Manhattan Moving

July 11, 2008

While the rest of the country is suffering under the plummeting prices of the real estate market, it seems that Manhattanites have a good reason to feel protected. Although sales are down in this popular and prestigious area of New York, the strong demand for luxury living in the area has maintained the prices. The average Manhattan apartment now costs a remarkable $1.67 million. However, real estate market experts are claiming that these numbers indicate a softer real estate market here.

The volume of sales in Manhattan continues to be the same as what it was in previous years. However, the average home price is rising, making it a surprising turn of events when compared to the rest of the real estate markets in the country. Regardless, experts are saying that the constant barrage of negative press concerning the real estate market is bound to take its toll, even in places like Manhattan, where the home sales are predicted to slow.

Other industry experts disagree, however. The ordinary has never been enough for the homeowners in Manhattan and the booming luxury real estate market, a protected enclave from the rest of the troubling economy, is protecting Manhattan real estate. In other words, the world of Us versus Them has never been more prominent in New York where realtors are noticing the luxury market and the rest of the market are taking divergent paths.

Unlike the rest of the markets in the country, the average price of a Manhattan apartment rose anywhere between 25% to 36% over the last year. However, two of the most prestigious addresses in the area, 15 Central Park West and The Plaza, did not see the increase.

Overall, sales figures are down in the area. Sales were down 38% from the same time last year and overall, sales number had decreased 21.8% on a year to year average. Nevertheless, real estate experts are experiencing the higher priced property sales to help balance out the slower sales. There are elevated levels of activity reported in this real estate market overall. The luxury market is virtually unscathed by the woes of the middle range real estate market, which has slowed down by the greatest margins.

However, the negative predictions continue. There are layoffs predicted for Wall Street, which would play a large role in the luxury real estate market. There are current homeowners whose future unemployment could create a need to sell their home fast. On the other hand, industry experts point out that if you are looking for a $20 million home, you are not terrifically concerned with your mortgage payments, nor are you as apt to get into poor mortgage situations with variable interest rates.

There is a flood of luxury condominium buildings in the Manhattan market that underscores the trend of positive buying in the luxury community. With full concierge services, swimming pools, spas and more, these condos are being quickly purchased no matter what is going on with the rest of the country and its real estate market woes. As any Manhattanite will tell you, things are just different in New York City.

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Are Foreclosures Slowing Down?

July 9, 2008

Although nearly 170,000 homeowners were able to avoid foreclosure in the month of May due to the help of alliance leaders, the number of foreclosures still continued to rise. With more and more mortgage assistance groups preventing foreclosures, the hope is that the overall number in troubled homes will drop. However, the foreclosure crisis continues to plague the real estate market and the economy in general.

Real estate industry experts are saying that foreclosures will continue to rise well into June 2008. Why? The impact of the mortgages interest rate has been slowly depleting the savings accounts and money from people who are just holding on, hoping for the market to turn around quickly. As more and more days pass with the stalled economy, these homeowners are finally admitting defeat and having to petition for a foreclosure despite their valiant efforts. However, more and more homeowners are turning to companies like Hope Now, a mortgage alliance firm to help with their payments.

Hope Now reported that roughly 60% of all the homeowners they work with on a daily basis have changed their payments completely. These repayment modifications have allowed these homeowners to remain in their home and survive without the subprime or variable interest rates they were fighting against. The remaining 40% of homeowners who came to them looked into simple modifications in their mortgage payments to make their financial situation improve.  Repayment plans are typically the most important and effective way for homeowners to renegotiate their mortgage. Repayments are the most common solution for homeowners who have fallen behind on their mortgage payments due to layoff or similar situation.

However, repayment plans are meant to be a temporary solution. For that reason, many real estate experts and housing market advocates are saying that simple repayment situations will not be enough to keep the homeowners from the future doom and gloom of the subprime mortgage rates. Repayment scenarios do not reduce the debt involved with the home. Instead, they give the borrower more time to repay the debt they have on top of their typical mortgage payment. In other words, repayment plans do not address the main problem of the mortgage, which is the interest rate and the conditions by which the mortgage was created, forcing them to sell their home.

