original article 

The spring season tends to flood the housing market with buyers, and in markets with low inventory levels, the competition is stiff.

As home prices continue to recover and interest rates remain at near-record lows, some houses are receiving multiple offers and to win the bid, buyers need to stand out from the crowd. According to the National Association of Realtors, houses sold in 71 days in January, down from 99 days a year ago.

Since markets are moving fast, experts recommend sellers have their loan pre-approved and down payment ready before starting their search.  “The market is changing,” says Cara Ameer, broker associate and Realtor at Coldwell Banker Vanguard Realty based in Ponte Vedra Beach, Fla. “Inventory is low and demand is high—a buyer needs to know exactly what their parameters are.”

Multiple bids are becoming the norm, so be ready to compete and do your homework to seal the deal. The longer the negotiations, the more chance you could lose out to someone else who made a better offer, says Ameer. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.

While you have to compete in the current market, maintain your budget. “You don’t want to end up paying more for the house than it’s worth,” says Daren Blomquist, vice president at RealtyTrac.

Experts warn against cutting corners like skipping the inspection or engaging in a bidding war. You don’t want to unduly stretch yourself just to get into a property,” says Blomquist.

To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:
Plan Ahead
“You have to plan four months before you’re going to buy,” says Michael Corbett, Trulia’s real estate expert. Check your credit for accuracy and avoiding making any big purchases or taking on any big debt during this time.

“[Debt] brings down your credit score and increases your debt-to-income [ratio] which are two critical things banks look at when qualifying and preapproving you for a loan,” says Corbett.

If your debt-to-income ratio is too high, experts recommend paying down as much debt as you can to lower this ratio.
Set Your Home Price
“Don’t look at a $300,000 home if all you can afford is $250,000,” says Ameer. Less supply on the market increases the likelihood for multiple offers, and you won’t be able to compete. “If properties are selling at 95% of asking price, don’t think you’ll get a deal at 85% of asking price,” she says.

If you do spot a great deal on a house, don’t wait days to make an offer, warns Corbett. Since time isn’t on your side, learn how to spot a great deal by researching an area’s home prices.

“Do a little due diligence and go to open houses—do your homework,” says Corbett. Being educated will help you negotiate and could prevent you from paying more for a house than it’s actually worth because you’re emotionally involved.

Know that Cash is King
The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage, says Corbett.

Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal. “A buyer can contribute more cash to cover the different between the appraisal and offer price,” says Blomquist.

If your appraisal is low, don’t expect the appraiser to come up in value, says Ameer. “Appraisers are under scrutiny with the banks and they have to justify everything they do.” They’re required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, as well as lender guidelines.

Appraisers use surrounding properties for comps, says Ameer, and if there are only foreclosures, that’s a bad hand to be dealt. You can always review the appraisal for discrepancies and suggest different comps but don’t expect the value to change.

Get Preapproved before Your Search
Getting prequalified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process.

If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.

Getting preapproved will also help you to compete with an all cash buyer, says Walter Molony, spokesperson for the National Association of Realtors.

When you know what you can afford and are preapproved, you won’t be shopping outside of your price range, says Corbett. “It makes you a much stronger buyer when you can turn in that preapproval letter with your offer.”

Limit Your Contingencies
Experts suggest having as few contingencies as possible to be an alluring buyer. “Don’t overcomplicate your offer to the seller,” says Ameer. Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer.

Experts advise making an offer based on a satisfactory home inspection. “It gives you the opportunity to walk away if you find in an inspection that there are too many problems with the house,” says Corbett.

Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home, says Blomquist. “As a seller, you’ll sell that home quickly. Then as a buyer, you’re much more appealing than a buyer contingent on a sale.”

Add a Personal Touch
Corbett suggests sending a letter to explain why you want to buy that house. “You become a person who really loves and appreciates the home instead of just a number,” says Corbett. Sending a letter is just one extra little thing that will help level the playing field.

Be Flexible with Closing Dates
“Let the seller know that you would be flexible on the closing timeline,” says Corbett. Find out when the seller would ideally like to close on the house and see if you can match it.

