Some buyers becoming too picky

Potential buyers are becoming more detail-oriented in today's market.With the prevalence of foreclosures, low home prices and affordable mortgage rates, it may be one of the strongest buyers' markets in a number of years. However, real estate agents told the Washington Post (http://www NULL.washingtonpost NULL.com/wp-dyn/content/article/2011/03/04/AR2011030402606 NULL.html) that some first-time buyers' demands are becoming absurd.

The paper says one Virginia agent has said that buyers have walked away from well-priced homes for reasons such as the kitchen appliances being from different companies, a lack of granite counters or the colors of the carpeting or walls.

Other agents told the paper that the constant stream of home design television shows has given some people unrealistic expectations, causing them to have a distorted view of what a "starter home" usually is.

"The fact is," Oregon real estate agent Cindy Westfall told the paper, "you just can't have it all. You can't have the big yard, the top-line updates and all that in a starter home. You've got to compromise somewhere or else you'll never buy anything."

Buyers are also increasingly opposed to homes that need any kind of renovations. A survey last month from New Jersey-based Coldwell Banker found that 87 percent said a move-in ready property was important.

Home listing word choice makes a big impact

The words in a real estate listing can make a big difference.A recent Canadian study finds that the actual words real estate agents and home sellers use to advertise their properties has a significant impact on how quickly the home will sell, and what price it fetches.

Researchers from the University of Guelph in Ontario analyzed more than 20,000 home listings, and found that the use of "beautiful" instead of "move-in condition" could make as much as a 5 percent difference in the final selling price.

In addition, descriptions that emphasized the attractiveness of the property were more effective than those which focused on value and prices. Although experts said that each market may behave differently.

"There's usually something that can be said in a positive way which will force a buyer reading an ad to see opportunities," Catherine Lindstadt, a broker at Prudential Douglas Elliman Real Estate in New York, told Newsday (http://www NULL.newsday NULL.com/classifieds/real-estate/making-house-for-sale-sing-in-your-ad-1 NULL.2708100).

Another study from the University of Texas at San Antonio (http://faculty NULL.business NULL.utsa NULL.edu/tthomson/papers/Real_Estate_AgentRemarksJRER20_205_215 NULL.pdf) showed that Realtors' comments in the description section of MLS listings can also have an effect, and that comments that discussed the home's features and used the word "updated" resulted in higher selling prices.

Texas housing market shows improvement

Housing figures in Texas are improving.A report from the Federal Reserve Bank of Dallas (http://www NULL.dallasfed NULL.org/research/indicators/2011/tei1103 NULL.pdf) says that the Texas real estate market showed notable improvements in January, as home sales increased.

The report says that statewide, existing-home sales rose for the second straight month in January, rising 3 percent compared to December.

Home construction numbers also showed positive movement. According to the report, housing permits jumped 4.3 percent from December to January – the fourth straight month in which permits have increased. Also, housing starts rebounded by jumping 7.7 percent during the month after a 7 percent drop-off in December.

At the same time, home prices, according to data from Federal Housing Finance Agency, fell to close out 2010, sliding 1.6 percent during the fourth quarter of 2010, creating more affordable conditions for those looking at Houston properties.

Prices for Houston homes, however, have moved in the opposite direction. According to the Houston Association of Realtors, the average home price in the local market gained 2.2 percent in January, reaching its highest level ever for that month.

Effects of government’s mortgage overhaul to start early

The winding down of Fannie Mae and Freddie Mac will make a big impact in the next few months.While lawmakers in Washington are working to wind down Fannie Mae and Freddie Mac over the next five or seven years, real estate experts say the impact from those decisions will be felt well before those changes become final.

Mortgage experts told the New York Times (http://www NULL.nytimes NULL.com/2011/03/06/realestate/mortgages/06Mortgage-fannie-freddie NULL.html) that those looking to buy a home could see higher mortgage costs even within the next year. That's because while some parts of the plan require approval from Congress, others don't, and could be in place quickly.

"There's a lot of uncertainty in the process," Barry Zigas, the director of housing policy at the Consumer Federation of America, told the paper. "but you're probably going to get a better deal on a fixed-rate loan sooner rather than later."

Other analysts said that in the coming months, banks may try to promote adjustable-rate loans instead of fixed-rate mortgages, because they generally bring in more money.

However, that would not be the preferred choice of most people looking at Houston homes. A survey last year by Fannie Mae found that borrowers with fixed-rate loans were more satisfied than those with other mortgage types.

Mortgage rates fall sharply

Mortgage rates have fallen again.After rising to start the year, mortgage rates have declined once again, giving those looking at Houston homes more flexibility when looking to buy properties.

According to Freddie Mac (http://www NULL.freddiemac NULL.com/pmms/release NULL.html?week=9&year=2011), the average rate for a 30-year fixed-rate loan last week was 4.87 percent which is down from 4.95 percent the previous week. Rates for 15-year FRMs also fell, dropping from 4.22 percent to 4.15 percent.

"Mortgage rates saw an overall improvement this week. Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this year's high set just three weeks ago," said Freddie Mac chief economist Frank Nothaft. "This means that homebuyers could now expect to pay $263 less per year on a $200,000 loan."

However, Nothaft also expressed concern with demand in the housing market, with low levels of new home sales and two consecutive drops in the National Association of Realtors' Pending Home Sales Index.

