Wednesday, November 25, 2009

Real Estate News

Today seems to be a day of good Real Estate news across the country. Home mortgages are at all time lows, and sales of new homes are on the rise. Remember when I said I thought the market had hit bottom? Well all current signs seem to indicate I was right.
So, get out there and buy a home before you end up paying more than you have to! The Michigan Real Estate Market is ripe for the picking--on and off water.

Tuesday, November 17, 2009

Michigan's Federal Funds

There is so much federal money circulating around the state that many are unaware of how it is being spent. There are a few housing programs that this federal money is being spent on all over the state.

The state offers many programs to lower income households. The Section 8 Housing Choice Voucher Program (HCV) is a federally funded program, administered by the MSHDA that provides money to help eligible low income households pay their rent. If you qualify and are accepted as a participant, the amount you personally pay for rent and utilities may vary, but generally your portion will not exceed 40 percent of your income.

Michigan's Weatherization Assistance Program (WAP) is a federally-funded, low-income residential energy conservation program. The program provides free home energy conservation services to low-income Michigan homeowners and renters. These services reduce energy use and lower utility bills, thus creating more self-sufficient households.

The Neighborhood Stabilization Program (NSP) is created from Title III of Division B of the Housing and Economic Recovery Act of 2008. States, cities, and counties will receive a total of $3.92 billion to acquire, rehabilitate, demolish, and redevelop foreclosed and abandoned residential properties. Funds were allocated to states and local governments under a formula developed by the U.S. Department of Housing and Urban Development (HUD)

In Grand Rapids the offer the Housing Rehabilitation Program by the Housing Rehabilitation Division. This program offers affordable loans for home repairs. The Program also offers assistance to qualified homeowners that includes the following: Help determining what repairs are needed and how the work should be done with priority given to exterior Housing Code orders. The program aids in emergency repairs and environmental issues (lead paint), as well as help selecting a contractor and getting a fair price, and help to ensure the repairs are complete and of good quality.

Grand Rapids also offers the Rental Rehabilitation Program through the Community Development Department by the Housing Rehabilitation Division. The Program offers assistance to Landlords to make substantial improvements to their rental properties. This program including Housing Code required repairs on the interior and exterior, environmental hazards including asbestos and lead based paint. The program also offers energy and water efficiency improvements, alterations to improve accessibility in the units, and livability and "rentability" improvements.

Also beginning July 5, 2009, Michigan Law requires all lenders to work with homeowners to avoid foreclosure.
If you have missed one or more payments, follow the steps below:
1. Open all mail from your lender. You will receive a notice in the mail stating your RIGHT to work with your lender and a housing counselor.
2. Call a certified, non-profit housing counselor or your local legal aid office as soon as you receive the notice. You will have 14 days from the date the notice was mailed to contact a housing counselor or your local legal aid office: ALL homeowners will receive free help, regardless of income level. Agencies providing assistance in the state includes: State of Michigan Save the Dream, HOPE Hotline, United Way, MI Foreclosure Prevention Project
3. Once you’ve contacted a housing counselor, you will have 90 days to work with your lender to work out an agreement on your loan. (The law determines eligibility. There will be homeowners who are not eligible for a modification under the law because they just don't have enough income.)

Tuesday, November 10, 2009

Home Buyer Tax Credit Extended, and Expanded

The new legislation extends the existing $8,000 first-time home buyer credit beyond its scheduled Nov. 30 expiration date. Now home buyers must sign a contract before April 30, 2010 and close by June 30, 2010 to take advantage of the credit. The bill made more homeowners eligible to claim the tax credit. First-time buyers who have not owned a home in the past three years qualify for an $8,000 rebate. The credit was extended to now include existing homeowners who sell their current property and purchase a primary residence that costs $800,000 or less. These people who have owned and occupied a residence for at least five years can claim a $6,500 tax credit. Home buyers who qualify must maintain the new home as their main residence for at least three years or they will have to repay the credit. The bill also increased the income levels to couples earning as much as $225,000 a year and individuals earning up to $125,000, compared to the current income levels of $75,000 limit for individuals and $150,000 for couples.

Unemployment Extension

The fourth extension of unemployment benefits to the longtime jobless will be offered in all states. The law provides a additional 14 weeks of unemployment benefits to all out-of-work people who have exhausted their benefits or will do so by the end of the year. Those in states where the jobless rate is 8.5% or above get an additional six weeks.

Tuesday, November 3, 2009

Undervaluation of Homes due to Economic Situation

Many new home buyers took advantage of low mortgage rates and the $8,000 tax credit that is coming to an end at the end of this month. New home buyers must close by Nov. 30 to take advantage of this tax credit. Continued concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers through June 30, and possibly expand it to include all home buyers.

Looking forward contracts signed for pending home sales in September rose 6.1 percent to 110.1 from 103.8 in August. This is 21.2 percent higher than September 2008 when the rate was 90.9. This is the largest annual increase on record, marking eight consecutive monthly gains. The index is at the highest level since December 2006 when the pending sales index was 112.8.

Home prices appear to be stabilizing. The median national home price today is about $174,000, this is an estimated 30 percent from its peak in years past. Housing prices are justified by the fundamentals of the economy and may even represent an undervaluation. In determining valuations housing prices continue to be dragged down by foreclosures and short sales, where the mortgage exceeds the sales price.

It is estimated that about 50 percent of homes sold today are foreclosures and short sales. Nearly 88,000 homes in September were repossessed, up from about 76,000 a month earlier. "The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report by RealtyTrac Inc". The consequences of these missed projections are significant. Lenders are avoiding refinancing mortgages of otherwise creditworthy households because the mortgage exceeds the value of the home due to the market distortion. Unemployment is forcing many into foreclose and this is overwhelming federal programs. This is adding to the poor economic situation causing the housing market to climb up slowly.

For more information on purchasing your new home contact Andrea Crossman Group