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What’s In, What’s Out with Home Buyers in 2009?

Mark Nash, author of four real estate books, has completed his annual survey of 839 real estate agents in all fifty states in the US and the eight provinces of Canada.

What’s in, what’s out with Homebuyers illuminates what’s popular or what sours homebuyers in both the home purchase or sale transaction and home decor. Compiled annually from-the-trenches, it offers a spectrum of tips that cover reality of buying a home and design no-no’s for home sellers and buyer must-haves.

What’s IN

Sidelined home buyers. Family or lifestyle additions or changes made in buyers households in the last three years are forcing those waiting out the market transition to finally get off the fence and say, it’s time for our family to buy the new home that suits our new needs.

Home uplifts. Not a big renovation, but some new finishes that can visually holdover stay-put home sellers. Not a gut rehab to the studs new kitchen, but new flooring, countertops and appliances.

Collaborative home pricing. The old days of home sellers configuring a homes price are out. What’s new is that the seller with their agent look at closed comparables, set a price, then the buyer and their agent agree or disagree, but in the end, a mortgage lender and their appraiser will set the price, as they are assuming the most risk in the transaction.

Balanced reporting by real estate and personal finance journalists. Consumers learned in 2008 that the ‘doom and gloom’ residential real estate market headlines don’t apply to all markets. What’s been lost in the foreclosure hype is that there are still stories of homes selling in short market times (in as little as 3 days), homes selling at full price and some selling with multiple contracts on the table. Existing home sales will be 5.02 million versus 5.652 million for 2007, a decrease of just over eleven percent, considerably less that the recent correction in the U.S. stock market, plus a realistic view that over five million people purchased a home despite the headlines in 2008.

Creative home seller financing. Exhausted home sellers are turning to self-financing to move properties. Installment sale contracts and lease to own are the most popular and effective ways for sellers to begin to receive income from a property that has languished on the market in 2008.

Property tax appeals. With home prices dropping, many savvy home owners are appealing their property taxes. This is especially attractive to those looking to sell their home in 2009. With a competitive marketplace, those with the most realistic taxes are more likely to offer buyers an overall lower expense in home ownership.

House therapists. Divided partners in a home are increasingly relying on an independent third party (house therapist or coach) to bring household relationships to common ground on such prickly issues such as to stay or move, how much to spend on remodeling or decorating, or spending nothing at all. Third parties can outline the benefits and pitfalls of over-spending on a new larger home or weighing in on a spouses desire to over-improve for the neighborhood. With less equity and with the financial stakes higher smart couples hire a home therapist to wrangle concessions and agreements out with their significant other instead of doing damage to their relationship by going head-to-head with them.

Architectural overhead garage doors. After years of bland vanilla garage doors, the architecture has permeated the door most people look at the most. Traditional styling has arrived with mullioned windows, faux wrought iron hinges and latches that provide the original non-overhead garage door look. Contemporary looks now include the adjacent siding applied over the door for a seamless look, much like the panels installed on refrigerator doors to complement cabinets in a kitchen.

Loveseats. A pair or trio is gaining acceptance as the functional way to rearrange a living or family room. Consumers appreciate the ease at which they can rearrange them, move an extra one to another room, or provide long-term furniture flexibility in future homes. Plus, they’re tired of sitting miles away from others on over-sized sectional sofas.

The master bed as a throne. With consumer spending down and more nesting at home, home owners are focusing on making their bed like an at-home luxury hotel experience. Posh linens, pillows and mattresses create a getaway without leaving home.

Older war-horse appliances. Collectable, working appliances form the 1940’s through the late 1980’s have found a new niche among homeowners who appreciate their rock-solid construction and durability. Harvest gold double ovens from the 1970’s have been repainted a metallic red and go from boring to bold. Cold spot refrigerators from the 1950’s refinished in sky blue perks up the butler’s pantry in suburban home. And, the early 1960’s dryer that looks like it’s from a Jet son house painted pink to match punches up the in-unit laundry room in a condominium.

