Apr 18, 2013 | Real Estate Tips
An open house gives you a great opportunity to look more closely at Worcester County area real estate you might be interested in buying.
It also affords you the chance to chat with the owner or real estate agent so you can bring up any issues or hesitations you have with the home.
Knowing what to ask can be difficult, so below are examples of questions to ask at the next open house you attend.
Why has the seller decided to sell now?
If you ask why the seller is moving, you could learn valuable information to help determine your offer — or possibly whether or not you want to buy the home.
Knowing whether the owners are about to go into foreclosure, have experienced trouble in the neighborhood, or if they’ve retired and completely paid off the home can help you understand how urgently they need to sell their property.
Has the seller had any other offers?
Don’t forget that you are not only negotiating with the seller for a price, you are also competing with other potential buyers.
It really helps to know what you are up against.
It is important to understand that you might not get a 100% straight answer to this question as most sellers know that competition – or perceived competition – can cause a potential buyer to move forward more quickly and at a higher price.
If you’re comfortable in this discussion, you might want to try and see if you can find out the details of any other offers.
Does the property have special ownership costs?
Ask the agent or owner about the other costs associated with owning the property, such as Home Owners Association fees within a condo complex or a gated community.
It’s important to know about these extra expenses in advance so you can make an informed offer.
You may also want to ask about any pending litigation concerning the property. Litigation is not always a deal killer, but it’s better to know the details before you sign closing documents.
What furniture and appliances are being sold with the house?
Most of the time, a seller will include their major appliances such as the refrigerator, stove and dishwasher with the home, but this isn’t always the case.
If you don’t already have these items, it’s important to know whether they are included in the purchase price.
Is there anything else that you want to leave with the home?
This is an important question to ask. Especially if there are specific things in the home that you have a strong interest in.
Perhaps there is custom art work or a pool table that fits perfectly in the game room.
The seller may be eager to part with those items and include them in the sale of the home or sell them at a large discount.
The open house is a great opportunity to learn more about a home before making the decision to buy it, so be sure you ask the right questions.
Apr 17, 2013 | Housing Analysis
The National Association of Home Builders (NAHB) Wells Fargo Housing Market Index (HMI) report for April shows that builder confidence slipped by two points to a rating of 42 from the March reading of 44.
The Housing Market Index (HMI) measures home builder confidence in market conditions for newly built single family homes.
A reading of more than 50 indicates better than average confidence, while readings below 50 indicate that home builders have concerns about current market conditions.
NAHB Housing Market Index Results For April
Home builders expressed concern over a gap between a growing demand for homes and builders’ ability to meet the demand for new homes as housing market conditions improve.
Top concerns cited by home builders surveyed include:
- Availability of construction credit
- Construction costs rising faster than home values
- Restrictive mortgage lending rules impacting would-be home buyers
Supply chains for building materials and available developed lots are also impacting home builder confidence, as they have been lagging behind increasing demand for homes since the recession and will need more time to catch up.
Six Month Confidence Forecast Strongest Since February 2007
While builder confidence fell on a month-to-month basis, home builders have a more positive outlook for the next six months.
The builder confidence reading for the next six months came in at 53 for April, which is the highest reading since February 2007.
In terms of demand for newly built homes, the home builders surveyed said that a shortage of existing homes, low mortgage rates and increasing consumer confidence are expected to improve the market for existing homes.
Consumer confidence is important to all facets of the home building and mortgage lending industries.
Buying a home is typically the largest investment that consumers make, and their confidence in the economy plays a role in their decisions about when or if they buy a home.
Regional readings for housing markets are based on a three month rolling average.
Results for April were unchanged or lower in all four regions as compared to the rolling average reported in March:
- Northeast: The reading of 38 is unchanged from March.
- Midwest: The reading declined by two points to 45.
- South: April’s reading declined by four points to 42
- West: April’s reading declined by three points to 55, but remains in positive territory.
Regional readings reflect conditions impacting only a specific area of the U.S.
Recent examples include the impact of Hurricane Sandy in the Northeast, and an ongoing lack of land available for home construction in the West.
Apr 15, 2013 | Mortgage Rates
Mortgage rates saw little change last week amidst mixed economic news.
Treasury auctions held on Tuesday, Wednesday and Thursday saw weak demand; this could have been caused by the FOMC minutes that were released on Wednesday.
The minutes indicated that some FOMC members supported ending the current quantitative easing (QE) program within a few months.
The Fed is currently purchasing $85 billion monthly in bonds and Mortgage Backed Securities.
If the QE program is ended, demands for bonds and MBS will decline, which usually raises mortgage rates.
Employment Numbers Show Promise For Housing Market
Thursday’s jobless claims offered some positive news for the Massachusetts real estate market.
Jobless claims fell to 346,000, which is well below Wall Street’s estimate of 365,000 jobless claims and the prior week’s report of 385,000 jobless claims.
As more people find work, more families become able to buy homes.
Demand for homes will boost the housing market, which is already expanding in many areas.
While higher home prices are good for the economy, higher mortgage rates may be likely to follow.
This potentially presents a “double-edged sword” to home buyers with little financial flexibility.
Slower Retail Sales Largely Due To Autos
Retail Sales, which represent approximately 70 percent of the U.S. economy, moved from February’s level of 1.1 percent to -0.4 percent in March.
Expectations were for 0.0 percent change.
The Retail Sales report exclusive of the volatile automotive sector was nearly identical except for the February’s reading of 1.0 percent.