Despite the trend of foreclosure experts assisting homeowners, foreclosures have continued to rise 7% in the same period of time these firms were providing assistance. Home industry experts forecast that foreclosures will continue to rise at 7% for the next 18 months as more and more homeowners fall victim to the slowed economy and reduction in jobs.

What are institutions like Hope Now doing for homeowners to help them with their payments? For those homeowners dealing with subprime adjustable rate mortgages, firms like Hope Now are petitioning the banks to freeze their introductory low interest rates on subprime ARMs for a minimum of 5 years to prevent foreclosures from dotting the landscape. As these introductory rates hold, the hope is that the homeowner will bounce back financially in order to meet their financial payments in the future.


The Senate Tries to Save the Real Estate Market

July 8, 2008

Although it has been in the works for years, a rescue package for the housing market is finally in the works. Many pieces of the package have been debated by Congress for years, hence the delay, the grouping is now on hand to move towards its completion.

However, due to these uncertain elements, there leaves plenty of room for debate and study when the bill comes up for review to lawmakers. The Senate minority leader Mitch McConnell and the Senate majority leader Harry Reid have come to a general consensus on many of the points in the bill, although this does not leave any certain passing of the real estate package.

One of the most debated topics in the bill is the presence of a series of energy tax breaks that will help homeowners and benefit green living simultaneously. This mixture of environmental concerns and real estate purchases seems to be a dually important part of the real estate package. However, both sides are hopeful that the bill will pass relatively quickly to have the pieces initiated for struggling homeowners facing foreclosure.

What will the real estate package entail and how can it help the common homeowner? This real estate bills focuses on a government backed program specifically aimed to help those homeowners in financial need. Those individuals who are trying to avoid foreclosure because of their borrowing situation will be focused upon. In addition, the regulation and rules of the mortgage market, and the large investor groups that play an integral role in these aspects of borrowing, will be analyzed and revised. Ultimately, the goal of the real estate package is to increase activity in the housing market in a beneficial and safer manner. The increase of foreclosures in the real estate market is the main motivation behind the real estate package.

The hopeful deadline to get the bill to the President is by July 4th. However, the White House has already indicated they will veto the bill in its current state. Specifically, the White House does not agree with an allocated $4 billion to help states with homes in foreclosure, arguing that these funds would help the business lenders more than the individual homeowners.

Overall, the key movements of the real estate package act to prevent increases in future foreclosures, which in turn will help to spur the real estate market in general. In addition, Fannie Mae and Freddie Mac will increase their oversight into the mortgage industry.

One of the biggest parts of the package would allow the Federal Housing Administration to have up to $300 billion in new loans for borrowers who are considered risky. However, the lenders would have to write the loan balances below the appraised value of the new homes to qualify. This program would be voluntary and the fees would be paid for by the premiums that borrowers pay, as well as the fees from Fannie and Freddie Mac. The biggest criticism of the bill states that it would be more likely to encourage poor loans, with the government assisting in 400,000 loans that 1/3 would default on in the future.


Banks are Freezing Home Equity Lines Of Credit – Do You Need Yours To Sell Your House?

July 4, 2008

What would you do if your bank called to tell you that your home equity line of credit had been frozen or even cancelled? For most homeowners, shock would be the first emotion followed quickly by confusion.

Why would banks be pulling the line of credit from homeowners who have had no trouble paying off the loan. Banks have recently been pulling home equity lines of credit from all applicants, even those homeowners who never tapped the line of financial credit.

The number of homeowners who have been affected have been in the tens of thousands, as more and more banks are trying to stem mortgage losses. As banks are dealing with heavy losses from their subprime mortgages and additional high risk loans, the viable home equity loans are also taking a hit as the bank pulls the money before this equity credit line also becomes a problem.