The post How To Be The Most Attractive Homebuyer appeared first on Chicago Downtown Living.

original article

Home prices posted their biggest gain since 2006 in January.

Home prices continued their recovery, rising 8.1% in January, although a separate report showed a slight slowdown in new-home sales.

The S&P Case-Shiller index, which tracks the 20 largest markets in the nation, showed the biggest year-over-year gain in prices since June 2006.

“This marks the highest increase since the housing bubble burst,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

In a separate government report Tuesday, new homes sold at a 411,000 annual rate in February, down nearly 5% from the January sales pace but up 12% from year-earlier levels. The typical price of a new home sold in the month was $246,800, up about 3% from both the January and a year earlier.

Joseph LaVorgna, chief U.S. economist for Deutsche Bank, said that bad weather in February could be partly responsible for the slowdown in sales. But he said market fundamentals suggest that the market for new-home sales should remain strong.

“Despite the pullback in sales in February, the uptrend in housing remains clearly intact,” he said. He is forecasting even stronger sales in the second half of this year.

The Case-Shiller report shows the recovery in home prices is widespread. All 20 markets posted a year-over-year gain, and the pace of increase picked up in every market except Detroit.

Some of the markets hurt the most by the bursting of the housing bubble have enjoyed the biggest gains, led by a 23% rise in Phoenix. Prices were also up more than 10% in San Francisco, Las Vegas, Detroit, Atlanta, Minneapolis, Los Angeles and Miami, all markets that had been hit hard by foreclosures.

New York posted the smallest rise, up only 0.7%.

Even with the recent rise in home prices, the overall index is down 28.4% from the 2006 peak.

But experts say they see a lot of strength in the current market.

“The market still has a long way to go nationally, but the healing process — and a return to a normalized housing market — is definitely well underway,” said Jim Baird, chief investment officer for Plante Moran Financial Advisors.

Home prices have been helped in recent months by a number of factors, including tight inventory of homes available for sale, near record-low mortgage rates and a drop in homes in foreclosure. A decline in unemployment is also helping the housing recovery.

The housing recovery itself is helping support overall economic growth, as builders scramble to hire workers to meet the renewed demand. The lift goes beyond the impact of increased construction on the economy, as the rise in home prices lifts household wealth.

Rising home prices also reduce the number of people owing more on their mortgages than their homes are worth. That, in turn, can help them to refinance those loans at a lower rate, freeing up money to spend on other goods and services. 

The post Biggest rise since housing bubble appeared first on Chicago Downtown Living.

original article

The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California have been drawing competing bids.

The bidding wars are back. Seemingly overnight, many of the nation’s major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters.

In March, 75% of agents with broker Redfin said their clients’ offers were countered by rival bids, up from 56% who said so in late 2011.

The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.

“The only question is not whether a new listing will get multiple bids but how many it will get,” said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.

In Cambridge, Mass., two condos that could be combined into one large home hit the market two weeks ago for $800,000 each, according to Pat Villani, president of Coldwell Banker Residential Brokerage in New England.

“The brokers stopped taking names after the number of bidders reached 250,” she said. The winning bidder offered $2 million for both units.

Homebuyers eager to purchase before home prices and mortgage rates rise are finding few homes for sale as sellers hold out for better deals, said Glenn Kelman, Redfin’s CEO.

Many homeowners are still underwater, owing more on their mortgages than their homes are worth, and they want to wait until selling becomes profitable again. By doing so, they can avoid short sales, which carry big hits on credit scores, 85 to 160 points, according to FICO.

“Many people have been holding on for a profit and they’re just now getting their heads above water,” said Kelman.

Those who want to sell and buy a new home are encountering a market where it’s difficult to find a new place of their own, said Vogt.

Over the past few months, Jackie and Cliff Kaufman have bid on four different homes in St. Petersburg, Fla., including one short sale and a foreclosure.

The pair, who have two adult children and run an online jewelry business, said they bid $5,000 more than the $495,000 asking price on the first home they had their eye on and never heard back from the seller’s agent. They were later told the house sold for nearly $550,000.

