Tag Archives: industry

8 new-home trends for 2012

A recent article by MSN Real Estate focused on a survey by the National Association of Business Economics, covering new-home building trends in 2012.  Read further to get the gist of the article, and head on over to MSN’s website for more details.

The housing industry has taken a beating these past few years, but a glimmer of hope is on the horizon. Housing starts are expected to increase 10% in 2012, according to a survey by the National Association of Business Economics.

Not surprisingly, though, the Great Recession curtailed many of the extravagances that buyers desired before things went south. Homebuyers want different things from their homes today. The watchword is flexibility — things such as rooms that serve multiple purposes and homes that can accommodate either “boomerang” children or aging parents.

We talked to homebuilders and industry watchers to find out what will be behind the front doors of homes built in 2012. How do these features compare to your wish list?

Easy access

  • Single-story homes
  • Grab bars in the bathroom
  • Fewer stairs and more ramps

A bigger garage — for more than just cars

  • To accommodate storage and avoid clutter
  • “Man caves” — additional family area

The ‘resource center’

  • Fewer rooms dedicated to one purpose
  • Nooks for household work or homework areas

Homes within homes

  • About one-third of American adults are living in the same household with another generation
  • Increase in dual master suites / apartments

Really ‘green’ homes

  • Greater energy efficiency
  • Solar panels to power the house

Home plans that fit today

  • Direct access to laundry areas/rooms
  • Large pantries off the garage for bulk items from warehouses
  • Drop zones for keys, mail, cell phones

The house that flows

  • Open floor plan — increases the perceived size
  • Great rooms opening to the outdoor areas

Infill is in

  • “Infill” homes within existing towns
  • Emphasizes affordability, public transportation access, job centers

 

All of this information is from MSN Real Esate’s article. Read more of this article by Christopher Solomon, of MSN Real Estate here: “8 New-Home Trends for 2012.”

Rise in Home Sales Signifies Strengthening Market

The long-awaited housing recovery is beginning to blossom, according to industry experts taking a look at recent existing-home sales.

While admitting home sales “are still very low,” Paul Dales, chief economist at Capital Economics, says “it is clear that housing recovery is now well underway.”

The evidence: home sales have been on the rise for the past three months, posting a 5 percent increase in December.

Lawrence Yun, chief economist for the National Association of Realtors (NAR), concurs with Dales’ assessment, saying “The pattern of home sales in recent months demonstrates a market in recovery.”

Yun suggests consumers are gaining confidence from “record low mortgage interest rates, job growth and bargain home prices.”

In addition to the 5 percent increase in December, NAR reported a 1.7 percent annual increase in existing-home sales in 2011, a total of 4.26 million homes for the year.

Distressed homes made up 32 percent of sales in December, according to NAR’s existing home sales report for the month.
Foreclosed home sales closed at about 22 percent below market rate in December, a discount 2 percent higher than that recorded a year earlier.

Investor demand remains steady with 21 percent of homes sold in December going to investors after this category of buyers took 19 percent of purchases in November and 20 percent one year ago.

Cash sales – commonly linked to investors – made up 31 percent of December’s existing-home sales. This rate was 28 percent in November and 29 percent a year ago.

Purchases by first-time home buyers declined in December – both from the previous month and the previous year. First-time home buyers accounted for 31 percent of purchases in December, down from 35 percent in November and 33 percent in December 2010.

Housing inventory is on the decline and fell to its lowest level since March 2005 last month, according to NAR. Approximately 2.3 million homes are available for sale currently.

“The inventory supply suggests many markets will continue to see prices stabilize or grow moderately in the near future,” Yun said.

However, listed inventory is only part of the equation, and according to CoreLogic’s latest numbers, shadow inventory stands at about 1.6 million.

Regardless, Dales believes sales will rise this year. “Housing still won’t contribute much to GDP growth over the next few years, but at least it will no longer subtract from it,” Dales says.

9 Reasons to be Optimistic About Housing

housing marketThere’s a lot of negative information and news about the real estate market, but not to worry–there is a brighter side to housing! In fact, there are nine reasons to be optimistic!