The pending sales index dropped 2.8 percent in February to a reading to 88.9, which is 1.5 percent below the 90.3 mark of a year ago. However, it is still higher than most readings from late last year, when the market was recovering from the absence of the homebuyer tax credit.

Pending home sales fell in January

Pending home sales have fallen.The National Association of Realtors Pending Home Sales Index dropped 2.8 percent in January, falling from a mark of 91.5 in December to 88.9 last month.

Despite the drop, pending housing sales are doing much better than they were last June (http://www NULL.marketwire NULL.com/press-release/Pending-Home-Sales-Decline-in-January-1402874 NULL.htm), when the rate was 20.6 percent lower. The pace of sales for the month of January was 5.36 million. This is slightly higher than the expected number.

"The housing market is healing with sales fluctuating at times, depending on the flow of distressed properties coming on the market," said Lawrence Yun, the chief economist for the National Association of Realtors.

More good news for Houston real estate is that the index indicated that the South rose 1.4 percent to 97.7. The number is currently 0.4 percent below last January, but is well above the national average.

The Houston real estate market has been higher in many areas than the rest of the country, but it is still not out of the woods. Demand for Houston homes is still where it was a few years ago.

Americans are confident housing market will stay steady

Recent survey shows many Americans believe the housing market is steadyingA recent poll discovered that 78 percent of Americans think the current housing market will continue to be stable, or even improve, over the next calendar year. About 61 percent of those polled still think the recession will make the economy worrisome over the next year.

The poll, completed by Fannie Mae (http://www NULL.fanniemae NULL.com/newsreleases/2011/5314 NULL.jhtml;jsessionid=DVK520UE3AYTHJ2FECISFGA), was conducted from October to December of last year. The persons polled were both homeowners and renters, questioning their confidence of the current housing market and economy.

"More Americans believe that housing prices will remain stable over the next year. We also are seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y," said Doug Duncan, the vice president and chief economist of Fannie Mae.

Duncan added that most of those polled do not have enough confidence in the economy and are increasingly concerned if they plan to buy a home in the future.

The Houston real estate is faring much better than the rest of the country. Local home prices have risen for the past several months, according to the Houston Association of Realtors, while the national market has struggled.

Fixed-rate mortgage rates drop below five percent

Mortgage rates have declined again.Thirty-year fixed-rate mortgages dropped this week, going below 5 percent, which is encouraging news for the Houston real estate market, since more people are likely to apply for mortgages and purchase homes.

According to the Freddie Mac's (http://www NULL.freddiemac NULL.com/pmms/release NULL.html?week=8&year=2011) latest weekly survey, 30-year fixed-rate mortgages are averaging 4.95 percent. Last week, the rate was at 5 percent, and a year ago, it was 5.05 percent. The report stated that the Southwest's current FRM is 4.98 percent, which is slightly higher, but could be a welcome sign to prospective buyers of Houston real estate.

"Low mortgage rates and home prices are sustaining affordability in the housing market. Existing home sales rose for the third consecutive month in January and were at the strongest pace in eight months," Frank Nothaft, vice president and chief economist for Freddie Mac said, citing a National Association of Realtors report.

According to that report, the Northeast was the only region of the country that sustained a sales decrease during the month of January, as overall sales topped their year-ago levels.

Texas foreclosure sale rates below the 2010 national average

Foreclosure sales are less common in Texas than in other states.The Texas real estate climate continues to be better than the national market, as the sales of Houston foreclosures continue to be lower than average.

According to RealtyTrac (http://www NULL.realtytrac NULL.com/content/press-releases/2010-year-end-and-q4-foreclosure-sales-report-6402), foreclosure sales are 25.96 percent of all home sales nationwide. The average for the state of Texas is 12.88 percent. This is reassuring for prospective Houston-area residents, as it may show the housing market improving in the area.

Despite this, the national average is still struggling. James J. Saccacio, chief executive officer of RealtyTrac said that while foreclosures are still prevalent, they continue to sell for less than the average price. With less consumer demand, market will be sluggish.

Saccacio added, "The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices."

Texas’ numbers are far lower than some other states. For example, foreclosures made up 57 percent of sales in Nevada.Foreclosure sales in Houston are actually more common that the rest of the state. According to the Houston Association of Realtors, they made up more than 20 percent of local home sales in January.

Report: National home prices drop, but changes in patterns are seen

Report says prices dropping nationally.Purchase prices for U.S. homes dropped by 3.9 percent in the fourth quarter of 2010, according to research released this week by S&P/Case-Shiller, but some large urban markets began to exhibit different trends.

The chairman of the company's index committee, David Blitzer, said in a statement that the trajectories of some major housing sectors have begun to diverge.

"Unlike the 2006 to 2009 period when all cities saw prices move together, we see some differing stories around the country. California is doing better with gains from their low points in Los Angeles, San Diego and San Francisco. At the other end is the Sun Belt – Las Vegas, Miami, Phoenix and Tampa. All four made new lows in December," he said.

Although Houston real estate was not specifically studied in the report, experts say the general trend for the area is good. Other recent studies – while not revealing any skyrocketing property values – showed generally positive movement and definite signs of an ongoing recovery from the housing crash.

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