Dining chairs that don’t match. With consumers watching their non-essential spending closely and electing to stay home to entertain friends, many have found a quick pick-me-up for their dining room suite, mismatched pairs or single chairs. Feedback from friends or family has been favorable to this easy and cost effective way to say welcome to my cutting edge table.What’s OUT

Fixer-upper homes. With larger down payments required by mortgage lenders and consumer credit cards mixed out, home buyers want a home in move-in condition. The DYI days are on the wane as buyers want to inherit new kitchens and bathrooms.

Foreclosure fluff. The foreclosure rate nationally in 2008 was just under 3 percent. In the Great Depression it was just over forty-percent.

Home buyers endless “circling” prospective short-list properties. Overly optimistic thinking by buyers to circle a preferred property indefinitely, often for months, waiting for further price reductions or to wear out long weary sellers. This practice has backfired for buyers who practice this style of pre-negotiating. They often loose their short-list dream home and frustrate savvy price-right sellers. Ditto the bottom-feeder buyers.

Home staging. A recently over-used low cost marketing band-aid for vacant or occupied homes with longer than normal market times. Buyers have said enough of the non-professional usage of assorted leftover props placed around a for-sale home to make it supposedly homey. Buyers say, market it as it is and clear out the tired silk flowers and stale potpourri.

Indoor-outdoor carpet. The staples of quick-fix home sellers for basements, balconies, screened porches and lanai’s, buyers have said enough. Many have told agents that inexpensive indoor-outdoor carpet is visual pollution and often masks flaws in a home.

Track lighting. Thought of by homeowners to be a quick way to get an art gallery look, many prospective buyers usually take them out and discount their appeal. As one Gen-X home buyer said to me “Why do sellers install them up when they don’t really have any interesting artwork or architectural features to spotlight? They bring undue attention to nothing.”

Written by Mark Nash

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About Alton, New Hampshire

Alton is a  town in Belknap County in Belknap, New Hampshire.The population was 4,502 at the 2000 census. It is home to Alton Bay State Forest and  Mount Major State Forest. Alton includes the village of Alton Bay, a long-time resort located beside Lake Winnipesaukee.

Alton is a lovely community located at the southern tip of Lake Winnipesaukee providing for year round activities such as boating, swimming, snowmobiling, and skiing. The town is located at the crossroads of highways route 11 and 28 that allows for easy travel to the seacoast and the Concord/Manchester areas.

History

Originally called New Durham Gore because of rocky upland areas, or “gores,” the town was settled in the middle 1770s, mainly by farmers because the highland areas provided less frost. Merchants then filled the lowlands. Early Alton history recounts stories of the merchants trying to convince the farmers to incorporate. They would succeed in 1796, when the community was named for the Alton family.

By 1840, the village of Alton existed at the town’s center. In 1847, railways began bringing passengers and freight to Alton Village and Alton Bay. Various businesses flourished, the most famous being the Rockwell Clough Company, established in 1875, inventor and manufacturer of the corkscrew. By 1903, the company was producing 30 million of these gadgets worldwide.

Since the mid-1800s, however, tourism has been the principal business. In 1863, Adventis Campground held their first camp meeting at Alton Bay. In 1872, the Boston and Maine Railroad launched at Alton Bay  the steamer Mount Washington, the first side-wheeler and largest vessel on Lake Winnipesaukee. When destroyed by fire in 1939, a replacement ship was found, also christened Mount Washington. Today, it continues to carry summer tourists between stops on the lake. The railway survived until 1935, but the old station at Alton Bay is now a community center.

Geography and Demographics

According to the United States Census Bureau, the town has a total area of 82.2 square miles), of which 63.1 sq mi (163 km²) is land and 19.0 sq mi (49 km²) is water, comprising 23.18% of the town. Alton is drained by the Merrymeeting River.  Mount Major, in Mount Major State Forest, has an elevation of 1,780 feet (540m) above sea level. Popular with hikers, the summit offers unsurpassed views of Lake Winnipesaukee. The highest point in Alton is the north peak of Straightback Mountain, at 1,910 ft (580 m), just west of Mount Major. Both mountains are part of the Belknap Mountain range. Alton lies almost fully within the Merrimack River watershed, though a tiny corner is in the Piscataqua River (Coastal) watershed.