These reports suggest that while the economy is improving in some areas, it has a way to go before it has truly recovered.
What‘s Coming Up Next?
This week, investors will be paying attention to the Consumer Price Index (CPI) and the closely-related Core CPI, which is nearly identical except for its excludes the more volatile food and energy sectors.
These reports will be released on Tuesday for March, with little change expected for the CPI and no change expected for the Core CPI as compared to February.
The CPI is considered an important indicator of inflation.
Unexpected changes in inflationary growth can cause rapid and volatile responses in the financial markets.
Wednesday brings the Fed’s Beige Book, which presents key economic data for each of the Fed’s 12 regions.
Investors watch the Beige Book for signs of the Fed’s position on economic policy during the upcoming FOMC meeting.
Jobless claims will be released Thursday with the expectation of 350,000 claims filed as compared to last week’s 346,000 jobless claims.
Apr 12, 2013 | Federal Reserve
The minutes for the Federal Open Market Committee (FOMC) meeting held March 19 and 20 were released on Wednesday April 10, 2013.
These periodic meetings by the FOMC cover a wide ranging group of topics that impact the overall economy in the United States.
The decisions made and acted upon from the FOMC meetings often sway the real estate and residential financing markets.
Some highlights of the recent FOMC minutes for the March meeting include:
Jobs and Unemployment Gaining Steam
The unemployment rate fell to 7.7 percent in February.
While lower than the average unemployment rate for Q4 2012, the rates of long-term unemployment and part-time employment for economic reasons saw little change, and both measures remained high.
This suggests that the economy is improving in some areas, while others including employment are not so quick to recover.
Housing Markets Looking Robust
U.S. housing markets continued to improve during the inter meeting period, but construction of new housing faced obstacles including tighter credit and in some areas a lack of available building space.
While housing prices are improving, employment rates and wages will also need to expand for consumers to keep pace with rising home prices.
Some of the Fed Meeting participants continued to be very positive about the prospects of the real estate sector noting rising home prices and demand.
At the same time, an overall tone of restraint and caution was expressed regarding the continuing purchase of Mortgage Backed Securities (MBS).
Any slowing in the Fed’s commitment to their previous levels of MBS purchases may create upward pressure on Massachusetts home mortgage interest rates.
Personal Finances and Consumer Confidence
Household expenditures rose modestly during January and retail sales, excluding auto sector, increased at a strong pace in February. Sales of light autos also rose.
Household wealth also increased for homeowners due to increases in home values, which is good news for current homeowners and may be an incentive for new home buyers to move forward and purchase real estate.
Recovering Economy Leads Toward Government Spending Pull Back
The FOMC minutes suggest that the Fed is not likely to end its quantitative easing (QE) program immediately, but the first quarter of 2014 was cited as a potential date for the program to end.
Gradual decreases in the Fed’s purchases of bonds and mortgage backed securities are expected before QE ends, and this could cause mortgage rates to rise as MBS prices fall.
Apr 10, 2013 | Financial Reports
The Bureau of Labor Statistics (BLS) issued its Job Openings and Labor Turnover report for February on Tuesday, June 9th, 2013.
The data was mixed with preliminary figures for all non-farm jobs increasing from 3.62 million jobs in January to 3.93 million jobs in February.
This was the highest month-to- month increase in jobs since May 2008.
Non-farm jobs increased by 399,000 jobs from 3.53 million in February 2012 to 3.93 million jobs in February 2013, an increase of 10.2 percent year-over-year.
More Jobs Means More Opportunities For Home Ownership
More jobs generally means higher incomes and stability which enable more families to buy homes and qualify for mortgage loans.
Hires between January and February 2013 rose from 4.30 million to 4.43 million hires, an increase of 2.70 percent.
Hires between February 2012 and February 2013 fell from 44.9 million to 44.2 million, a decrease of 1.6 percent.
Total non-farm job separations changed little month to month, and remained exactly the same year-over-year at 4.20 million separations.
Numbers of hires and separations surpass job numbers due to workers being hired on and/or separated from more than one job during the reporting period.
Regional Non-Farm Employment Shows Job Growth
- Northeast: Non-farm jobs fell from 688,000 jobs in January 2013 to 647,000 jobs in February 2013, but increased year-over-year from 589,000 jobs to 647,000 jobs.
- South: Non-farm Jobs fell from 1.56 million jobs in January 2013 to 1.50 million jobs in February 2013. Jobs increased year-over-year from 1.34 million jobs in February 2012 to 1.47 million jobs in February 2013.
- Midwest: Non-farm jobs grew from 712,000 in January 2013 to 780,000 jobs in February 2013 and increased from 740,000 jobs to 780,000 from February 2012 to February 2013.
- West: Non-farm jobs increased from 806,000 to 830,000 between January and February 2013; on a year-over-year basis, jobs showed noteworthy growth from 650,000 jobs to 830,000 jobs between February 2012 and February 2013.
It’s A Great Time To Buy Or Refinance A Home
Improving labor data indicates that the economy is on the mend, but this could cause mortgage rates and home prices to rise as the economy expands.
A gradual economic recovery suggests that home buyers and others seeking lower mortgage rates and refinancing can still find favorable mortgage terms.
But it would likely be best to take advantage of the still historic home purchase and financing opportunities that are available today.
Contact your trusted, licensed real estate or mortgage professional today to learn how the growing economy can benefit your family as well.
