing market:


1. If you can, wait: With the dynamics of the national housing market heavily favoring buyers, those in a position to postpone their home sale—even for a few months, until the spring—should consider doing so, says Guy Cecala, the publisher of Inside Mortgage Finance. "If you are really looking for top dollar and what people got a couple years ago, don't even bother putting it on the market," Cecala says. "And there are a lot of people who are making that decision."

2. Know your local market: Nothing will affect the outcome of your home sale more directly than its price tag. But in order to determine an appropriate price, you've got to know the ins and outs of your local real estate market. Truth is, all those stories about the national housing slump aren't nearly as important as the developments going on right in your neighborhood. So sellers should do everything they can to take their local market's pulse: read the real estate section in the local newspaper, click through a good housing blog that covers the area, check out nearby homes that are for sale: How much are they selling for? How long are they staying on the market? Here is where a real estate agent with experience in that local market can be a big help. "You can't just look across an entire marketplace and say, "Here is my metro area, and here is what's happening,' " says Keith Gumbinger of HSH.com, a publisher of mortgage and consumer loan information. "You have to try to attenuate yourself with what is happening in your very individualized local market." In addition, take note of any nearby foreclosed properties, as well as changes to the local economy that could alter future housing demand.

[See 10 Secrets of Off-Season Home Buying.]

3. Price aggressively: Once you've got a handle on local market conditions, it's time to price the property. In so doing, be aware that today's buyers are demanding bargains. "The market is very impatient and unforgiving on high-priced houses," says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. "If you are priced over the market, it is unlikely that anything will happen." That means you might have to list the property at 10 to 20 percent—depending on your local market, of course—below what you think it is worth, Cecala says. "Properly priced houses—i.e., discounted houses—are getting snapped up, and people will even bid on them," Cecala says. "If you are trying to capture what you saw [in home prices] two or three years ago, you may not be able to see that for five or 10 years. And people don't seem to accept that."

4. Negotiate your broker's commission: Since you may have to list your home for lower than you would like, it's worth asking if your broker is willing to accept a reduced cut as well. Broker's commissions averaged 5.20 percent in 2008, according to a March 2009 ForSaleByOwner.com analysis. And by handing a smaller cut to their agent, sellers can help soften the blow of the sluggish market. "You want to negotiate your commissions beforehand, especially if you are already pricing very aggressively," Gumbinger says.

5. Get preinspected: With the economy staggering under the weight of 10.2 percent unemployment, home buyers aren't walking around with a lot of cash for home repairs. That means homeowners need make all major repairs before putting the property on the market. To determine what repairs are needed, sellers should have a home inspector evaluate the house, says Judy Moore of Re/Max Landmark Realtors in Lexington, Mass. "In today's market . . . you can lose a sale over the silliest things after a home inspection," Moore says. "And it's not necessary if you get it taken care of beforehand."