There’s been a lot of positive signs for a housing (and broader economic recovery) coming out lately. Here are nine reasons we might be looking at a better 2012 than 2011 in the residential construction market:

  1. Unemployment dropped to its lowest point since 20092. Pending home sales up 10.3 percent in October
  2. Pending sales up 10.2 percent in October
  3. Housing affordability at record levels
  4. Consumer confidence up heading into year-end
  5. Existing home sales make surprising October jump
  6. Residential construction spending up 3.4 percent
  7. Construction industry adds most jobs since 2006
  8. Builder confidence at 18-month high
  9. Single-family starts increased in October

Read the article in full at HousingZone.com: “9 Reasons to be Optimistic About Housing“.

Top six reasons mortgage applications are rejected

Half of refinance applications are abandoned or rejected, as are 30 percent of purchase mortgage applications, according to the Mortgage Bankers Association. All told, the Federal Financial Institutions Examination Council (FFIEC) says that well over 2 million mortgage applications were rejected last year.

Want to avoid falling into that number? It’s tough — especially in light of the fact that mortgage lenders have become increasingly restrictive in terms of their lending guidelines since the housing market crash.

Here, as a cautionary tale and primer on what to expect, are the top six reasons mortgage lenders reject applications.FFIEC

1. Income issues. Most failed applications falling into this category have income too low for the mortgage amount they are seeking; often, a spouse’s credit issues can create this problem, too, as the income the spouse plans to actually chip in toward the mortgage cannot be considered by a lender.

But increasingly, the recent vagaries of the job market are also causing this issue, as people who have changed their line of work or have changed from salaried employee to freelancer over the last couple of years can also have their home loan applications rejected based on income.

2. Muddled money matters. If the mortgage for which you’re applying plus your monthly payments on credit card, car and student loan debts will comprise more than 45 percent of your total income, you could have problems qualifying for a home loan. You might also run into problems if you rely too heavily on bonuses, overtime, cash wages or rental income — all of these can be difficult or impossible to get a mortgage bank to consider, and if they do, they might not take all of it into account.

3. Credit issues. Today, the mortgage-qualifying FICO score cutoff falls somewhere between 620 and 660, depending on which lender and which loan type you seek. More than one-third of Americans, by some numbers, have credit scores too low to qualify for a home loan. Even if your credit score is high enough to qualify, if you have any late mortgage payments, a short sale, a foreclosure or a bankruptcy in the last two years, loan qualifying could be difficult to impossible.

4. Property didn’t appraise. Since the whole industry had its hand smacked for allowing home values to skyrocket in a very short time, appraisal guidelines have tightened up — some would say, even more than overall mortgage guidelines. So, it is increasingly common to have the property appraise for a price lower than the sale price negotiated between the buyer and seller.

This is especially common in the refinance realm, as well over a quarter of U.S. homes are now upside-down, meaning the mortgage balance owed is greater than the value of the home.

5. Condition problems. With all the distressed properties on the market, and with most non-distressed sellers barely breaking even, more home-sale transactions than ever are falling apart due to condition problems with the property. Many lenders will not extend financing on homes where the appraiser points out problems like cracked or broken windows, missing kitchen appliances, electrical problems, or wood rot.

And in the world of condos and other units that belong to a homeowners association, if more than 25 percent of units are rented (rather than owner-occupied) or more than 15 percent are delinquent on their HOA dues, new applications for refinance or purchase mortgages on units in the development are likely to be rejected.

6. Technical difficulties with application. The days when lenders just took your word for it are long, long gone. Applications with incomplete or unverifiable information are doomed.

If any of these mortgage loan application glitches arise in your homebuying or refinancing process, it’s critical that you connect with your mortgage professional, be it your banker or mortgage broker, to determine what course of action to take.

In some cases, it might be as simple as buying a stove you find at Craigslist and installing it before escrow closes; but with income issues your mortgage pro will need to help you determine whether it makes sense to pay some bills down, get a co-signer, or even wait six months so your income documentation will qualify.

Tara-Nicholle Nelson is an author and the Consumer Ambassador and Educator for real estate listings search site Trulia.com.