Back during the wild and crazy lending days (less than two years ago) of no documentation of credit worthiness, no income verification and no down payment required, conventional loans ruled. Nobody got an FHA loan because sellers wouldn't accept the repair requirements that went with them, and borrowers who couldn't put 3% of the purchase price into the loan couldn't qualify for them.
Now a borrower needs a minimum of 10% down to get a conventional loan. Those who don't have that amount are left with FHA.
Last month, FHA loans were used on 28% of the sales in Tucson. VA loans were 8%, conventional loans were 35% and cash sales accounted for 27%. FHA is the loan of choice for many first time home buyers.
After being temporarily raised last year, on January 1, the limit on FHA loans dropped to $271,050. This made home financing unavailable to a significant part of the population.
The new stimulus package passed this week raised the FHA limit to $316,250. This is welcome news, especially for people who have houses priced above $271,050. Now they have a better chance of selling.
In January, a whopping 83% of the home sales in Tucson were under $300,000. The higher FHA loan limit should help move more properties.
Friday, February 20, 2009
Wednesday, February 18, 2009
Ice Cream Truck
I was out doing battle with thorny plants in my yard this afternoon, when I was thrilled to hear an ice cream truck. When I was a little girl in Massachusetts, the sound of the ice cream truck would send everyone running for home to beg for ten cents so we could buy a push up or fudgicle. Even running on very short legs, we still had time to catch up with the ice cream man who slowly and patiently cruised the neighborhood, trolling for sweet-craving children.
Today's ice cream truck was playing "O Suzannah!", which made sense, followed by "Love Story" (the Ali McGraw/Ryan O'Neal thing) which didn't make any sense at all. The ice cream truck of my youth only played one song, "Pop Goes the Weasel". It was monotonous, but I guess children like the predictability.
I grabbed my camera, and only had enough time to get one shot of the tail end of the speeding ice cream truck. I think the driver is unclear on the ice cream truck concept. Anyway, I'm delighted to live in a place where the ice cream truck comes around in February because when it's summer in Tucson, eating ice cream is too messy.
Open House This Sunday
Realty Executives is having a Mega Open House this weekend, with over ninety houses being held open. Starting Friday, you can see the list of houses at the Realty Executives Southern Arizona website. I will be at 1034 N 7th Avenue in West University on Sunday from 1 to 4 PM. This gorgeous bungalow was built in 1917, across from De Anza Park, just south of Speedway.
Of course, the home has wooden floors and a fireplace. Central air conditioning. Beautifully upgraded kitchen with granite counter tops. Lots of Craftsman Style built in shelves and cabinets.
I'll be there with my trusty side kick Chris Bass from American Home Mortgage. She will be prepared to explain all the Byzantine ins and outs of mortgage lending in 2009, as only Chris can. Please come by and see us and have a cookie!
This house is listed by Susan Denis of Realty Executives Southern Arizona.
What's In The Stimulus Package for Home Buyers?
The $15,000 tax credit for homebuyers that passed the Senate was shot down in the final stimulus package. What's left isn't bad, though. Details are still being worked out, but this is what we know at this point.
1) First time homebuyers (defined as those who have not owned a home in the past three years) are eligible.
2) Home must be purchased Jan 1, 2009 through Nov 30, 2009. This part is dumb. If it's supposed to stimulate the economy, why give the credit to people who have already bought?
3) Buyer can deduct $8,000 from the federal income tax they will owe for 2009 OR 10% of home's value, whichever is less. If the buyer owes less than $8,000 in federal taxes, the balance will be refunded to the buyer. Wow!
4) Available to couples with income less than $150,000 and singles with income less than $75,000.
5) Credit must be repaid if buyer lives in the property for less than three years. This is better than the $7,500 tax credit that was offered last year. Last year's tax credit was really just a no interest loan that had to be repaid.
1) First time homebuyers (defined as those who have not owned a home in the past three years) are eligible.
2) Home must be purchased Jan 1, 2009 through Nov 30, 2009. This part is dumb. If it's supposed to stimulate the economy, why give the credit to people who have already bought?
3) Buyer can deduct $8,000 from the federal income tax they will owe for 2009 OR 10% of home's value, whichever is less. If the buyer owes less than $8,000 in federal taxes, the balance will be refunded to the buyer. Wow!
4) Available to couples with income less than $150,000 and singles with income less than $75,000.
5) Credit must be repaid if buyer lives in the property for less than three years. This is better than the $7,500 tax credit that was offered last year. Last year's tax credit was really just a no interest loan that had to be repaid.