Essentially, banks are trying to save their money from being lost to homes that fall into foreclosure. There are many home owners who took out lines of credit on their house when the real estate market was high. Now these some home owners are needing to sell their house but are having obvious problems finding home buyers. The first thing home owners look to for money when they can no longer afford their mortgage is the equity in their house.

In late third period of 2007, the delinquencies on HELOC mortgages increased 47 percent from the previous year. Analysts have predicted higher numbers for 2008. For this reason, banks have been responded by pulling their Home Equity Lines of Credit, most of which were in high foreclosure cites like, Las Vegas Nevada, Stockton California, Boise Idaho, Miami Florida, Houston Texas, New Jersey, and Orlando Florida.

Where are you most vulnerable to have a frozen HELOC? If you live in a housing area where prices have fallen by 10 percent or more, your property might be the prime target for a HELOC freeze. There are new lending standards which means that your HELOC will be in danger of disappearing if you bought your home with little money down, especially if you purchased your new home within the last few years.

These factors will combine to see a higher rate of foreclosures and might make your financial institution feel that they need to pull the plug on the HELOC before real money troubles begin. Whereas lenders were able to borrow as much as 100 percent of the home value in previous years, most homeowners cannot see more than 90 percent or even as high as 60 percent in some areas that have been severely hit by declines in the housing market.

If you established your HELOC a few years ago, you might be in for a surprise. Current lenders are applying the same revised standards retroactively to current HELOC owners. In order to verify your loan cap, you should contact your bank to see if your loan is at risk. If you miss a payment or have a change in your credit score, your HELOC might also be flagged for a potential freeze.

What should you do? If you are using your HELOC to finish a renovation, you can potentially pull out a lump sum in order to finish the project. You will want to only take what you need so that you do not get into harder financial troubles.

If your HELOC has already been put on hold, you can fight the decision with your financial institution. Look to see why the line was suspended and what you can do to appeal the decision. As many banks automate the process to freezing the loans, you can appeal to a person for a reverse in the decision.

If you are thinking of using your home equity line of credit to pay your mortgage while you sell your house, you might want to pull money out quick. The banks are implementing this new freeze standard nation wide so save the money they have. Your best option to sell your house fast is to get an offer from a local home buyer. These professionals are in every major city in the nation and make their living from helping people sell their house fast.


Get More from the House You’re Stuck With

July 2, 2008

You want a bigger and better home. However, with the current housing market the way that it is, you might not be able to sell your house for what you want. There are homeowners that have spent billions of dollars renovating their homes during the better times. Many home investors see their renovations as necessary steps to increased home prices and a higher possibility of faster sales.

Why not take that concept and apply that to your home now? Rather than see home improvements as a way to appeal to your future seller, why not use home improvements to make you happier…right now! With home sales down almost 18% in just the past year, you probably will not make the right decision by putting your home on the market. However, you can make your existing home more sensational now to make your daily living enjoyable. With more and more home prices stagnating, homeowners are making their current homes the places they want to live rather than trade up to another place.

Give your home the features that it needs to improve value. You can have an upgraded bathroom or higher end kitchen installed in your home now to help with future house sale and daily living now. However, to enjoy the most from your home improvements, do not focus on the financial future growth, but instead concentrate on how much you are enjoying the changes.

What are the biggest complaints by current homeowners? You can address these common concerns to help your existing home situation. Of course, the first solution is to create a home extension on your home to make bigger rooms, kitchen, etc. Of course, this upgrade can be financially difficult. Many homeowners say they want at least a 30% increase in home value square footage size with their new home. If this is not possible, you can at least create the illusion of more space. Take off unneeded doors or install glass French doors in their place. Light the walls with brighter color paints or knock down a half wall. If your wall is not load bearing, it is decorative and able to disappear.

Removing a wall can vary in cost. You can pay as much as $4,500 and as little as $1,500. Load bearing walls will be the most difficult to move and will cost the most for your home. However, the end result could be the most dramatic and potentially convince you to stay in your home for longer than initially predicted.