As of the census of 2000, there were 4,502 people, 1,825 households, and 1,295 families residing in the town. The population density was 71.3 people per square mile (27.5/km²). There were 3,522 housing units at an average density of 55.8/sq mi . There were 1,825 households out of which 28.7% had children under the age of 18 living with them, 60.7% were married couples living together, 6.6% had a female householder with no husband present, and 29.0% were non-families. 23.8% of all households were made up of individuals and 10.4% had someone living alone who was 65 years of age or older. The average household size was 2.47 and the average family size was 2.93.

In the town the population was spread out with 23.8% under the age of 18, 5.4% from 18 to 24, 26.7% from 25 to 44, 28.7% from 45 to 64, and 15.4% who were 65 years of age or older. The median age was 41 years. For every 100 females there were 98.9 males. For every 100 females age 18 and over, there were 96.8 males.

The median income for a household in the town was $43,451, and the median income for a family was $46,467. Males had a median income of $37,585 versus $29,375 for females. The per capita income for the town was $25,940.

Still Many Happy Returns for Home Rehabs

Despite home price drops in many cities, remodeling projects are holding their own as a way for owners to add value.

Many people are wondering where their money will be safest during these uncertain economic times. Experts still advise investing in your home still pays off.

National Association of Realtors® (NAR) statistics show that home prices have fallen by an average of 7 percent nationally in the past year. But the value of home owners’ investment in remodeling projects has declined only 3.86 percent on average between 2007 and 2008, according to Remodeling’s 2008–2009 Cost vs. Value Report.

Remodeling produces the Cost vs. Value Report each year in cooperation with Realtor® magazine. Realtors responding to a survey in midsummer said home owners could expect to recoup a national average of 67.3 percent of their investment in 30 different home improvement projects. At the height of the housing boom in 2005, home owners could expect to recoup a national average of 86.7 percent on projects.

Remodeling remains hot in 10 cities, where, on at least some projects, home owners can recover 100 percent of their costs. In Charlotte, N.C., for example, decks, midrange kitchen remodels, vinyl siding, and window-replacement projects all would net more than they cost, in respondents’ estimation. High rates of recovery were seen in both strong real estate markets and weak ones.

Many cities with the highest rates of recovery were smaller—Jackson, Miss., and Billings, Mont., for example—which may point to lower labor and materials costs that are easier to recoup.

Seattle also made the list of cities with a cost recovery of more than 100 percent on decks and minor kitchen remodels. In fact, Pacific Coast cities recorded the best payback on remodeling by a wide margin, as they did in 2007. Although construction costs on the Pacific Coast are nearly 17 percent higher than national averages, the value of renovations at resale more than makes up for those higher prices.

The result is an average cost-recouped percentage that’s 14.8 percent higher than in the rest of the country. The toughest place to get your money back: Midwestern cities such as Chicago, Cleveland, Indianapolis, and Milwaukee.

Top 10 Project Paybacks

Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year’s Cost vs. Value survey. When you compare the national averages, replacement projects that boost curb appeal—siding, windows, and decks—give you the greatest chance of recouping your money. Inside, only kitchen remodels can compare, at least on a national level.

• Upscale fiber cement siding (86.7%)
• Midrange wood deck (81.8%)
• Midrange vinyl siding (80.7%)
• Upscale foam-backed vinyl (80.4%)
• Midrange minor kitchen remodel (79.5%)
• Upscale vinyl window replacement (79.2%)
• Midrange wood window replacement (77.7%)
• Midrange vinyl window replacement (77.2%)
• Upscale wood window replacement (76.5%
• Midrange major kitchen remodel (76.0%)

Read January 2009 Newsletter

100 Hillcroft Road Laconia NH - Laconia, New Hampshire

Smaller Homeowner Relief Already In Place

Article from the November 2008 Real Estate Update, which is the monthly newsletter put out by Century 21 Lakes Region Realty.

Don’t wait for home owner bailout provisions to trickle down from the $700 billion Emergency Economic Stabilization Act of 2008,” (H.R. 1424) recently rushed through Congress.

When it comes to help from new federal legislation for distressed home owners, the $300 billion “Housing and Economic Recovery Act of 2008″ (H.R. 3221), signed earlier this year, can provide more immediate relief.

