RISMEDIA,
October 28, 2009—Data through August 2009, released by Standard & Poor’s
for its S&P/Case-Shiller Home Price Indices, one of the leading measures of
U.S. home prices, show that the annual rate of decline of the 10-City and
20-City Composites improved compared to last month’s reading. This marks
approximately seven months of improved readings in these statistics, beginning
in early 2009. The annual returns of the 10-City and 20-City Composite Home
Price Indices, declined 10.6% and 11.3%, respectively, in August compared to
the same month last year. Nineteen of the 20 metro areas and both Composites
showed an improvement in the annual rates of decline with August’s readings
compared to July. Cleveland was the only exception.
In our ongoing effort to
educate our community about today’s relevant real estate topics, we are sending
you this Top 5 Real Estate Social Networking System® “e-Article”.If you find the enclosed information beneficial
to your family and friends, we encourage you to forward it to your “social
network" as well.Please give us
your feedback, which is very important to us.
What You Need to Know About Buying an Urban
Property
Whether it’s a waterfront condo or a downtown brownstone, multi-family
dwellings like condos and lofts are gaining appeal for those considering
downsizing, buying a second or vacation home, or desiring a shorter commute to
work. As Members of the Top 5 in Real Estate Network®, we are often asked for our
advice on the best way to go about choosing and buying an urban home. Here are
some great tips we’d like to share from Frontdoor.com:
1. Consider co-ops.
In many high-priced cities, like New York, Chicago [and Fort Lee],
cooperatives (co-ops) are the easiest way to break into homeownership. About
80% of the housing stock in Manhattan,
for example, is co-ops. Co-ops, however, all have different financial
standards. It’s important to be up front with your real estate agent so they
know what you’re qualified to buy.
If you don’t have the cash to make a 20 – 25% down payment, some co-ops will
allow you to use gift money, while others will not.
Also, some co-ops require that you have a certain amount of cash reserves after
the purchase—sometimes equal to the purchase price. Putting all your financial
information on the table can help your agent find a co-op that’s perfect for
you.
2. Explore emerging
neighborhoods.
You might be able to get a deal on an urban property in an up-and-coming area,
but make sure the area is well on the upswing before you buy. An emerging
neighborhood can take several years to redevelop. To make sure it’s a good time
to buy, investigate the area—see what stores, restaurants or cultural
establishments have recently opened or are planning to open in the area. These
are always good indicators of neighborhoods on the rise.
3. Investigate a
potential building’s financial condition.
When you buy a condo, loft or co-op, you’re not just buying a property—you’re
also buying into the building or community. HOAs (Home Owner Associations)
govern condo communities, collecting dues and maintaining the common areas. A
board of directors takes care of these tasks in a cooperative.
Hire an attorney to research the association’s financial stability and its
rules before you sign on the dotted line. Your attorney should look at the
corporation’s yearly financial statements to see how much money it has on hand.
If a building doesn’t have a large reserve, they can charge a special assessment
fee to cover a big repair. These fees are typically announced fairly far in
advance (a year or more is normal), so your attorney should also read the
minutes of corporation meetings to see if any fees have been proposed.
You can also do some of your own investigating. Don’t forget to find out about
the surrounding buildings and their construction plans as well. You don’t want
to buy a home overlooking the water, then find out the week you move in that
someone is building something taller that blocks your view.
4. Don’t plan to buy a
co-op as an investment property.
Multi-family homes can be great investment properties, but co-ops have very
restrictive rules about renting. While condos are typically much more lenient
about rentals, be sure to check the property’s covenants, conditions and
restrictions (CC&Rs) to make sure you’re allowed to lease it to a tenant.
For many, today’s marketplace represents a great opportunity to buy an urban
dwelling that may have been out of reach in years past. If you would like more
information on purchasing urban properties, especially on the Hudson River Gold
Coast, please e-mail
us—and please feel free to forward these tips to members of your social
network who might also find it beneficial. Thanks.
Sincerely,
Lois and John
Lois Feinand John Schwartz
Prominent Properties Sotheby’s International Realty
Top 5 in Real Estate Member
Existing-home
sales bounced back strongly in September with first-time buyers driving much of
the activity, marking five gains in the past six months, according to the National
Association of REALTORS®.
Existing-home sales—including
single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally
adjusted annual rate of 5.57 million units in September from a level of 5.10
million in August, and are 9.2 percent higher than the 5.10 million-unit pace
in September 2008. Sales activity is at the highest level in more than two
years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief
economist, said favorable conditions matched with a tax credit are boosting
home sales. “Much of the momentum is from people responding to the first-time
buyer tax credit, which is freeing many sellers to make a trade and buy another
home,” he said. “We are hopeful the tax credit will be extended and possibly
expanded to more buyers, at least through the middle of next year, because the
rising sales momentum needs to continue for a few additional quarters until we
reach a point of a self-sustaining recovery.”