Next, they bid on a short sale listed for $600,000. This time, they came in $10,000 above the asking price and again, they were beaten out. The house was only on the market for two days.

The third attempt to make an offer on a bank-owned property was also met with silence.

“It was very frustrating,” said Jackie Kaufman. “We felt we were always on the outside of the loop and that people who won the homes had the inside track.”

By the fourth try, the couple successfully bid through a listing agent, who they believe pushed their bid harder in order to earn a double commission since she was representing both the buyer and seller in the deal. And they managed to get the place for $30,000 less than the asking price.

They were lucky. Inventories of homes for sale continue to shrink. In February, the National Association of Realtors reported a 19.2% decline in inventory year-over-year. While the number of homes for sale should rise with the onset of the spring selling season, housing inventory is expected to remain low, pushing prices higher.

And new home construction, especially in markets hit hard by the housing bust, is still moving forward at a snail’s pace, since the cost to build the homes is often more than what the property ends up selling for, said Jeff Culbertson, president of Coldwell Banker’s Southern California operations.

Even though home prices are on the rise, the balance between buyers and sellers has been thrown off balance, said Kelman.

“With buyers out in force and sellers cautious, the market is in an awkward ‘tweener’ phase,” he said. To top of page

The post The home bidding wars are back! appeared first on Chicago Downtown Living.

original article

As the real estate market significantly rebounds, some buyers and sellers are dipping their toes in the waters for the first time. Inevitably, they come into the market with assumptions about how it works.

Their assumptions may come from TV reality shows or watching their parents’ house-hunting experiences. Maybe they’ve learned about real estate from a co-worker’s recent home buying or selling experience. The trouble is, the new buyer or seller’s assumptions are sometimes based on outdated or generalized “real estate myths.” Here are three such myths that many less-seasoned home buyers and sellers assume are true.

Myth No. 1: Spring is the best time to sell a home

Historically, real estate seasons were tied to summer and the end of the school year. Families were the typical buyers or sellers, and they wanted to move during the summer so their kids could start anew in September. That’s how spring became the prime selling season. It’s true there are still more homes for sale in the spring, which means there’s a lot of activity and buzz. But spring isn’t necessarily the best time to sell a home anymore.

The reality: The best time to sell is during the holidays and right after

Today, more than half of buyers aren’t married, and their decisions aren’t based upon school schedules. So spring isn’t as relevant as it used to be. Instead, the best time to sell a home is in November, December and January.

It’s a supply-and-demand issue. Most sellers assume buyers aren’t seriously looking during this prolonged holiday season. And yet, many buyers are looking at properties in person and online right up until Christmas Eve. If the right home goes on the market in mid-December, a serious buyer — and there will be a lot of them — will take note.

After New Year’s Eve, most buyers jump back into their routine with a resolve to get into the real estate market, even though many sellers wouldn’t even consider listing in January. The net effect: Savvy sellers will face less competition for a still-strong pool of buyers during this period. And that makes November-January a great time to sell.

Myth No. 2: Always start with your lowest offer

There’s no generalized strategy for making an offer on a home anywhere, ever. A seller could have overpriced or underpriced the home on purpose. Some markets may be more competitive than others. But, somehow, in the back of the buyer’s head is good old Uncle Bob saying “never offer the full asking price.” That strategy might work if you’re trying to buy a used computer on eBay. And it worked in some real estate markets years ago. But times have changed.

The reality: A low offer may get you nowhere fast

A buyer in a strong, tight inventory market today would be wasting their time making low offers right from the start. It’s likely a home that’s priced right and shows well can receive multiple offers, sometimes even over the asking price. In this environment, constantly throwing in low offers because that’s what your Uncle Bob advised you to do will likely lead to disappointment. Instead, work with a good local real estate agent to understand the market. You’ll quickly learn after a few weeks on the open house circuit (and maybe a disappointment or two) that starting low may not get you anywhere.

Myth No. 3: A cash offer trumps all

There’s an assumption that a seller, considering two different offers, will always go with the cash offer because there’s less risk. As a result, many buyers who hear they’re competing with a cash offer assume they won’t get the home. They may not even make a formal offer. At the same time, many cash buyers assume that because they’re paying cash, they can make an offer below the asking price, and it will likely be accepted.