The $300 billion recovery act has both a mandated mortgage modifying provision and a voluntary “Hope For Homeowners” (H4H) refinance program, for home owners who qualify.

President Bush signed the larger $700 billion stabilization act on Oct. 3, 2008, but it is, in-part, “stay tuned” legislation. Exactly how it will be implemented to help home owners — or the economy at large, for that matter — isn’t fully clear.

In part, the stabilization act calls for federal agencies holding mortgage and mortgage securities to identify loans that can be modified and work toward modifications. The stabilization act also allows the U.S. Secretary of the Treasury to use loan guarantees and credit enhancements to help home owners avoid foreclosures. And the stabilization deal calls for shoring up the H4H program. How any of those provisions will be implemented, however, is still under consideration.

Loan modifications

On the other hand, the older recovery act, signed in July came with one provision ready to go. It mandated that mortgage servicers modify loans for certain home owners to help them avoid foreclosure as long as three requirements are met:

1. A default on the mortgage either has already happened or is “reasonably foreseeable.”
2. The home owner lives in the property as his or her primary residence.
3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure.

It’s up to the home owner to prove, in writing, his or her case to the lender. That could mean some back and forth negotiating, even legal wrangling. To that end, an accredited mortgage, banker and broker certifier, CMPS Institute, offers a sample letter (http://www.cmpsinstitute.org) containing more assistance, and tips to help home owners negotiate a loan modification.

The institute further advises:

1. Your hardship letter should demonstrate job loss, a serious health condition, an ensuing balloon payment, a coming adjustable rate reset or some other financial calamity that will preclude you from making your mortgage payments as scheduled.

2. Send the letter along with documented evidence — your financial statements, employment records, tax returns and bank statements and other evidence that demonstrates how you can afford a modified loan under your present financial circumstances. Also send the lender a current appraisal of your home or otherwise document the current value of your home.

3. Deal directly with a representative of the lender’s “loss mitigation” or workout department– not a broker, loan originator or other mortgage staffer.

FHA refinancing

Newly effective Oct. 1, 2008 a second provision of the recovery act allows troubled mortgage holders to avoid foreclosure by refinancing into smaller, more affordable, Federal Housing Administration (FHA)-backed mortgages, provided Uncle Sam gets a piece of the equity-growth action and provided the lender voluntarily agrees to the deal, which includes writing down or reducing loan balances.

U.S. Department of Housing and Urban Affairs’ (HUD) “Hope For Homeowners” fact sheets (http://www.hud.gov) spell out the details.

The refinanced, 30-year, fixed rated FHA mortgages in the H4H program are for home owner-occupants having difficulty making their payments.

The existing mortgage must have been originated on or before January 1, 2008, and the owner must have made at least six payments.

Banks can volunteer to write down an existing mortgage to 90 percent of the new appraised value of the home. To get the deal to fly, any holders of existing mortgage liens must release the liens and waive all prepayment penalties and late payment fees. The existing first mortgage holder has to accept the H4H loan as full settlement of all outstanding indebtedness.

As of March 2008, the home owner’s total monthly mortgage payments due must be more than 31 percent of the household’s gross monthly income.

The loan amount on the new H4H mortgage cannot exceed $550,440. The amount can include a financed 3 percent “Upfront Mortgage Insurance Premium” and other loan costs. The home owner must also pay a 1.5 percent annual mortgage insurance premium.

The home owner cannot take out a second mortgage for the first five years of the new loan, except under certain emergency conditions.

The borrower must agree to share equity with the FHA, both the equity created at the beginning of the new mortgage and future appreciation in the value of the home. If the home is sold or refinanced, the homeowner will share the equity with FHA on a sliding scale ranging from a 100 percent FHA share after the first year to a minimum of 50 percent after five years. The FHA will share a portion of its equity earnings, when available, with past lien holders until any available appreciation is exhausted. Any left over appreciation goes to the FHA on the sliding scale.

Written by Broderick Perkins

CENTURY 21 Lakes Region Realty
E-mail: experts@lakesregionrealestate.com
Web: http://www.lakesregionrealestate.com
Moultonboro: 603-253-7766 / Meredith: 603-279-6000
Ossipee: 603-539-2155

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