Andy's Real Estate Market and Industry Blog

The National Association of Home Builders/Wells Fargo index (HMI) that measures builder confidence has reported gains for the third straight month. The highest level since May 2010 and the first time there have been 3 consecutive increases since 2009. This increase is the result of emerging pockets of recovery and increased consumer inquires by potential home buyers.  Increases were spread over all 3 of the key components of the index. Giving home builder’s reason to be optimistic about their sales forecast in 2012. Home builders note that continued tightening of credit and foreclosure numbers across the county are still factors that will hamper the pace of growth in the housing market.

My sense is that potential home buyers have been waiting on the sidelines for years for the market to bounce back and feel that we are probably somewhere around the bottom of the market and that low prices and record low interest rates are a good combination for purchasing.  In the same way seller are tired of waiting and are coming to understand that a return to the home prices of 2005 is most likely years off.  In the last 18 months or so, I have seen and heard from many home owners tired of putting their lives on hold. Whether it is families waiting to move up to that bigger home or retirees waiting to start the new chapter of their lives, these sellers are deciding to move on with their lives and make the move as long as they are able. I recognize that many home owners are underwater on their homes and need to wait some more out of necessity, but those who have equity are, in growth numbers, choosing to take less and move. Prices in our local market have been inching up in the last 2 years and as a result many home owners that were underwater are no longer  and if that trend continues we will have a growing number of sellers deciding to sell unleashing that pent up demand and ultimately fueling the housing recovery. I can say in summation that I too am optimistic about 2012 and see a great opportunity for the first time home buyer, investor and yes, dare I say the move up buyer.

Andy Higgins, Realtor

AJ@higginshomesales.com

www.higginshomesales.com

I posted an article a few weeks ago regarding FHA and convention loan limit reductions that caused many buyers in major cities to rethink their borrowing plans. This week The FHA reversed their reduction, increasing loan limit maximums back to their previous levels. In the larger cities, like Washington D.C metro area, where I sell real estate, that means an increase of over $100,000  to $729,750. The move will allow and encourage more buyers with lower down payments to purchase homes. At this point Fannie Mae’s and Freddie Mac’s loan limits are still set at the lower limit maximums of $625,500 and are not announcing any plans to follow in the the FHA’s foot steps.

According to a survey done by Move, Inc. , 70% of Americans say that a candidate’s position on housing could sway their vote.  Americans are divided on what kind of help is most important but interest rates, credit availability and helping Americans avoid foreclosure rate high on that list of areas needing attention.  The interesting stat is that 21% of Americans believe that the government should be doing More, 31% of Americans want about the same amount, but 42% believe the government should be doing less. The younger home buyers, the Millennials, in the sample, by a 67% majority believe that the government should maintain or reduce their current levels of involvement.

Interestingly enough I have not been hearing a lot from the candidates regarding the specifics of their housing policies. Did their handlers and consultants miss this issue?  I would think the candidates would be very interested in courting the 70% of Americans interested in hearing an articulated policy. My advice to the candidates would be to have a housing policy and state it. And if you want my vote reduce your involvement in the market, and please use a targeted approach.

Andy Higgins, Re/Max Premier,

Andy@HigginsHomeSales.com

As of Oct 1st Fannie Mae/Freddie Mac and FHA did reduce their conforming loan limits in High Cost Areas to the limits established under the “permanent” high-cost area loan limits that were established under the Housing and Economic Recovery Act (HERA) of 2008. In some areas the reductions are not significant but in major metro areas the reduction is significant. In the D.C. Metro area the limit was reduced more than $100,000 to $625,500. Buyers of higher priced homes have had to rethink their planned financing, digging deeper into savings, 401ks and or opting for alternative loan scenarios or move to jumbo loan products which generally means a higher interest rate will be applied. The FHA also increased the monthly component of their mortgage insurance premium a bit, but, FHA loans continue to be a good option for buyers with lower down payments.