The reality: A savvy seller may be more tempted by a solid financed offer

Consider a seller with a home priced at $399,000. The seller receives two offers: One is a cash offer of $375,000. The other is an offer for the full asking price, with 25 percent down, a bank pre-approval letter and swift contingency periods.

A good buyer’s agent, upon learning their client is competing with a cash offer, will arm the seller with lots of data supporting their client’s finances, such as a credit report and verification of income or assets. The agent might even arrange a call between the seller and the buyer’s lender.

Learn your market

When you become a buyer or seller, especially for the first time, the most important thing you can do is learn your market. Talk to a savvy local agent, and don’t make assumptions based on what you think you know. Real estate is local. Every market is different, with its own customs. If you believe there are general rules for real estate strategy that apply everywhere, anytime, you’ll likely be fooled — not only in April, but every other month of the year.

The post Don’t Be Fooled By These 3 Real Estate Myths appeared first on Chicago Downtown Living.

original article

Consumer confidence in the U.S. housing sector continued to rise in February, but more people expect mortgage rates to increase over the next year, according to Fannie Mae’s FNMA +21.36%monthly national-housing survey.

The mortgage-finance company said its poll of 1,008 Americans showed home prices are expected to rise an average of 2.9% over the next year, slightly higher than the 2.4% increase expected in January.

The share who believe home prices will go up in the next 12 months was 48%, a survey high, while those who think home prices will fall held steady at the survey low of 10%.

The percentage who think mortgage rates will go up increased to 45% from 41% in January, while those who think they will go down held steady at 7%.
Fannie Mae also said 25% of respondents believe now it is a good time to sell, the highest level since the survey’s inception in June 2010.

About 50% expect home-rental prices to increase over the next year, matching the high set in January.

When asked about the state of the economy, 38% said it is on the right track. The share of consumers who expect their personal financial situation to improve over the next year fell by two percentage points to 41%.

“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell.”

The post Housing Market Rose in February (2013) appeared first on Chicago Downtown Living.

original article

A new credit scoring model will potentially boost scores for many credit applicants and help establish credit for millions of people who previously had little or no credit history.

The new scoring model will be used in the latest version of the VantageScore, the credit score created by the three major credit bureaus — Experian (EXPGF), Equifax (EFX) and TransUnion.

Currently, debts that go into collections, even if they are paid off, are factored into all credit scores for up to seven years, said John Ulzheimer, president of consumer education for SmartCredit.com. But VantageScore 3.0 will no longer factor these accounts into a consumer’s score if the debt was paid in full or settled, just as long as the balance is zero.

Also, natural disaster victims will now be able to benefit from good credit behaviors — like making payments on time, despite the hardship — but will continue to be protected against negative accounts. Previously, both negative and positive accounts were ignored in the aftermath of natural disasters, making it difficult for victims to improve their credit scores.

With big natural disasters like Hurricane Sandy hitting thousands of consumers in the Northeast last fall and millions of others with paid collection accounts on their credit reports, many people are likely to see their scores improve under this new model, said Ulzheimer.

“Consumers who have a zero-dollar balance on collections and no other negative information on their credit reports should see their VantageScore’s increase significantly,” he said.

But the boost only matters if a lender uses the new VantageScore. While FICO is still the most widely used scoring model, the VantageScore is gaining ground. It’s currently used by seven of the top 10 financial institutions, six of the top 10 credit card issuers and four of the leading auto lenders and mortgage lenders, according to its website.

VantageScore’s new model will also weigh rent and utility payment records, and public records like bankruptcies for people with very limited credit histories. This will allow it to score as many as 30 million people who previously couldn’t get a credit score, and potentially help them qualify for more competitive credit rates, said Ulzheimer.

Other score developers, like FICO, may follow suit.  FICO announced Monday that it will begin looking into ways of factoring in alternative records to calculate scores for those without — or with limited — credit files.

