Wanna Sell? List NOW - Don't Wait!!

"There is considerable evidence, both anecdotal and statistical, that fewer people in the region are listing their homes for sale. " This is what Alan Heavens reported on Sunday and a phenomenon that I also have observed myself in the past few months. Bottom line in what this means to you... if you want to sell your property - list it now - don't wait - there are buyers out there now and not enough new inventory... in the springtime - there is likely to be a glut. Read the entire article here.

Philly Real Estate Prices Holding Better than Most Cities in the Nation

Alan J. Heavens reported in the Philadelphia Inquirer yesterday that Philadelphia is on a lis of seven (7) cities prime for a residential real estate rebound, along with Denver; Seattle; Raleigh, N.C.; Salt Lake City; Des Moines, Iowa; and Birmingham, Ala. The full article is here
Zillow.com's chief economist, Stan Humphries, said Nov. 13 that "it seems that Philadelphia may escape the worst of the housing-market woes affecting much of the rest of the country."
Foreclosure rates here remain well below those of other regions. Though I won't minimize the misery of people facing the loss of their homes in this area, it could be a lot worse - instead of one filing for every 2,500 houses in Chester County, it could be one in every 62, as it is in Vegas.
Let me emphasize that most mortgage loans today are not in default; it's just that the focus is on those that are.

Philadelphia Broker Announces $1,000 cash buyer incentive!!

In an unprecedented move, Philadelphia area Realtor, Prudential Fox and Roach announces an incentive program for buyers. It will be unveiled Sunday, November 9th at their multi-county OPEN HOUSE EXTRAVAGANZA. On that Sunday, a very large number of property listings by the firm will be OPEN HOUSE to the public. Potential buyers will sign in to register on special forms. If a buyer purchases any of these listings (or any Prudential Fox and Roach listing), obtains their mortgage through Trident Mortgage (this is the in-house mortgage company owned by Prudential Fox and Roach), and settles before the end of March in 2009, they will receive a $1,000 cash credit at time of settlement to be applied to their total closing costs and down payment!!
This program is expected to increase exposure for all sellers who have their properties listed with this firm (the largest in the Delaware Valley and 4th largest in the United States). The program is being offered at no additional expense to the property owners.
There is plenty of financing available for qualified buyers and over 100 different mortgage products including FHA, VA, as well as conventional and non-conforming loans.
For more information or details, contact Marlene Goldberg at 215-517-6362. If a potential home seller is ready to list their property - it is not too late to get involved in this excellent program.

Philadelphia Area at Lower Risk of Housing Price Drops

An article in the Phildelphia Inquirer last week by Alan Heavens, cites several statistical sources indicating that the eight county Phildelphia region is likely to fare better than many other metropolitan regions over the next two years with regards to falling home prices. It cites direct intervention by the city of Phildelphia. (The city has a pilot program for mortgage foreclosure diversions). Our region also is fortunate in that we have several major medical centers and also many colleges and universities that are large employers. These types of institutions are generally somewhat recession proof.

FHA LOAN LIMITS GO UP!!!

The new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development.


This is particularly dramatic in the Philadelphia Area:
Just Announced Today……
FHA Loan Limit Increases Are Official:
BUCKS CO./MONT. CO./PHILADELPHIA CO./DELEWARE CO./CHESTER CO. ----- NEW- $420,000

This is up from the previous limit of lower $200,000's. In the past 24 years of being a Realtor, FHA loans were primarily of use only for lower to lower-middle income buyers. They are great loans because they only require 3% down, rates are great, and they are insured by HUD. This means that many more properties will be eligible for FHA financing and more buyers will be able to afford them. Qualifying standards are sometimes easier for FHA vs conventional loans as well. By the way, conventional loans are those that are not either VA or FHA. The latter two having connections to the Federal Government. FHA loans are insured (for the benefit of the lenders that grant these loans) and VA loans are guaranteed by the Veteran's Administration. Different words, and slightly different meanings. Conventional loans have neither and with low down payments, usually require "private mortgage insurance". If his all sounds confusing to you, please send me an email. marlene@marlenegoldberg.com. Thanks!!



We expect the impact of these loan limit increases on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages. As NAR (Natl Assoc of Realtors) research points out, increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation’s mortgage market. An economic impact study conducted by NAR in January 2008 estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points.

Philadelphia Area Foreclosures Far Less than Other Regions.

Foreclosures in the Philadelphia area dropped by 32 percent last year, according to RealtyTrac.
The California company, which tracks foreclosures, released its Year-End 2007 Metropolitan Foreclosure Report, ranking the nation's 100 largest metro areas by percentage of total households entering some stage of foreclosure.
Philadelphia was 79th, with a foreclosure rate of 0.492 percent of households. The area recorded 16,246 foreclosure filing in 2007. Camden, N.J., where foreclosures were up 42 percent, was 37th on the list with a foreclosure rate of 1.23 percent and 5,237 filings.
Read the entire article here:
http://www.bizjournals.com/philadelphia/stories/2008/02/11/daily26.html
This jives with my personal impression of the Philadelphia area market in early 2008. Buyers are out there and properties that show well and are priced correctly are moving. Days on market appears to be shortening.