Do you have wasted space or rooms that are infrequently used? Look at them in a new light and see if you can add them more efficiently into your current floor plan. Finish a basement or turn a sunroom into part of the living room. In addition, you can expect to recoup 75% of your costs and will add to your home value.

Just a few modern conveniences can turn around your bathroom or kitchen. Best of all, when it comes time to sell your home, the bathroom and kitchen upgrade will significantly help in the future sale of your home. Invest for yourself now and you can benefit with your sales in the future.


Will Home Owners Insurance Protect Your Home in a Storm?

June 30, 2008

The news has been filled with stories on environmental disasters lately. As more and more storms roll over the country, citizens in the coastal communities and in the Midwest alike are asking the same question: Is my house safe? And if not, will my home owners insurance cover me for my house value?

For most people, their home is their biggest source of financial equity and the biggest part of their portfolio. To lose a home in a vicious storm not only puts the family on the street, it can be financially devastating as well. Many homeowners are overly confident in their home insurance and the coverage it provides. But will your home insurance really protect you and your home after a storm devastates your property?

Mudslides are typically covered by the standard home owners insurance policy. After all, mudslides are often associated with California, but nowhere else in the country. However, many homes that live on the banks of rivers are in direct threat of losing their home to a mudslide after a tremendous storm with flooding. If your home washes away in a mudslide, you can effectively lose everything, even if you have been a patient and conscientious insurance payer for decades.

Look to see what your home insurance coverage provides. Many standard home owners insurance programs do not take floods, mudslides and earthquakes into account, meaning that if the home is damaged this way, their home value will not be covered.

One of the biggest reasons why home owners insurance does not cover these possibilities is due to the risk factor. Many homes are not located in high risk areas where a mudslide is probable and for this reason, the insurance companies do not want to take on the coverage. Secondly, this type of insurance coverage can be very costly and expensive. If you live in an area that does not have the risk of mudslide and the addition coverage is expensive, chances are you will forego that coverage. And just like that, if your home floats off the riverbank and down the river, you will have lost everything.

Ask your home insurance provider about potential options with your coverage. There are some insurance companies that will offer flood insurance at a discount rate for homes that are not located within a flood zone. You can potentially get coverage for just a few hundred dollars a year and eliminate that risk for your property.

Another smart option is to talk with the experts. Get a mud engineer to come out and look at your property. If you are located on a river bank or on the side of a mountain or hilly area, you might be concerned about mudslides in general. Have an expert come to your property and do an analysis on the mud and soil located under and around your home. With his or her results, you can make a more educated decision about the likelihood of a mudslide happening to your property and adjust your insurance coverage accordingly. Of course, if a mudslide is more likely than you thought, you might want to consider moving!


What to Do about the House Next Door

June 26, 2008

When it comes time to sell your home, curb appeal can be tremendously important. From the start, your home needs to make a solid first impression that will carry the future home buyer into the house on a positive note. Even if your home looks wonderful, however, your neighbors house and the surrounding community can play a role in curb appeal. No matter how much fresh paint or new landscaping dots your front lawn, you will need to worry about your future buyers seeing the eyesore next door.

Eyesores are a common problem. Studies have shown that more than 60% of all homeowners think they have a neighbor that is making their street look bad by not taking care of their home fronts. Roughly 20% of these individuals even claim that they are the cause of the problem! Life can be busy and things like tall weeds and grass, dying lawns, junk in the lawn or peeling paint can be projects that are pushed from one weekend to the next, until the home is an official eyesore.  In turn, affecting the your house value.

The crumbling house next door might be something to avoid when you live in your home, but when you are trying to sell your house, that eyesore now becomes a liability to you. Especially in buyer driven real estate markets, the eyesore next door can translate into lost revenue for you. They will become yet another negotiating tactic for the appraiser and the future home buyer.

How much can you stand to lose from living next to an eyesore? Some calculations go as high as 10% off the value of the home. Of course, different markets will see a different percentage taken off, but all in all, the eyesore is a poor value assessment for your property. What is a homeowner to do?