Meanwhile, VantageScore is changing its scoring range to align with FICO’s 300 to 850 range. Earlier versions range from 501 to 990, often causing confusion for consumers and lenders since most are more familiar with FICO’s range.

“This is like changing your speedometer from kilometers per hour to miles per hour, it just makes more sense to American consumers and American lenders,” said Ulzheimer.

The post New credit score could help millions appeared first on Chicago Downtown Living.

original article

Ivy Zelman is an industry expert consistently recognized by Institutional Investor, Greenwich Associates, StarMine and The Wall Street Journal as an industry-leading analyst. What separates her from many other analysts is the fact that she has accurately called the real estate market continuously over the last decade.

Her Position in 2006
She was one of the first to call the burst of the housing bubble. She was nicknamed ‘Poison Ivy’ for the harsh positions she took in combating the overly optimistic views of many in the industry at the time.

What happened next?
Existing home sales plummeted, new construction starts feel to historic lows and prices dropped by 50% in some areas of the country.

Her Position in 2012
Ivy Zelman, in a Wall Street Journal article in March Stunned Home Buyers Find the Bidding Wars Are Back, projected that the real estate market was about to rebound and that home prices would begin to appreciate. She emphatically claimed: “We very much believe we’ve hit bottom.”

What happened next?
Pending sales (homes going into contract) surged in May and have remained above what is recognized as a healthy market level ever since. Starting in June, home prices began to appreciate on a year-over-year basis. This continued through the rest of the year with yearend appreciation coming in at 6.8%.

Her Position Today
What is Ms. Zelman saying today? In an interview on CNBC, she said:  “I think we are in Nirvana for housing…I’m probably the most bullish I’ve ever been fundamentally…I think home prices could go up for four to six years…Today, the urgency and sentiment toward buying residential real estate is back.”

What will the future bring?
If Ms. Zelman’s past predictions are evidence of her understanding of the housing industry, it seems that real estate is about to make a dramatic comeback.

The post When She Speaks, We Should Listen appeared first on Chicago Downtown Living.

original article

Low mortgage rates have made buying a home more affordable and turned rentals into an attractive option for investors.

Throughout the downturn in the housing market, average investors, sometimes pooling their money, have bought foreclosures at a sharp discount and turned them into rentals. Many homeowners also have purchased a second home and rented out their first property.

Although the housing market is showing signs of recovery, demand for rental housing is expected to remain strong. The national unemployment rate remains high at 7.9 percent, banks are still working through a backlog of foreclosures and tight lending requirements prevent many renters from becoming homeowners.

And the Fed has said it will keep its short-term interest rate, the federal funds rate, at a record low until U.S. unemployment falls below 6.5 percent, something many economists don’t expect to happen until late 2015 at the earliest.

“In this market, at this point, it’s a sweet spot,” says Chris Princis, a senior executive at financial advisory firm Brook-Hollow Financial and owner of two rental properties in Chicago. “You’re getting the market where it’s just starting to rebound, but still at the bottom, with what’s looking to be a great recovery.”

Here are six tips on becoming a landlord or investor in rental property:

UNDERSTAND WHAT IT MEANS TO BE A LANDLORD
Residential real estate generally provides three possible ways to get a return on your investment: when it’s sold, assuming it has grown in value, by collecting rent and through tax savings, such as the mortgage interest deduction.

So, if you elect to buy a property for the long-term investment potential, the goal should be to ensure that the rental income covers the cost of your mortgage and monthly maintenance costs.

If you buy a foreclosed home, you’ll have to factor in the cost of repairs to ready the home for rent. And if you have a mortgage on the property, you’ll need to be prepared to cover the costs for however long it takes to find a tenant.

“Real estate is a great investment if people are paying their rent,” says Princis. “If they’re not paying their rent, it’s a horrible investment.”

BUY IN AN AREA WITH A HISTORY OF STRONG RENTAL DEMAND
Neighborhoods near universities are a good option. For homes in residential areas, proximity to schools can be a good draw for families.

Condominiums and similar properties in communities with a homeowners’ association can be a great option because the association arranges for upkeep on the property.