Why do mortgage rates go up when the Fed lowers rates?

The Fed cut rates 50bp on Wednesday which takes the Fed Funds Rate down to 3.0%. This is a big help for business loans, consumer loans, Home Equity Lines of Credit and Adjustable Rate Mortgages. But how will this affect mortgage rates? As we have said for years, Fed Rate cuts do not have a direct impact on fixed mortgage rates. In fact, they often serve to push them in the opposite direction, by fanning fears of inflation when they cut - or by fighting inflation when they hike. Fixed mortgage rates are directly affected by inflation, because a fixed rate mortgage provides the investor with a fixed rate of return for a long period of time. As inflation increases, the buying power of that fixed return is eroded, because it costs more dollars to buy the same amount of goods and services. So if inflation is on the rise - investors will demand a higher fixed rate of return to compensate them for the more rapid erosion of buying power on their return. The last time the Fed had a long cutting cycle was back in 2001. The Fed cut eleven times in eleven months, and eight of those cuts were by 50bp, for a total of a 4.75% drop in the Fed Funds Rate. But mortgage rates were actually higher throughout this drastic cutting cycle, because inflation ticked higher. Let's look at more recent history, and as we have pointed to previously: the Fed cut by 50bp on September 18, 2007, and after prices enjoyed a move higher that afternoon, Mortgage Bonds lost 94bp over the next two days. On October 31st, the Fed lowered by 25bp...and over the next five trading days, Mortgage Bonds lost 78bp. On December 11th, the Fed lowered by another 25bp, and over the next two days, Mortgage Bonds lost 64bp. Most recently - the surprise 75bp cut by the Fed cost us about 150bp on our rate sheets over the next two days.

Reprinted from an original posting by Michael Lee of Trident Mortgage Bankers (owned by Pudential Fox and Roach Realtors)

New Loan Program Eliminates PMI!!

This is great news!! For the uniformed, PMI (private mortgage insurance) is insurance YOU would have to pay as a home buyer for the benefit of the lender/mortgage company in the event you are putting less than 20% down. The fees for this can be pretty hefty.

Now, some lenders are actually offering borrowers with good credit the opportunity to borrow up to 85% of the sale price (15% down), with NO PMI and the exact same interest rate they would get with 20% down. For these same high credit score borrowers (generally this means over 700) they can put even 5 or 10 % down and not pay ANY PMI, but at these lower down payments they can expect a small rate bump - on the order of 1/4 point.

Buyers with less than stellar credit are also eligible for slightly higher rate bumps, but NO PMI means the savings are still huge! This is a great deal!

I see the Real Estate Market Picking Up NOW!

The third week in January, it is bitter cold here in Philly, yesterday was the NFL playoffs - to many folks - way more exciting than the Super Bowl. Combine that with all the doom and gloom you hear about how much the real estate market is in the toilet. Everyone from the WSJ to Suze Orman has led us to believe that no one is buying homes and Realtors might as well just give it up - go become hairdressers, or whatever.... Are they right?

Um, imho - they are all wrong. Our office had amazing open houses yeseterday with LOTS of buyers showing up at properties that did not even have any directional signs on them. Buyers came just from ads, e.g. no curious and nosy neighbors!! Our phones are busy. Properties are getting offers - some multiple bids taking place. Mortgage rates are fab right now - only 5.75 %. This is exciting. I think the media is always six-nine months behind in reporting what I observe day to day. It took them a really long time to realize that the market was tanking - I saw it about nine months before it was widely reported. Now, I see real signs of life in the market and the media is way behind again.

Smart buyers will jump in now while inventory is still up and rates are great - I say you have about a sixty day window of opportunity here. Rates may climb a bit in the spring. Just my intuition and gut feeling based on some empirical observations - combined with 24 years of watching the real estate market here in the Philadelphia area. What's your take?

Private Mortgage Insurance Deduction is Back!!

Congress Makes Mortgage Insurance payments tax deductible for 2007.


At a time when some homeowners need relief most, Congress has extended legislation allowing homeowners to deduct private mortgage insurance payments. When obtaining a home mortgage, borrowers who put less than 20% down are required by the lenders to take out this type of insurance. This insurance is for the benefit of the lender, not the homeowner and is paid monthly until there is 20 % equity in the property at which time the premiums may be dropped. That can, however, take quite a long time, especially when values are not appreciating or even falling.

The tax legislation, originally approved in December2006, pertained only to lands closed in the 2007 calendar year. With this renewal,there are three important points to note:

The tax deductibility extension is for three more years (through 2010). After that, it will have to be renewed again for existing homeowners to continue to deduct premiums and for new borrowers to take the deduction.

There are specific guidelines concerning annual income in order to determine who is eligible and at what level for this tax break. Consult your tax professional for more details. I also have additional details on the specifics of this legislation that I can provide to you. Please contact me if you want more information.