There are two types of people that have homes that are in disrepair. The first type cannot physically or financially afford to maintain their home and the second are those who are ignoring the common courtesy and trend of maintaining a home. If the home is rented out, you can try contacting the owner well in advance of putting your home on the market. In addition, you can build a group effort that will allow homeowners with limited funds the ability to apply for funds to keep up the exterior of the home.

There are laws that will prohibit certain behavior that can help you address the issues your eyesore has created. For example, there are certain municipal codes that will not allow you to stockpile wood on your property for fear of attracting animals.

However, the smartest move can be to raise your asking price above what you had originally planned. That way, you can negotiate down due to the eyesore next door, but still come out on top with the price that you had initially aimed for. Just a little upkeep can significantly improve the outer appearance of any home, but dealing with an eyesore can be an important part of your home price negotiations when selling your home.


Gas Prices Across The World – How It Affects Housing

June 20, 2008

Who ever said increased gas prices would only affect consumer spending was not in the real estate business. As the cost of fuel increases it has rippling affects in the housing market as well.

With gas prices now over the 4 dollars per gallon in the United States, now natural gas is going up as well. When this happens home buyers look for smaller homes to keep the energy bills down. The big kicker is home buyers look for homes closer to their work.

What does all this mean. It means the condos and town houses that are close to down town, which is close to work for many blue collared professionals will see an increase in buyer traffic and sales. Now days living 20 driving minutes closer to work can add up to hundreds of dollars a month in savings. When home buyers add these savings up over years they will be in the house, and assuming gas prices keep going up, it makes the home buying decision that much easier.

So if you are wondering how the United States compares with other places in the world, here is a list of gas prices

Country                 $ per gallon
Australia                      5.60
 

Belgium                       8.44
Brazil                           6.02

Canada                        5.49
Denmark                      9.31

Finland                         8.90
France                         8.06

Germany                      9.20
Guatemala                   7.38

Hong Kong                   8.33
India                            5.15

Israel                           7.95
Italy                             8.78

Japan                          5.83
Netherlands                10.11

Norway                      10.37
Portugal                      8.90

Sierra Leone              18.43
Singapore                   6.06

South Korea                7.38
Sweden                      8.71

Turkey                      10.14
United Kingdom          8.56

From looking at this data you can only assume that gas prices are not going to go down in the United States any time soon. In fact, it looks like 4 dollars per gallon is a good deal when you compare our price of fuel with other countries.

Would you like to sell your house and buy a house close to down town. If so check with a local home buyer in your area. They purchase many homes each month all across town in your local area. They then sell these homes to people like you, who are looking for great deals on nice homes.

How Inflation and the Dollar are Hurting Your Chances to Sell Your House

May 14, 2008

Paying a mortgage bill is one of the largest monthly bills the average family faces. When the economy dips into a recession, the mortgage payment can seem increasingly daunting. Our current economic situation couples the recession with increasing gas prices and a falling dollar. What does this mean for your mortgage interest rate, your monthly payments and your house value?

Currently, Fannie Mae is allowing some homeowners to refinance their house if they owe more than what their house is actually worth. How could they have gotten into this situation? The answer is interest rates and the decrease in the value of houses. If the interest rate on the mortgage was variable or subprime, the interest rate and consequent mortgage payments can jump vastly higher than what the actual value of the house is worth. Also in almost all major cities across the nation home prices have dropped, meaning now homes have mortgages that are higher than the value of the house. This move by Fannie Mae is significant because in essence, it means that Fannie Mae is willing to take some loss on the current mortgage loan situation for some homeowners rather than let them default and lose their home entirely.

This move by Fannie Mae may help people in many areas in the nation. Cities like Las Vegas, Stockton California, Detroit Michiga, Boise Idaho and others have seen a dramatic decrease in home prices. The bad news is not all home owners will quialify for the refinance help. In order to qualify you have to meet standerds like good credit, have an certain type of existing mortgage and that mortgage had to be put in place at a certain time.