But check the fine print on your mortgage and homeowners’ association rules to make sure turning your property into a rental isn’t forbidden.

If you’re going to buy a foreclosure, be prepared to compete with other investors, many of them paying in cash. And because many require upgrades and repairs, expect that it will take longer until you’ll be generating rental income.

Foreclosure tracker RealtyTrac Inc. recently ranked U.S. metro areas, with a population of 500,000 or more, according to the supply of available foreclosures for sale and their discount versus other homes, among other criteria. Among the top 20 cities deemed the best places to buy: Miami, Chicago, Philadelphia, El Paso, Texas; and Poughkeepsie, N.Y.

Claire Thomas, a retiree in Phoenix who owns 10 rental condos in Las Vegas, says that landlords looking to keep their properties as income-generating rentals for many years should look into areas that are not too expensive.

“I would rather have a middle-of-the-road rental that stays rented than a higher-end (property),” she says.

CONSIDER A USING A MANAGEMENT FIRM
Determine whether you want to select the tenant and handle property issues or hire a company to do it. If you take on the responsibility, you are obliged to fix any problems (leaky faucets, broken furnace, etc.) or find professionals to do it.

“Are you prepared to do all of this this on your weekends or evenings or get calls while you’re at work because a pipe burst and it’s flooding?” asks Jim Warren, chief marketing officer for property management company FirstService Residential Realty. “What’s that threshold worth to you?”

Property management firms can charge a percentage of the rent, sometimes 10 percent or more.

Hiring out the hands-on landlord job also makes sense if your rental property is not in the same city where you live.

DO THE MATH
Although prevailing rental prices will go a long way toward determining what you can charge, getting the best return on your investment starts with making sure you’re going to get enough rent to, ideally, cover expenses and costs.

Princis’ formula is charging 15 percent above monthly mortgage and maintenance costs. So if those costs add up to $1,000, he’ll look to charge $1,150.

Of course, flexibility might be called for if you’re unable to get a tenant in for months and months.

Experts recommend starting with popular rental listings in newspapers or on Web sites such as Craigslist.com, Trulia and Zillow, to see what comparable apartments or rooms are going for. Another option is rent analysis website Rentometer.com.

SCREEN TENANTS THOROUGHLY
Once your rental starts drawing inquiries, it pays off to screen prospective tenants by asking for previous landlord references and running a credit and a criminal records check.

Experts also recommend asking for a deposit equal to one month’s rent, plus extra if the tenant has pets. That will help cover any damage to the property and protect you if a tenant moves without paying rent.

Also, have a walkthrough of the unit with the tenant and ask that they sign off on the condition of the property before they move in. That will help avoid conflicts over the security deposit if there are damages once they’re ready to move out.

GET FAMILIAR WITH LANDLORD LAWS
As a neophyte landlord, it’s important to know your exact responsibilities under the law.

Two good resources for rental rules are the U.S. Department of Housing and Urban Development’s Web site (www.hud.gov ), and The Landlord Protection Agency (www.thelpa.com ), which includes state-specific rental guidelines and standardized forms for rental agreements.

An attorney or the Landlord Protection Agency also can help you craft a well-written lease, which is crucial to protect your property. It will help you evict a tenant or hold them accountable for damage if necessary.

The post Rental housing can pay off even as market recovers appeared first on Chicago Downtown Living.

original article

After years of wild swings, the U.S. housing market is slowly returning to normal.

The latest forecast from Fiserv  (FISV) Case-Shiller predicts home prices will increase by an average of 3.3% annually over the five years ending September, 2017.

Home prices: Biggest winners and losers
These cities will see the biggest swings in home prices through the 12 months ending September 30, according to Fiserv’s estimates.

   Source: Fiserv

“2012 was the first year since 1997 that the housing market has resembled something [close to] normal,” said David Stiff, Fiserv’s chief economist. “For the past 15 years, home price changes and sales volumes have either been boosted by a bubble mentality or crushed by crash psychology.”

From 1998 until the housing bubble peaked in 2006, home prices grew by 5% or more a year. But once the bubble burst, home prices plunged, falling 30.5% through the end of September 2012. 