Tuesday, February 17, 2009
January Residential Sales Statistics
The Tucson Association of Realtors has released the residential sales statistics for January 2009.
Average and median home sale prices were down 21.51% and 19.58% from January 2008. Average sale price was $208,133 and median was $163,250.
January is the slowest month of the year, and number of units sold was down 5.31%. Fortunately, new listings were down 36.94% and active listings were down 16.08% from the previous year.
Divide 7,694 active listings in January by 588 sales, and we have a 13 month supply of listings. The buyer is at a strong advantage in this market. The successful seller prices his house appropriately, and he is meticulous about the condition and appeal of his house. Sellers who have a take it or leave it attitude will find that buyers will be happy to leave it.
Average and median home sale prices were down 21.51% and 19.58% from January 2008. Average sale price was $208,133 and median was $163,250.
January is the slowest month of the year, and number of units sold was down 5.31%. Fortunately, new listings were down 36.94% and active listings were down 16.08% from the previous year.
Divide 7,694 active listings in January by 588 sales, and we have a 13 month supply of listings. The buyer is at a strong advantage in this market. The successful seller prices his house appropriately, and he is meticulous about the condition and appeal of his house. Sellers who have a take it or leave it attitude will find that buyers will be happy to leave it.
Monday, February 16, 2009
1009 N Queen Ave
Here's a wonderful opportunity to build in desirable Dunbar-Spring, a neighborhood of restored bungalows built in the 1930s. Conveniently located close to U of A, downtown and all the great shops and restaurants on 4th Avenue. This could be the multicultural setting of your urban dreams. Activists, professionals, environmentalists and long-time Tucson families make a unique and cohesive clan. Check out the community garden, playground and ramadas at University Boulevard and 11th Avenue.
5,515 square feet (0.127 acre). The property already has gas, water and sewer lines on the lot, with electricity at the lot line. Owner will carry mortgage.This property went off the market in June 2010 at $59,000 because nearby foreclosued houses were selling for not much more than that. Please call me if you are interested in this property. 520-909-1171.
Sunday, February 8, 2009
New Appraisal Guidelines
Fannie Mae, the quasi-governmental agency that buys bundled mortgages from mortgage lenders, issued new appraisal guidelines that went into effect January 1. For the most part, this is a good thing, and way overdue. Inflated appraisals are part of the reason house prices ballooned beyond reason.
Appraisers must now note incomplete additions and renovations, as well as conditions that affect the livability, soundness or structural integrity of the building. The property must be appraised subject to completion of the additions or needed repairs. This sure would have prevented me from closing a few sales last year.
The sales contract must be provided to the appraiser so the appraiser will know whether the seller is paying the buyer's closing costs or making repairs. These circumstances result in a lower net to the seller, and may result in a lower appraised value.
Now that 100% financing is no longer available, buyers with limited funds are routinely asking the seller to pay the buyer's closing costs and make repairs. So if a seller has to pay $4,000 in buyer's closing costs and $5,000 in repairs to get his house sold for $200,000, in effect, the sale price was $200,000 minus the seller concessions, or $191,000.
When there are no comparable sales near the property being appraised, and the appraiser has to look more than a mile away for "comps", the appraiser has to explain why the comps are outside the usual mile radius. The appraiser can not ignore nearby comps just because they are foreclosures or were sold under duress.
The appraiser must analyze market trends, and if home sale prices are declining in a neighborhood, time adjustments to the values of the "comps" may be required.
This is what the new appraisal form looks like.
Appraisers must now note incomplete additions and renovations, as well as conditions that affect the livability, soundness or structural integrity of the building. The property must be appraised subject to completion of the additions or needed repairs. This sure would have prevented me from closing a few sales last year.
The sales contract must be provided to the appraiser so the appraiser will know whether the seller is paying the buyer's closing costs or making repairs. These circumstances result in a lower net to the seller, and may result in a lower appraised value.
Now that 100% financing is no longer available, buyers with limited funds are routinely asking the seller to pay the buyer's closing costs and make repairs. So if a seller has to pay $4,000 in buyer's closing costs and $5,000 in repairs to get his house sold for $200,000, in effect, the sale price was $200,000 minus the seller concessions, or $191,000.
When there are no comparable sales near the property being appraised, and the appraiser has to look more than a mile away for "comps", the appraiser has to explain why the comps are outside the usual mile radius. The appraiser can not ignore nearby comps just because they are foreclosures or were sold under duress.
The appraiser must analyze market trends, and if home sale prices are declining in a neighborhood, time adjustments to the values of the "comps" may be required.
This is what the new appraisal form looks like.
Subscribe to:
Posts (Atom)
Posts