Homeowners and new home builders are in a pinch. Census data seems to have underestimated the number of new homes that have not been sold and foreclosure rates are steadily climbing. In addition, the inflation rate is growing. This pinch on the everyday homeowner can be significant, causing some homes to question whether they can survive during this treacherous time to keep their home through this recession. With the falling dollar in the market, investors are pulling funds from national banks and putting their money abroad, causing national banks and investments to feel the pinch as well. Mortgage rates are unlikely to spike any time soon, but even a small increase could spell bad news for those homeowners just holding on to making their payments on time and avoiding foreclosures.

What else could possibly affect our mortgage interest rates and the housing market overall? The weak labor market plays a large role in the housing market. The economy is in a virtual hiring freeze, while some companies have already started laying off workers. Job loss has always precipitated trouble in the housing market. In addition, overall job loss in the community makes workers and homeowners scared, limiting the housing sales. Any time the general feeling is to hold onto the house you have instead of try to sell it or take on a larger mortgage payment, we are experiencing a weaker housing market. As employers and workers feel more confident about their employment possibilities, the housing market will improve as well.

Interest rates will be dictated by the Federal Government. In early May 2008, the Fed cut the interest rate, which pushed the 10-year treasury rate up. The 30-year mortgage rate follows the treasury rate, so an increase in the payments due would have accompanied this move in the financial sector. In general, homeowners and workers are trying to maintain what they have instead of pushing to take on something new and stagnant movement like this can spell trouble for mortgage rates.

If you are in a financial situation and thinking how can I sell my house fast, then contact your local home buyer. Every major metropolitan area has professional home buyers that help solve home seller problems. They help people avoid foreclosure, with short sales, sell because of divorce, cash out of investment properties, or sell if you have no equity. So contact your local home buyer and receive a free offer for your house, you have nothing to lose.


Foreclosure Prevention Act 2008 – Stop Foreclosure Fast Help

May 6, 2008

The government is doing all they can to stop the slowing of the economy. On February 13th 2008 the Foreclosure Act of 2008 was introduced to congress. Heading up the bill is Senator Harry Reid, a democrat in Nevada. You should not be surprised that Nevada holds the record for the highest foreclosure rate since the real estate market peak in summer of 2005. Along with the senator from Nevada there are 25 cosponsors of the bill all of which are democrats or independents.

Highlights of the Proposed Bill:
The law will increasing preforeclosure counseling funding by and additional 200 million dollars. It is estimated this additional funding would help more than 500,000 additional families connect with their lenders and work out a solution to stop the foreclosure process.

If passed the bill would allow housing finance companies to use proceeds from mortgage revenue bonds to refinance short term and adjustable rate mortgages. This will provide an additional 10 billion dollars of tax exempt money for refinancing first time home buyers houses and multiple tenant rental properties.

The bill could help over 600,000 people stop the foreclosure process by allowing them to file for bankruptcy, then the bankruptcy judge has the option to modify the home owners loan. Only nontraditional and sub prime mortgages would be considered for this loan modification process. Home owners would also need to prove they can not repay the mortgage and it would only primary residential homes would be considered.

Other items on the proposed bill include 4 billion in funding for communities with high rates of foreclosure. The communities or cities would buy vacant houses that are in foreclosure, fix them up and rent them or sell them. The law also proposes making mortgage documents more clear at the closing table.

The likelihood of this bill helping people falling into foreclosure in 2008 is not likely. The process for a bill to be passed into law is time consuming and filled with political setbacks. This does not mean the foreclosure prevention act of 2008 will not help stop foreclosure for many home owners, it just means the people in foreclosure right now or in the near future are not likely to see relief from this bill.

The proposed foreclosure prevention bill still has a long way to go until it becomes law. It was introduced in February, next it will be voted on by the Senate, then voted on by the House, then considered by Mr. president himself. Only after the president accepts the bill does it become law. This is another interested thing about this bill. It is being proposed and supported by democrats, so the question is will our current Republican president accept a bill proposed by all democrats?