It wasn’t until late 2011 that markets started to stabilize, according to Stiff. Between September 2011 and September 2012, average U.S. home prices rose 3.6%. By then, 62% of the 384 metro areas Fiserv tracks reported rising home prices, up from just 12.5% of all markets during the same period a year earlier.

Many of the metro areas hit hardest by the housing bust recorded the biggest price gains during those 12 months. In Phoenix, for example, prices climbed back by nearly 21%; prices in Detroit rose almost 16%; and homes in San Jose, Calif., gained 12.5%.

Values continued to decline on Long Island, N.Y., however, where prices fell 8.1% and where Stiff said the turnaround in median income lagged the rest of the nation by about a year. Brunswick, Ga., also saw declines, down 7.1%, as did Valdosta, Ga, off 6.9%. Both areas saw jumps in foreclosures.

By the end of this year, Fiserv predicts that home prices will be heading higher in almost every metro area it tracks. Medford, Ore., is expected to gain 9.7% in the 12 months through September, the highest of any city. Other big gainers are expected to be Santa Fe, N.M., up 8.1%, Billings, Mont., 5.5% and Syracuse, N.Y., 5%.

Fiserv expects Miami home prices to sustain a 10.7% loss over the same period, the largest drop of any market. Stiff said a steady stream of foreclosures will keep prices soft in the area during that time.

While Stiff said home price gains will be similar to those experienced back in 1997, he noted the similarities stopped there. Currently, millions of homes are either in foreclosure or on the verge of it.

Otherwise, there are many positive trends in today’s market, he said. Prices are extremely affordable and mortgage rates are at or near historic lows. Overall, Fiserv Case-Shiller expects stronger demand for housing, and the sector should, once again, have a positive impact on the economy.  

The post Home prices finally returning to normal appeared first on Chicago Downtown Living.

Business Insider
By Mandi Woodruff
March 4, 2013

original article

If you’re a home seller looking to get noticed by the millions of prospective buyers browsing online real estate listings, the words you choose to describe your abode can be everything.

Leave out a key phrase like “hardwood flooring” and you could easily get passed over by buyers would have found your listing in a search otherwise.

Real estate tracker Trulia recently began studying the psychology and strategy behind online home listings –– namely, the buzzwords that are used to sell them.

“We aim to reveal how consumers and professionals think and talk about real estate, and the strategies they use to buy and sell homes,” said Jed Kolko, Trulia’s Chief Economist.

“Insights from listings and search behavior are the color commentary behind the price trends and other numbers that we regularly track.”

For well-heeled buyers, it turns out features like paneled libraries, powder rooms and parlor floors are most often used to describe luxury homes.

On the opposite side of the spectrum, deeming a pad a “cute little bungalow” is a major clue that it is  a) inexpensive (on average, about $62,000) and  b) going to need some work, according to Trulia

Here are the 20 most common phrases used in luxury and low-cost home listings.

Follow-up by Patrick Carton
Luxury Real Estate Broker, mba, @properties Chicago

“By looking at the 2 extremes (in descriptive phrasing), it is fairly easy to determine where a particular phrase falls along the spectrum. Typically, agents use less valued-enhancing phrasing to emphasize a perceived value opportunity, when in reality, they are shooting themselves in the foot. Value-enhancing phrases in most cases depict a property with less than stellar features. Be careful – And edit all your property descriptions with a very critical eye.”

“Interpreting a perception is very subjective and will depend on many variables in terms of location, buyer group, reputation and many other factors. Phrasing to elicit the desired effect is not always straightforward. Knowing that there is no definite “right’ or “wrong” answer, consider the common perception of some of these phrases:

You get the idea. Consider descriptions carefully and stay abreast of the latest market research as it pertains to real estate transactions. This past troubles housing market has given birth to hundreds of studies concerning transaction analysis. Keep up to date with the research and evaluate everything.”

Patrick Carton, mba, broker

The post 10 Phrases that are Found in the Most Expensive Home Listings appeared first on Chicago Downtown Living.