Even
with the improvement, Yun said the market is underperforming. “Despite
spectacular gains in the stock market, principally from the financial sector
recovery, most of the 75 million home-owning families have more wealth tied to
their homes. Home values could soon turn consistently positive and help the
broad base of middle-class families, but we are not there yet,” he said.
Conditions
for First-Time Buyers Early
information from a large annual consumer study to be released on Nov. 13, the
2009 National Association of REALTORS® Profile of Home Buyers and Sellers ,shows
that first-time home buyers accounted for more than 45 percent of home sales
during the past year. A separate practitioner survey shows that distressed
homes accounted for 29 percent of transactions in September.
NAR
President Charles McMillan said affordability
conditions remain historically high. “Potential first-time buyers can take
heart in that affordability conditions this year are the highest on record
dating back to 1970, but with the first-time buyer tax credit scheduled to
expire at the end of next month, people could hold back from entering the
market,” he said. “Our read is that housing overshot on the downside because
homes are selling for less than replacement construction costs in much of the
country, and the home price-to-income ratio has fallen below the historical
average.”
Inventory
Falls Total
housing inventory at the end of September fell 7.5 percent to 3.63 million existing
homes available for sale, which represents an 7.8-month supply at the current
sales pace, down from an 9.3-month supply in August. Unsold inventory totals
are 15.0 percent below a year ago.
“The
current housing supply is the lowest we’ve seen in two and a half years,” Yun
said. “If we could continue to absorb inventory at this pace, home prices would
return to normal, modest appreciation patterns next year.”
According
to Freddie Mac, the national average commitment rate for a 30-year,
conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19
percent in August; the rate was 6.04 percent in September 2008.
Home
Sales Breakdown The national
median existing-home price for all housing types was $174,900 in September,
which is 8.5 percent lower than September 2008. Distressed properties continue
to downwardly distort the median price because they generally sell at a
discount relative to traditional homes in the same area.
Single-family
home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89
million in September from a pace of 4.47 million in August, and are 7.7 percent
above the 4.54 million-unit level in September 2008. The median existing
single-family home price was $174,900 in September, which is 8.1 percent below
a year ago.
Existing
condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual
rate of 680,000 units in September from 620,000 in August, and are 9.7 percent
above the 561,000-unit pace a year ago. The median existing condo price was
$175,100 in September, down 11.7 percent from September 2008.
Here’s
the region-by-region picture:
Northeast: Existing-home
sales increased 4.4 percent to an annual level of 950,000 in September,
and are 11.8 percent higher than September 2008. The median price was
$234,700, down 7.0 percent from a year ago.
Midwest: Existing-home
sales jumped 9.6 percent in September to a pace of 1.25 million and are
7.8 percent above a year ago. The median price was $147,600, which is 1.0
percent below September 2008.
South: Existing-home
sales rose 9.0 percent to an annual level of 2.06 million in September and
are 10.8 percent higher than September 2008. The median price was
$153,500, down 7.6 percent from a year ago.
West: Existing-home
sales surged 13.0 percent to an annual rate of 1.30 million in September
and are 5.7 percent above a year ago. The median price in the West was
$219,000, which is 15.0 percent below September 2008.
A Fix-Up Strategy Works in Long Run: If You
Have Time on Your Side, Improve and Enjoy Your Home
By Kathleen Lynn
RISMEDIA,
October 17, 2009—(MCT)—You’re thinking of selling—but not just yet. Let’s say
you’ve got a five-year plan to prepare an older, lived-in house for sale.
Maybe
you’re faced with tattered carpets, battered appliances and dingy paint. Or
maybe we’re talking about truly scary problems, such as asbestos, underground
oil tanks or leaking roofs.
What
should you take care of first? What can wait? What can be ignored
altogether? And how do you keep costs under control?
“Basically
what we’re talking about is good, solid preventive maintenance on your home,”
said Barbara Weissmann of Friedberg Properties in River Vale, N.J. She
recommends that homeowners looking at a sale down the road hire a home
inspector to check out the house. “You’re looking to discover defects that you
can fix over time,” she said. She and other experts say it’s possible to get a
house ready for market without spending a fortune, especially if you have time
on your side. And if you’re going to fix up the property anyway, Weissmann
said, “why not do it several years in advance so you can enjoy it?”
The
first jobs to tackle include anything that’s a danger to your health or the
house’s future. If the roof is leaking, for example, that will damage the
ceiling, walls and floors below. Funky wiring or leaky plumbing? Deal with it
sooner, not later. “The biggest killer of a home’s value is no maintenance,”
Weissmann said.
If
there’s flaking asbestos insulation on the pipes, that’s a health hazard, and
can also delay or kill a sale down the line. Don’t try to remove it yourself;
get a licensed contractor.
You
should also make sure you have working smoke and carbon monoxide detectors.
Check with your town; some require that at the time of sale, the alarms must be
wired into the home’s electrical system, a job that requires an electrician.
Other municipalities will accept battery-operated alarms. Either way, you also
want these in place for your own safety, along with a fire extinguisher in the
kitchen.
When
you’re ready to sell, the buyer will generally require that certain major
issues be addressed. Better to handle them now than risk delaying or losing a
deal later. Aside from asbestos, another big environmental concern is an
underground oil tank, which can leak. Jeana Cowie, a RE/MAX agent in Oradell, N.J.,
recently advised a couple who plan to sell in a few years to deal with the tank
now. “I felt that buyers will skip looking at the home because of oil heat,”
Cowie said. “And a new gas furnace is a huge positive for all homes.” Maybe you’ve
already dealt with the oil tank. But if it was only abandoned in place, be
prepared: a buyer will often seek to have it taken out because of concerns that
the job was not done properly, said Louis Chapman, a real estate lawyer in Wayne and Teaneck, N.J.. You might want to have it
removed before putting the house up for sale. Check for radon gas and deal with
it if it’s there; this is something a buyer will also insist on. Try your state
department of environmental protection for testing and correction companies.
Basement
moisture often is an issue in home sales, said Dominick Laurita of Interstate
Home Inspections in Califon, N.J. It can lead to mold, which
can scare buyers away. The most common cause: gutters that aren’t draining
rainwater away from the house. “It’s a simple fix,” said Laurita.
A
termite problem also could derail a sale, so you want to act quickly if you
find evidence of that. Though inspectors can’t see termite damage hidden behind
walls, the insects sometimes leave visible trails. Keep the paperwork on all
these jobs to show an eventual buyer.
Once
you get past the most pressing projects, there are a cluster of jobs where you
have to weigh the benefits against the costs. In general, home sellers get back
only 60% to 80% of the money spent on home improvements, according to
Remodeling magazine. “You’re not getting a dollar back for every dollar you
spend,” Weissmann said. “Don’t do any remodeling whatsoever, but anything that
has to be replaced should be replaced,” said Dick O’Connor, a Dumont,
N.J., real estate broker. “You can spend $50,000 to remodel and get only
$30,000 back. Just be sure everything is in working order.”
Michael
Fitzpatrick, a Hackensack, N.J., real estate lawyer, said it’s okay to
leave some issues to be handled in a negotiation between the seller and buyer,
rather than spend a lot to upgrade the house before you even put it on the
market.
Most
experts recommend against major kitchen or bath renovations. But less ambitious
upgrades, such as replacing scratched countertops or outdated appliances, could
make sense, they said. “You’ve got to make it look good,” said Maria Rini, a
RE/MAX agent in Oradell. “But the spruce-up bill can be a lot less than you
imagine.”
When
it comes to cost-effective fix-ups, most housing experts have three favorites:
clear out clutter, paint the walls and rip up old carpet. If the wood floors
under the carpet are in good shape, great; otherwise, they can be refinished at
a cost that typically ranges from $1.50 to $3 a square foot. Bob Olson, a
contractor with Home Resources in Ridgefield Park, N.J., said updating doors,
moldings and trim can give a home “a fresh new look” at a reasonable
cost.
Improving
the landscaping, especially the front yard, is crucial. But it doesn’t have to
look like a manicured estate. “Clean up the flowerbeds and trim back the bushes
to expose the house,” Rini said. Plant flowers, especially in the front, for
curb appeal, advised Barbara Ostroth, a Coldwell Banker agent in Oradell. In
winter, you can plant cabbage plants with colorful leaves.
If
your furnace or hot water heater dies, obviously you must replace it. If those
items are old but still working, however, most real estate experts advise that
you leave them in place and adjust the home price to reflect their age. “If the
heating system is old but works, don’t touch it,” O’Connor said.
One
option is to buy a home warranty when you’re ready to sell. A warranty “is a
great way to overcome buyers’ objections to older appliances, pipes, electric
systems, furnaces and hot water heaters,” Ostroth said.
New,
energy-efficient windows? That’s a costly job that many sellers would rather
just leave to the buyers, even it means getting a lower price for the property.
“If you’re getting out of the house you would almost never redo the windows,
unless they’re rotted through,” Rini said.
If
you decide to renovate a kitchen or bath for your own enjoyment, keep resale in
mind. “Try to pick something that is salable. Keep it neutral; don’t put in a
green countertop,” said Margrit Vogler of Margrit Vogler Properties in Oradell.
Finishing
a basement could be worthwhile if the house is small and there’s no other
family room or play space for the kids. But otherwise, most real estate
advisers recommend just tidying up instead, by throwing out clutter and
painting the walls and floor.
(c)
2009, North Jersey Media Group Inc.
Distributed by McClatchy-Tribune Information
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